Who wants an iPod video?

I wrote this over a year ago and never published it to the site until now. Thankfully all human events are cyclic, so the time to post it has come again. Since I wrote this, both Virgin Digital US and AOL Music have turned their users over to Napster, Apple launched their video store with only Disney movies and has been unable to get other big studios to come on board, a slew of music/cell phone hybrids have appeared including Apple’s new iPhone along with music stores to buy songs for your music capable cell phone, and Apple debuted their Intel powered iTV device for playing your iTunes library on your TV (and the remote control has six “buttons“).

For the record, I have not edited this since I first wrote it on September 21, 2005. (That’s right — 2005.)

Video iPod… you know, for kids!

Let’s think about how people use iPods today. Many people wear them walking to and from work, plug them into cars or stereos for listening to music, or wear them jogging and exercising. Sometimes using public transportation or on airplanes, people sit and listen to music.

Video is a visually intensive medium, absorbing the attention of the user almost exclusively from other activities. McLuhan pontificated on the differences between radio and TV as hot (low participation) and cool (high participation) mediums. (I think TV is just dumber.)

So how can you watch a high participation medium like video while driving your car without meeting new people (by rear-ending their cars)? I’m sure there are some really rich people out there who do watch videos in their car despite the impact on their driving, but then again people also drive and talk on their cell phones. I can only hope that someday I believe in karma so that it can catch up to those people and bite them in the ass.

Still, would you watch videos walking around or jogging? Today it’s socially acceptable to tune out and listen to the radio or an mp3 player in public. More and more people are walking and text messaging at the same time. But video? You can buy a TV right now that is small enough to carry with you as you walk, but people aren’t walking around with TVs all the time. And on buses and subways (and even walking around), I think people would be wary of holding an iPod in your hand to watch the video for fear of having it stolen right from your grip. (Watching for thieves while watching a video is hard.) Without a transformation in iPod culture, the only places where people will use these is on airplanes and in automobiles as passengers and that’s about it. Can that change take place?

The content Apple is going to sell also tells you something about the target audience of the iPod video — teenagers, because I’ll be damned if I ever buy a music video. They’re the ones who buy ring tones, who watch MTV, who obsess over pop culture, who text message while walking and chewing gum, who spend time riding on school buses. I don’t know many adults, if any at all, who watch music videos. I feel bad for all the parents who will have to shell out for the new iPods and iTunes accounts for their kids. Maybe Apple can start selling iPod family packs… There’s even an iPod mini for baby — it comes in pink and blue.

I think Apple is expecting success similar to that of ring tones — that having videos on your iPod will become cool and wildly popular, passed on between friends, a kind of identifying mark like a ring tone. Maybe something like this is one of the features they’ll announce September 7th (more at the end).

But my doubts linger… Other video players on the market right now already play a variety of video formats, but what will Apple do? Will their video iPod only play video files with digital rights management or some form of encryption? Will the iPod video have an output for display on TVs? We’ll find that out soon, and then we can decide for ourselves whether or not they were pressured to do so by the RIAA or MPAA or their moms.

This is not the end of Apple’s video migration. Apple is not stupid, and I can’t imagine they’re going to start selling video and not develop a version of their operating system specifically for TVs. Think of an Apple PVR or media center, because what good is it if you can’t play all your paid for music videos on your TV? Complete with the $100 Apple remote control which will have only one button. (Yeah, that’s a mouse joke.) I bet this is what Intel had in mind when they signed a deal with Apple to supply CPUs and such, especially with Intel’s new Viiv marketing — an Intel hardware based, Apple software powered media center. If I’m right, you heard it here first. If I’m not, then I’ll deny I ever wrote this.

Maybe I’m just hoping that the iPod video will be a failure out of my disdain for Apple and their shiny, overpriced, technologically inferior media products. But the question that I have which I think there is no real answer for is this: Who the hell would buy the video and the mp3 of a single song separately? Nobody. Apple better have the best pricing and bundling strategy ever for this or it’s already destined for failure.

On a random note… Apple currently controls about 3/4 of the MP3 player market, followed by Creative and then by other random companies. Most of Apple’s competition (if you can call it that) are in a race to the bottom — the lowest price. Creative is really feeling the pinch, missing their sales marks lately and struggling with their Zen line of players. (Editor’s note: I own several Creative products.)

The MP3 player market is being fueled by younger people with lots of disposable income. You know them… They’re the kind that own computers. Yes, I’m saying that poorer people aren’t buying MP3 players with their scant extra money. I think these companies at the bottom of the MP3 player ladder are hoping the rest (also at the bottom of the ladder) will go out of business. Some will, but MP3 players are not commodities like televisions. This market is entirely fueled by rich people and has no appearance of shifting downward — at least not until Dell bundles one of their (rebranded Creative) MP3 players with a computer for under $400. Maybe the rising tide of digital music growth on the net can save Creative and their like from the juggernaut of Apple, but that doesn’t appear to be the care right now.

The same is true of digital music services. A recent survey said something like 41% of people would not pay more than $10 a month for a digital music subscription. Most people overlooked the 34% who said they would never get such a service (and probably download the songs for free instead). The time for these services to sink or swim is coming quickly. I think most of them are limping along, dumping cash into these services in hopes of catching the expected wave when lots of people start using these subscription services in the coming years. Real is just pushing into profits now, mostly from their 2 million new Rhapsody subscribers. Napster is losing money but growing fast. Even with this growth, prices for these services will not drop because of pressure from the RIAA and big labels. If anything, expect it to become more expensive but still have trouble penetrating all demographics.

Apple announces their new iPod innovations September 7th and maybe more during their expo around the 20th. It will almost certainly be the mobile iTunes stuff because Napster just announced their own mobile service. An important part of cell phone culture is sharing ring tones, photos, and more. Mobile iTunes and Napster better support this somehow. Maybe the ring tone market will evolve into the next platform for these digital music services? I’ve told others for years now that the cell phone was going to be the device of digital convergence. The MP3 player market is about to face new competition in the form of digital music enabled cell phones.

But that’s all business analysis crud. I can’t wait for this headline and how many groups it will piss off simultaneously: "Teen driver causes pileup while watching iPod rap video." That story will make news despite people who had car accidents while talking on cell phones or watching videos while driving. Damn sensationalist media…

One Reply to “Who wants an iPod video?”

  1. Apple’s usually done well in hitting the convergence nail on the head but somehow I think this new iPhone (trademark pending) is way off the mark. Even in 2005 the hype of the Video iPod far outdid its actual sales, perhaps this is part of Steve Jobs’ way of correcting this error.
    Living in the tech hub of San Francisco, there are still few places where you actually get to see these Video iPods in use, I commute on MUNI and its rare to see people with more than an mp3 player. The occasional PSP or Nintendo DS pops up, but I may see someone doing more than listening to music maybe twice or three times a week.
    Maybe Apple is twice as sexy as Sony, heck, let’s give them 10x as popular that people will switch to Cingular and purchase one of these devices. It will still be a far cry from the 10 million devices that Apple intends to sell by 2008.

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