Steve Jobs stumbles over the last 100 feet
Oh look -- a new gadget from Apple! It's a ... $300 set-top box. (Groan.) I'll go out on a pretty stout limb today and predict that the combination of Apple's iTV box (see Engadget's pictures here) and its new downloadable film store won't have a fraction of the impact on the movie-distribution business that the iPod and 99-cent downloadable songs had on the music industry. The reason goes beyond Steve Jobs' inability to persuade studios other than Disney (where Jobs is a board member) to accept a significantly lower wholesale price for a download than they charge for a physical product. The main problem here is that Hollywood and movie fans don't seem ready to make the same leap into the virtual world that the music industry made (albeit reluctantly). They're too committed to bits encased in plastic. And Apple doesn't provide a way to convert its downloads into DVDs, at least not yet.
One of the reasons downloadable music took off, I think, is that the shift from CDs to song files improved the user experience in a few notable ways. Song files made it possible to put one's entire music collection onto a computer or carry it around in a pocket. Software like iTunes allowed people to mix and match their favorite songs in customized playlists, rather than listening to music album by album. And stores like Apple's made it possible for people to buy just the one or two songs they knew and liked from an artist in lieu of entire CDs. Those songs then fit seamlessly into the collection of tracks ripped from one's CDs (or downloaded illegally from file-sharing networks). Thus, when people shelled out $300 for an iPod, they were buying something that they couldn't get from CD players, turntables and boomboxes.
Contrast that with the situation in Hollywood, where the shift from DVDs to movie files is yielding few, if any, benefits for viewers. The price for downloadable movies isn't dramatically better than the price for a disc at Wal-Mart, in part because the studios don't want to antagonize retailers who are selling so many DVDs. There's no legal way to put your entire movie collection onto a computer or portable device -- DVDs are encrypted, so they can't be ripped legally the way CDs can. So there's no way to carry all your movies around with you, nor to mix and match your favorite scenes from a variety of flicks into a customized video (not that you'd want to; unlike a CD, a movie isn't a collection of severable pieces of entertainment).
There's also what industry insiders call the "last 100 feet" problem, referring to the gap between the typical home's computer and its living-room TV set. The obvious solution would be to burn the downloaded film onto a DVD, but the major studios insist that such discs be encrypted. (Studio execs say that selling a product without encryption would fuel rampant illegal copying, but I wonder why a pirate would pay $10 to $15 instead of downloading a free, bootlegged version through BitTorrent. Convenience? Reliability?) There's only one kind of encryption that a conventional DVD player can decipher -- called Content Scramble System, or CSS -- and it's yet not available for use on homemade DVDs. With luck it will be available early next year, thanks to a recent agreement between Hollywood studios, tech companies and consumer-electronics manufacturers to create customized blank DVDs that are CSS-ready.
Apple might go the CSS route eventually. Today, though, it showed only one way to get a movie from a Mac or PC to the TV: the new iTV box, which is due early next year. This box will let you beam music and movies securely from a computer to a digital TV set, provided that the TV is equipped with the right kind of digital input (technically, HDMI or DVI with HDCP for those of you who like acronyms). I really like the idea of Apple providing a way to move video securely over a home network -- there are plenty of folks who have tried, but I've yet to find a living-room device that handled encrypted content really well. Still, given how few people have digital TVs with the right kind of digital inputs, I don't see an online movie store succeeding in the near term without the ability to burn DVDs.
Beyond that, the need for a $300 set-top box craters the whole value proposition of downloadable movies. What does the iTV box offer that a DVD player can't do for significantly less money? Yes, you can use it to watch the copy of "Finding Neverland" that you downloaded for $10, but you could find the film on DVD for about the same price and get more content (Apple's not including the bonus DVD features in its downloads). It would be a more compelling device if it could let you watch any movie in your collection, but again, you can't -- they're not on your computer, they're stuck on DVD. So what unique thrill does Apple provide? Watching two-hour movies on an iPod screen smaller than your credit card?
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The thing I like about iTV over a DVD player is that I don't have to have shelves full of DVDs to search through to watch a movie. It's the same reason Tivo is much nicer than a VCR because I don't have to record stuff on a bunch of tapes and then search through them to find it. The big question to me is how many movies can I really store on a hard disk... and what happens if my disk crashes? Have I lost my investment in movies?
Posted by: Mark | September 13, 2006 at 01:06 PM
I agree, using a computer as a video jukebox is very appealing. I just wish the movie industry made it possible to do that without having to buy and download copies of everything I already own. My Thomas the Tank Engine DVD collection alone cost hundreds of dollars. :-)
As for the hard drive issue, online stores often allow customers to download a new copy of their purchases in the event of a catastrophic crash. I don't know what Apple's specific policies are, though, because my iTunes 7 crashes whenever I open the movie store. Sigh.
Posted by: Jon Healey | September 13, 2006 at 01:33 PM
I'm not sure you need a digital television for the iTV. It looks like it will have analog hookups. We'll see when the production model comes about. Still, it will probably be more useful for television shows than movies. It would be great to download a season of a television show (if you forgot to TiVo them.)
Posted by: Robert | September 13, 2006 at 02:47 PM
You'd need a digital TV for the movies you bought from the Apple store, which the studios insist remain encrypted all the way to the set. Analog TVs and even some digital TVs can't handle the encryption. Dunno whether that requirement would also apply to the iTunes TV shows, many of which come from the same studios....
Posted by: Jon Healey | September 13, 2006 at 03:09 PM
I suspect that Steve Jobs and Apple will be marketing this device to the early adopters. However, they better think twice about releasing such a device with only an HDMI output. Why? Most people with a widescreen HDTV bought their screen when HDMI was relatively new. Most people only have one HDMI input on their set (if any at all). That port is probably already in use for their DirecTV HD Tivo or cable DVR. Add to this problem when a user purchases a BluRay or HDDVD player. For this device to have even the remotest chance of success it needs at least two HDMI inputs (passthru) in addition to it's HDMI output.
Posted by: David Raney | September 13, 2006 at 05:03 PM
I won't blame you if this doesn't make it past the moderation stage, but:
There are a lot of errors and misinformation in this piece, the most dramatic being that iTV requires an esoteric digital connector. As for the problem of not burning DVD's, how long do you think it will take for someone to create a hack for getting around that? And to say that you can't take your movies with you is also, simply wrong.
While I understand this is a BLOG, and while it's refreshing to read something from someone who doesn't worship Jobs and fawn at Apple, it would be nice if the facts were lined up correctly.
Posted by: Evets Tiforp | September 14, 2006 at 05:14 AM
Mr. Healey, I think you have a flaw in one of your arguments. You state in an earlier comment that, "You'd need a digital TV for the movies you bought from the Apple store, which the studios insist remain encrypted all the way to the set. Analog TVs and even some digital TVs can't handle the encryption." I don't believe this to be correct, simply going off of the current DVD player functionality.
The DVD player is what handles the decryption of the content, and then it sends either a digital signal over an HDMI connection or (for audio only) one of its digitla audio outputs. It will also send the decrypted video over either an HDMI output, a set of Component outputs, an S-Video output, or a composite video output (depending on the connections available on the specific DVD player).
If the movie studios are OK with a standard DVD player doing this, then I have to believe they'll be OK with an iTV set-top box doing the same thing. In other words, the data is sent in an encrypted form over the wireless network from the computer to the iTV, and then the iTV decrypts the content and sends the video and audio signals over either the HDMI output or the provided component video and analog / optical audio outs.
I'd be very interested to hear evidence to the contrarry if you can provide it.
Posted by: Joe Moran | September 14, 2006 at 06:35 AM
The ecology is not complete yet, partially because of the economic royalism of the studios. Eventually, Hi-Def disks will command the premium that DVDs now have, and the rest of our movie purchases -- or our global YouTube -- will be lower def.
To Robert, the TV does not have to be digital -- it has a plain old component out too. Most modern analog sets have that.
It's still in development, of course. I think the Wireless-N standard has to be finalized. As well, there's talk of the HDMI output requiring some kind of encryption/authorization.
Posted by: Jim H | September 14, 2006 at 08:12 AM
The iTV/iTunes option is a much larger challenge to major studios than what you set out above. As the others have mentioned, TV viewing through iTV will probably be the dominant use. In the battle for consumers' entertainment viewing time and purchasing patterns, this will be a big loss for the major studios. Furthermore, the iTunes/iTV platform has just created a straight to consumer option for Independent studios and entrepreneurial directors and producers. iTunes has not worked as well for Independent musicians/labels in part because the major record labels have signed on with Apple. Just more grist for the mill...
Posted by: Horacio Romero | September 14, 2006 at 08:59 AM
To all who question the digital-output requirement to view Hollywood movies: I understand your skepticism, but I have that bit of information from execs at two different studios. Apple hasn't shed any light on the issue, unfortunately. Just because the studios allow movies to travel in the clear from a DVD player to a TV doesn't mean they want that practice to continue in new platforms; witness their efforts in Washington to close the "analog hole."
All the same, I'll keep bugging Apple and will correct anything that proves to be wrong, probably in a new post.
Posted by: Jon Healey | September 14, 2006 at 10:21 AM
From: < a href="http://macdailynews.com/index.php/weblog/comments/10927/">LA Times: With iTV+iTunes Movies, Steve Jobs stumbles over the last 100 feet
Healey's wrong: iTV will offer component video and audio for older TVs, too.
Healey really, really loves plastic discs, doesn't he? He's the one who's "too committed to bits encased in plastic." Unfortunately Healey's love of DVDs is hindering his ability to think outside the box. No, Apple doesn't offer a way to rip DVDs like they do for music CDs (you can thank Hollywood for that situation). So use HandBrake and rip them like the rest of us. Done.
Now you've got all of your DVDs ripped onto your Mac or PC hard drive and, with iTV, you're all set. Also, does Healey grasp that Apple's 80GB iPod can put 100 hours - or approximately 57 full-length feature films - in your pocket? How much do 57 DVDs weigh? Take your 5.5 ounces iPod to your riend's house, plug it into the TV with a $19 wire and watch 'til you drop. Isn't that a notable advantage right there? How about just not having to get up and search through shelves of DVDs to load into your DVD player when you can simply find your film with a few clicks of a remote? Another advantage. Bet you can think up some more. Healey doesn't get it.
Posted by: MacDailyNews Webmaster | September 14, 2006 at 02:03 PM
iTV will work on ANY TV (it has component video and audio) as well as HDMI and optical audio among other connections:
Photo of rear of iTV's jacks and video of Steve Jobs explaining iTV:
Apple gives sneak peek of ‘iTV’ set-top box to debut Q1 2007
http://macdailynews.com/index.php/weblog/comments/10879/
Posted by: MacDailyNews Webmaster | September 14, 2006 at 02:07 PM
This basically lists all the errors in this story. Please correct your factual errors. It only spreads more disinformation.
http://macdailynews.com/index.php/weblog/comments/10927/
Posted by: Patrick Robinson | September 14, 2006 at 02:35 PM
Mr. Healy, you don't get it and it's sad, either by your age or lack of technical expertise.
Posted by: Generation X | September 14, 2006 at 02:56 PM
What is going on with the L.A. Times? First, an inaccurate and negative piece on the editorial page yesterday and now the same today with Jon Healey's article. Does the L.A. Times have an Apple/Steve Jobs bias going on here?
There was no need for sarcasm in the first sentence of Jon Healey's article, it was inappropriate and just tacky. (Groan.)
And the title of the article..."Steve Jobs stumbles over the last 100 feet". Wow, give him a break, Showtime was just 2 days ago and iTV isn't even out yet. We're in the first inning and the game is over?
Jon Healey seems to be in a nit because you won't be able to burn movies downloaded from iTunes. Why would you want to. The whole point here is there will no longer be a need for physical DVDs if you have wireless distribution throughout the home and an iPod type device for every other place you go. I've never burned a single song to a CD that I've download from iTunes. A DVD player could eventually become a thing of the past like VHS boxes, we keep them around...just in case. And yes, there is the legal issue of getting your existing DVD collection into the iTunes' iTV system and this is something Apple should develop securely with the studios.
As for the studios not wanting to antagonize retailers it sound like the tail wagging the dog here. No matter how the studios market their DVD movies, retailers will always sell them because if they don't, another retailer will.
Posted by: John Glasgow | September 14, 2006 at 09:12 PM
Just to be clear here, this site is a blog. Pieces here do not run in the newspaper, and they're not news articles. To see what Dawn Chmielewski of the Times' Business section wrote about this topic, go here: http://www.latimes.com/business/la-fi-apple13sep13,1,5514144.story
It should be obvious from her piece that Dawn and I don't debate the things we both write about. That's a good thing -- she's paid to be objective, and I'm paid to have opinions.
The similarity between the blog posting and the editoriall that appeared about a day later is not accidental. One of the goals in my having a blog is to air out some thoughts and get feedback before I write something for the newspaper. Usually there's a gap of at least a few days before a topic I blog about winds up being editorial fodder; such was not the case here, alas. The Mac faithful are generous in their feedback and swift, just not swift enough this time. :-)
Posted by: Jon Healey | September 14, 2006 at 09:28 PM
Ouch. It looks like the Mac fanboys have taken a torch to this piece.
It's too bad, too, since it offers a legitimate critique of what's wrong with the iTV in a historical and usage-based perspective. Long story short: music is something brief that we can listen to whereever, whenever. That was the genius of the Sony Walkman and Apple's Walkman clone, the iPod.
But movies we watch at home or in a theater, sitting, for an hour or more at a time. Portability isn't a concern at all, it's the picture quality, the bonus features, the sound, all the things that the iTV doesn't offer.
Apple fanboys say, Gee, I can store all my movies in an iTV! So what!? I can store all my DVDs in a bookcase, and I can just grab one and take it wherever. Can't do that when it's stuck in an iTV. That means no sharing movies with friends, no taking movies on the go, no doing any of the most common things that people do with movies.
The Apple iTV is a step backward in functionality.
Posted by: Jorge | September 15, 2006 at 11:08 AM