Apple Video iPods – Crossing New Frontiers

We recently covered the speculation about the Video iPods ahead of the actual launch. We also covered earlier Bob Cringley's earlier perspective wherein he wrote that Mac Mini +iFlicks shall be positioned as the integrated digital distribution framework of video, similar to iTunes and iPod – Just like iTunes is where Apple really stands to capture massive long-term value, iFlicks + iTunes may position Apple as the digital media distribution pioneer with potential domination in this space. He points out now that with Video iPod in place Apple has sealed deals to distribute TV shows and music videos, but not movies, allaying some fears from some quarters in hollywood. The price can be seen as high because the cost of goods is presumably close to zero (the show is already paid-for, though there may be some residual payments. There are no manufacturing or inventory costs. Marketing is effectively free if it is done on the network show, itself. That leaves distribution as the major cost. But it isn't enough to shake the very foundations of network TV points out Bob. Will more join besides ABC & Disney ?The experiment going on here is all on behalf of the major movie studios, the very outfits that haven't yet signed on to distribute their movies through iTunes. The studios want to see how the market accepts these TV series distributed in this format, whether the ability to download the shows has a material impact on their broadcast viewership (ratings), and most especially whether we see a surge of pirated copies of "Lost" - copies that can be traced back to iTunes distribution. If these shows are able to demonstrate incremental revenue increases that don't harm their existing revenues or pose an unreasonably increased piracy threat - then the studios and other TV networks will sign on and Apple will be in the movie and TV businesses, big time. Next step – With DVDstations one can plug video-enabled iPod into their kiosk and download an HD movie in 90 seconds or less.This is a compelling model, placing the equivalent of a completely automated Blockbuster video store in a few square feet. The video-enabled iPod becomes the vessel for transporting movies from store to home – Apple can sell iPods to people who like movies but don't typically carry their music with them - a whole new class of iPod customers. While different views exist about Apple's Plan with the video iPod, I agree with Bob that in pursuit of replacing televisions, DVDstations may begin to appear in Apple retail stores, Apple may persist with Sony for television.