Of iPods, and Music Videos

I know I’m an old man already at 30, but I think the last music video I watched was something from Christina Aguilera’s Slut-Yourself-Rich period a couple of years ago. Even then, I’m pretty sure I only watched the whole thing because I thought she was going to violate the “no live sex on TV” rule in front of my very eyes. Well, she didn’t, and I haven’t watched a music video since.

… which makes me wonder about all this talk of Apple’s alleged plans to sell music videos for display on iPods.

Is this really a viable market? I don’t think it is. The amount of music videos Apple will sell is probably much less than 1% of the amount of audio tracks they will sell, so it’s clearly not the reason the company is adding video capabilities to their iPods. More likely, it is a way to ease iPods with video capabilities into circulation until Apple has more compelling content to offer.

Conventional wisdom says the real money is in movie distribution, and while I agree to a point, there are so many issues being negotiated behind the scenes that it is understandable why this hasn’t materialized yet. Working at Disney for the past five years, I can’t even begin to tell you how long the chain of rights is to negotiate with regards to theatrical releases. The single biggest achievement of the iTunes Music Store was not the interface, the distribution, or the selection of music… it was the negotiating of rights by Steve Jobs. Jobs offered each music label the exact same deal, and being the most charismatic technology figure in the world (probably ever), he convinced them all to take it. Doing the same thing in the movie world isn’t impossible, but it’s going to be much much harder.

That’s also to say nothing of DRM issues in the video world. If you’re wondering why Microsoft is the only company in the world with industrial-strength video DRM right now, it’s largely because they settled a lawsuit with InterTrust about a year ago for $440 million putting them in the clear of any DRM-related lawsuits. Many companies are afraid to infringe on InterTrust’s patents right now, and Apple may or may not be one of them. If Apple feels they can create video DRM without infringing, they will. If they don’t, they will either have to sit on the sidelines or license.

Getting back on topic, I feel like Apple’s best move right now is not in music videos but concert videos. I wrote about this back in February when I suggested a video device with which to view concerts but the idea received only a lukewarm reception in the comments. Fast forward to July now and we have news of an AOL/AEG/XM cooperative called “NetworkLive” which will not only deliver live and archived shows via audio and video streams but actually play a part in producing the concerts themselves.

Big, BIG missed opportunity for Apple here in my opinion… especially since the rumored investment in this initiative is an extremely affordable $15 million.

If I’m Apple, I’m knocking on the door of NetworkLive right now and if no one answers, I’m busting the damn thing down.

23 comments on “Of iPods, and Music Videos”. Leave your own?
  1. Jason says:

    (Hey, I actually posted first :P)

    I agree with you on all that stuff.

  2. Jeff Croft says:

    …the last music video I watched was something from Christina Aguilera’s Slut-Yourself-Rich period a couple of years ago….

    God I loved that period.

    Anyhoo…I generally agree that there probably isn’t much money in selling music videos (although I personally rather enjoy them and will probably buy them). However, it seems to me that music videos are a “low-hanging fruit” that would give Apple an easy entry into the video market. Movies are the obvious breadwinner here, but I believe there are still licensing deals and copyright issues to be dealt with. Concert videos is a great idea, but it requires production of them, which is no doubt an expensive and complicated task. Music videos, on the other hand, are just sitting there, ready to be taken, ripe to be picked.

    It seems like a reasonable first shot at the video market to me. I just hope it’s not the be-all-end-all of Apple’s video plans (and surely isn’t not, right?).

  3. Philip says:

    agreed. music videos, big deal. can i watch u2’s latest show, or the live8 shows? awesome.

  4. Mike D. says:

    Jeff: Read up on the NetworkLive stuff a little. AEG has a good deal of experience producing concerts and they have a good amount of major venues locked up too (like the Staples Center, for instance). If Apple tried to produce shows by themselves, then sure, it would be a huge task. But this joint venture really seems like a viable thing to me… especially if the economics of the music industry play out like some people think they will, with live shows being the major source of revenue and recorded albums basically being given out for free.

    Also, don’t forget that the concerts in and of themselves are *already* profitable. Live and archived footage is just gravy.

  5. Jeff Croft says:


    That makes sense. I guess my real point was that just because Apple is doing music videos first doesn’t necessarily mean all this other stuff isn’t on their radar…

  6. Jeff Croft says:

    BTW, AEG is responsible for the new area in downtown Kansas City, so it’d be sweet if concerts there were also included. :)

  7. Mike D. says:

    Jeff: Yep. Another to consider as well is the question “Does ‘music video’ mean what we see on MTV? Or could it could be snippet from a live concert?” If it’s live songs with accompanying video that Apple is looking to sell, well then I think we have something.

  8. Pedro says:

    The only real use I could maybe think of this whole iPod music video’s is maybe in your car. You can easily now connect your iPod to your car speaker system. With this whole ‘Pimp My Ride’ and video screens hitting cars, maybe there there will be a connection to where you can connect it to your screens in your car and you would not have to bring a case of music videos on DVD’s to play in your car.

    I do not have a TV (college student), but when I did watch MTV or VH1 and it was music videos, I usually just had it on to listen to the latest in music. I did not sit down and actually watch the videos.

    All in all, like you said, I do not think it is a market worth going after. There is Yahoo Launch which I think does a terrific job of showing music videos if you are inclined to watch some.

  9. Nathan says:

    I don’t think the portable movie market is there. How many people can watch a movie while walking? Are the UMD movies selling? That would tell us something. I mean are people gonna buy a movie for their iPod and then have to buy it again for their DVD player? That sucks.

    If they could let a DVD be ripped and watched on your iPod then that would be great, but that will never happen. It’s illegal to do anything cool like that with DVD’s.

  10. vaska says:

    Very smart call on the InterTrust thing.

    But what about television shows – sitcoms, cartoons, Charlie Rose? I hear stories (as I don’t have one myself) of people watching the Simpsons via their cellphones on the train to work. Is this not true?

    Perhaps going astray, but the BBC is soon to start releasing their shows online. I’ve heard that they are going to rely upon P2P for distribution so they don’t have to absorb all the bandwidth costs themselves.

    As I’m a native Seattle-ite living in Europe, I can’t tell you what I would do to have easy access to some shows. Yes, I would even be willing to pay to download. Will tv in the states find a model to follow BBC’s lead as well? Could Apple have a role (as opposed to exclusively distributing movies)? Is this discussion merely about music videos and movies?

  11. Mike D. says:

    Nathan: The situation you describe with DVDs being transferred to portable devices is actually in the cards already with some of Microsoft’s latest technologies. No one has put it to great use yet, but the hope is that it will become a popular value-add to off-the-shelf DVDs.

    Vaska: Distributing TV shows may be a bit easier than movies in some cases, given the shorter length and lower quality requirements, but the rights issues are still there. Think about the show “WKRP in Cincinnati” which had to have all of its music removed when redistributed because the authors of the music didn’t agree to let their stuff be reused without being paid additional fees. The thing about TV is that when a station like NBC broadcasts a show like “Friends”, they don’t automatically have the right to do whatever they want with it afterwards. The producers of the show (an independent company) retain those rights so whenever NBC decides they want to do something else with the show besides just air it on TV, they need to go back to the production company for rights. Studios are starting to get hip to this stuff and negotiating “IP distribution rights” in advance, so the situation should get better in the future, but it’s not retroactive, so most of your favorite shows will still have issues.

  12. Matt Round says:

    Maybe there isn’t a huge market for portable movies, but then there isn’t much of a demand for portable photo viewers and Apple still produced the iPod Photo.

    I think you have to also see the iPod as Apple’s strongest marketing tool for the rest of its range. If they want to move into selling movies (and perhaps produce a media centre Mac to sit under the telly) they’ll need every trick in the book to make it succeed, and getting people used to viewing cheaper videos (and ones they’ve created themselves) on their iPods is one such trick.

  13. AkaXakA says:

    so whenever NBC decides they want to do something else with the show besides just air it on TV, they need to go back to the production company for rights.

    But doesn’t that open up the arena to those production studios to go and sell their content to (say…) Apple directly?

    Of course, it would mean that Apple would have to deal with a lot more parties, though they of course would be less powerfull.

  14. Brian says:

    Matt has it right. They can release the ipod video as an extension of the iLife on Macs. It would make it easy to produce a home video, put it on the ipod, go to grandma’s and show grandma the trip to Europe. That would eliminate the need for a DVD and a Superdrive.

  15. Dean says:

    They could always rebroadcast Grateful Dead concerts. ;) (I’d watch — see, I’m really old.) It probably wouldn’t cost them much either since the Grateful Dead encouraged the audience to record their concerts.

  16. Calrion says:

    I’d like to put a different spin on this, and extend Matt’s theory about the iPod Photo: Apple didn’t add photo capabilities because there was demand, they did it because it was easy and inexpensive.

    Perhaps Apple aren’t adding video to iPods because it’s in demand (now), but because it’s not incredibly difficult to do. Saturate the market with video-capable players now, then when the entertainment industry is ready for electronic distribution, Apple is better-positioned to take a large slice of the action.

  17. Dave says:

    Songs are relatively small files. Movies are much larger.
    To rip a CD takes only a couple of minutes. How long would it take to rip a movie, if that technology were ever allowed to be legitimately distributed (viz. through Apple)? Or how long to download one movie vs. two albums?
    To transfer 5000 songs to an iPod takes only a couple of minutes. It would probably take the same time to transfer one movie. (Not to mention the disparity in length of entertainment per GB.)
    The ability to HOLD 5000 songs was revolutionary. The ability to hold one or two movies is pedestrian. (Not to mention the disparity in weight of entertainment, i.e. one iPod weighs probably more than 10 DVDs including their cases.) Which then leads to a larger storage question on your computer.
    Ease of use is probably the strongest and most obvious reason the iPod is cemented into our culture. That easily navigable menu directly dictated the iPod’s screen size. How many years and generations have gone by and the screen has stayed the same. The average mobile phone in that same time has grown to a comparable size and can display photos, record video and stream video. The Sony PSP can do all of that and more with a larger screen and is being directly marketed as a portable DVD player/video game system/PDA/MP3 player/personal flying device/jam a Betamax tape in and it’ll play it uber-device. Most portable DVD players are comparable in price to an iPod and with larger screens. So who out there wants to watch a movie on a two inch screen?
    Then there is the simplicity of just one audio-out jack. Will there be S-Video and/or red/yellow/white a/v outputs to connect the iPod Video to a larger monitor or TV?
    It seems that with all these factors and the luke warm reception your audience has given, it might not be the best idea, at least right now. (Not to mention the question: why, if they are so popular, did MTV stop showing videos and relegate that to MTV2? Which, by the way, is where I watch Viva la Bam and WildBoyz and other actual shows, not videos. The videos are playing on channels infinity+1 through infinity+12 on specialized channels you can only get through a digital cable box.)
    If anyone can overcome all these obstacles if he puts his mind to it, it’s Steve Jobs. I wish him the best and hope he lives to see the 10% marketshare and the iPod Clairvoyant. Which gives me a contest idea…

  18. Mike D. says:

    Dave: You bring up some accurate points but let’s just think about size for a second. There are two possible ways this rumored device may work. It may even work both of those two ways. It’s either a device with a tiny screen to view video or it’s a device which stores and plays back video on TVs and laptops. If it must play back video on laptops or TVs, movie sizes will still be a lot smaller than you might think. You can already encode a near-TV-quality 2-hour movie in a format like VCD, WMV10, or DIVX in only about 600 megs of space. In other words, small enough to fit on a standard CD. If the biggest iPod is 60 gigs (soon to be bigger even), that’s about 100 movies. Let’s say you designate 40 of that for your music. You still have room for 30 or so movies. More than enough for most people. So then consider the case if there’s no remote playback. In that case, each movie would be 320×240 or less so we’re talking about 150 meg files at that point. Not too horrible.

    I totally agree with you about the music videos by the way. I could be wrong but they really don’t seem nearly as popular as they were in the 80s and early 90s.

  19. Mike D. says:

    Another important thing to add here, by the way, is that studios are a lot more comfortable giving out PSP/iPod sized versions of their movies than HighDef versions. Once the HiDef version gets out there, it’s almost like a master copy. The shelf life of the mini version, on the other hand, is limited.

    That said, the video iPod certainly doesn’t look like a part of Apple’s “Year of HD” initiative. Then again, a lot can change in a few product cycles.

  20. roger says:

    I may not be quite 30 yet (but am on that side of 25) and unfortunately am not in the position to say that the said video is not the last that I have seen (I wish was sometimes). Anyhow I work with young people and would like to add a few observations to the debate.

    1. the kids spend a lot of money on ring-tones for their mobile phones (is it more than on the actual singles yet?)
    2. the kids still love videos — definitely part of the package for them, the centre I work at is constantly playing mtv etc, and they download videos when they can from the offical websites that offer them
    3. most of these kids want or already have an ipod
    4. a lot of these kids have more disposable income than I do

    Now I totally agree that there’s a lot more money to be made than solely through these music videos but I also think that this market could well be viable, with us older people helping it along by buying up concert videos. Then again I live on the other side of the atlantic pond and maybe things are different over here.

  21. Dave says:

    Hmm i was under the impression that Apple would allow more than just music videos to be displayed, they were in talks with Disney and TV companies so that movies and tv shows would also beable to be displayed on the ipod.. agreed music video’s would account for a small part of there overall market but if they allow movie and tv i think this idea is very very very profitable

  22. Anastasia says:

    Being a Producer/Director of live concert videos, I am very excited about the new iPods offering video. Music dvd sales have gone up 5% each year over the past 3 years, while music cd sales have continued in a downward spiral.

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