How Apple hurts YouTube with iTunes

By Jonny Evans

Beating Google to the punch, Apple [AAPL] seems set to switch on its cloud-based iTunes Music services pretty soon. iTunes boss Eddy Cue is in New York today, signing deals with major labels, which suggests an imminent launch of music services. But I also think Apple may counter Google's YouTube service with iTunes -- Jobs is in a hurry to change television.


Television will be revolutionized

Apple's cloud-based music services have been anticipated since the company acquired in December 2009. Many of the Lala team joined Apple with the purchase. It later transpired Apple had its new teams focused on assembling plans for video, which proved to be a difficult task.

What do we know about these new iTunes services?

Speculation says the service will let you download all the music you already own -- at least, that purchased from iTunes -- from Apple's music locker, but there could be more to this.

Some speculate Apple may introduce an all-you-can-eat music rentals; while there's also some anticipation the company might offer high-res uncompressed better than CD-quality music downloads.

Apple may also implement its recently-purchaed Siri search technology, so users will be able explore conventional online listings, alongside user recommendations and ratings carried on various social networks.

[This story is from Computerworld's Apple Holic blog. Follow on Twitter or subscribe via RSS to make sure you don't miss a beat.]

It sounds like Apple has put a lot of thought into its plans for improving iTunes. "They’ve been very aggressive and thoughtful about it. It feels like they want to go pretty soon," says a report on MediaMemo, citing industry insiders.

This is serious. iTunes generated $1.4 billion in revenue in the first three months of this year.

The plans won't stop with the US. Analyst Peter Misek at Jefferies & Co believes Apple intends building new data centers in other parts of the US and Europe in order to expand the reach of its cloud-based plans. Though of course, all of these plans could founder on the shoals of bandwidth.

But what about video? What about YouTube?

iTunes TV, more than just TV

Let's speculate that Apple has been developing new services for TV and movie consumption via its iTunes platform. Imagine that these include both rental and sale of titles, TV series subscriptions and more.

Let's also speculate that iTunes users will be able to sign-up for "channels" of iTunes-carried entertainment.

There's obvious categories: Classic movies, documentaries, education (free), hit TV shows and so on.

There's less obvious channels: Ping (Apple's sorry excuse for a social networking service) recommendations; What my friends are watching; Genius recommendations.

In theory, at least, Apple could offer a fully integrated and completely personalized TV viewing experience to anyone using an Apple TV, iOS device or Mac, so long as the TV and movie studios play ball.

Apple's could perhaps use an App-based system for future TV -- hence recent activity in the App space by broadcasters.

Driving a business plan

Broadcaster control of viewer access Apps provides them with opportunities to arrange sponsorship deals, for example. What I'm arguing is the need for a solid business plan designed to replace the subsidies they enjoy when playing with the established broadcast models. This isn't a technology debate, but a move to new business plans, underscored by better services.

Perhaps fear of Apple's plan to offer television shows on a subscription basis via iTunes is part of what inspired Google to create YouTube channels.

A thought on Flash, ignore it. Its days are numbered. Why should video service providers pay Adobe to use its proprietary video technology when more open standards exist?

Broadcasters and platform providers must focus on building the best possible business plan  to underpin the emerging micropayment-based media industry. The priority has to be making good money to share between the content creation and distribution value chains. Paying Adobe's licensing fees is not that priority.

What Apple brings

Apple already boasts powerful video authoring/editing technologies,  iMovie and Final Cut. All its devices know how to handle video. So how could Apple's purported iTunes TV/Movie services be better than YouTube?

I've been imagining a few potential scenarios:

  • You're watching a TV show or a movie and you like something so much you want to share it with friends. You take a clip (up to 30-seconds) from the show, which is then made available as an asset (with an embedded purchase/rental link). You can then post the clip to Facebook, Ping, Twitter, via email, through your own Website. Imagine how quickly internationally important news items or classic movie moments could propagate globally with such a service.
  • Apple is licensing its AirPlay streaming media service to TV manufacturers. In future you'll march into a friend's house, or take your seat on an airplane. With a few taps you'll be watching your choice of show on the screen, beamed from your iPhone, iPad, or iPod touch+.
  • Next time you log onto Ping, rather than the insanely quaint experience you get from the failed network today, you see something more interesting. The news feed might offer you info on:
  • TV shows your friends are watching;
  • Comments and conversations about those shows -- but only from friends;
  • Twitter threads on specific items, and more;
  • All nicely infested by those user-chosen 30-second clips. There's even built-in YouTube access.
  • You'll even be able to chat face-to-face about what you're watching in real-time, using Facetime.
  • Want user-submitted content? No problem. With video capture in iPhones, iPods and iPads, it isn't hard to imagine that Apple users are already among the world's largest producers of video content. Why not share it via Apple's iTunes services?
  • Like music? You'll have access to every available music video, including Genius support that means you can watch consecutive videos from bands auto-magically selected for you and based on your own musical tastes. Just like MTV used to be, but, erm, better. Much better.
  • Enjoy festivals and live music events? Surely it won't be too long until live event streaming becomes de rigeur. Apple intends streaming selected performances from across its 31 night music extravaganza, the iTunes Festival, in July. YouTube is also offering streaming services for iOS users.
  • Education? Take a look at iTunes U for a taste of the huge quantities of educational video already available for free. Add video podcasts in all manner and hue and I think you're looking at a compelling service.

That you will also be able to access all your music, play games and use Apps makes this potential iTunes offer even more compelling. That you'll be able to achieve this using your own television set, a computer, or any Apple mobile device makes this even more compelling. If you stop to think about it, this is a natural evolution of the Sony portable entertainment dream as espoused by the Walkman, and then bought into the digital age by the iDevices family. The only question is when Apple might choose to offer services like these.

What do you think about this? Drop me a line via Twitter or in comments below and let me know. I'd like it if you chose to follow me on Twitter so I can let you know when these items are published here first on Computerworld

Copyright © 2011 IDG Communications, Inc.

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