November 30, 2007

Why Apple Can't Do To Video What It Did To Music

But What It Can Do To Yet Succeed

by James L. McQuivey, Ph.D.

with Ellen Daley, April Lawson

Executive Summary (This is a document excerpt)

Apple's appetite for a slice of the video pie has proven bigger than its reach. The iTunes video experiment of selling TV shows for $1.99 and movies for upwards of $9.99 — although a great service to the 4% of online adults who regularly buy video on iTunes — is not a mainstream model. Importantly, it won't translate into what Apple really wants: increased demand for sophisticated hardware like the iPod touch and Apple TV. Those devices still have a role, but they won't go beyond early adopters without opening the business model to include video experiences not offered today. Media strategy professionals take note: there's still plenty of opportunity to stake a claim in video territory.

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