July 18, 2005 1:27 PM PDT

Apple videos hint at film ambitions

Apple Computer CEO Steve Jobs is famously secretive when it comes to sharing plans for his company's future.

To find clues, however, you need only look as far as the latest versions of the iTunes Music Store. You can't help noticing support for podcasting, or "radio reborn," as Apple puts it.

Look beyond that, and you'll notice that since May, the iTunes software has allowed you to play videos, movie trailers or even home movies. The store itself has begun selling a handful of music videos, with more being added each week.

Record label sources say Apple has been in talks to sell a much wider range of music videos through the store, probably as soon as this fall. The company also has indicated to media executives that an iPod that plays video could be unveiled as early as September. That leads some industry insiders to believe that Apple is working on an online movie store and a video playback device that does for movies what iTunes and the iPod have already done for music.

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What's new:
Apple may be working on an online movie store and a movie playback device that does for movies what iTunes and the iPod have already done for music.

Bottom line:
Industry observers caution that the iTunes phenomenon will be a tough act to follow, and they figure Apple will take incremental steps later this year and next rather than diving headfirst into video overnight.

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"Apple was a pioneer in digital music downloads, and Macs are great for audio and video," said Mike Homer, a longtime Silicon Valley executive and well-connected Apple alumnus. "This makes them well-positioned to introduce video on a grand scale."

Homer and others caution, however, that the iTunes phenomenon will be a tough act to follow, and they figure Jobs & Co. will take incremental steps later this year and next rather than diving headfirst into video overnight.

The biggest challenges are on the business side, not in technology.

Apple must strike a deal with Hollywood executives, who worry about copyright protection on the Internet and don't want to jeopardize DVD sales, which outpace sales at the box office. Apple also must compete with cable television giants such as Comcast in the movie download business.

Beyond that, Apple must come up with a plan to make a profit from video, just as it did with music. Apple makes almost all of its music business money selling iPods, not from the iTunes Music Store.

But if anybody can succeed, it will be Jobs, according to many industry executives and analysts. They cite Jobs' leadership in digital music as well as his Hollywood contacts and experience as chief executive of Pixar Animation Studios.

"He's the greatest entertainer and showman in the business," said one prominent Silicon Valley venture capitalist.

"Anything else you can give to a consumer that they don't get on a CD is really cool."
--Chris Sims, music video editor, Timecode Entertainment

Some Hollywood filmmakers agreed that, with help from Jobs, legal Internet sales of their movies could transform their business.

"The business is going to go down, down, down before they finally realize what Steve Jobs and a few others have already realized--that there is a way to make a business model out of this and then people won't steal it quite so readily," George Lucas, director of "Star Wars," said last month on CNBC.

Apple executives declined to discuss their plans. When asked at a conference last month whether the company would sell video via an iTunes-like store, Jobs said Apple's "actions of the future" would answer that question, adding that it is working on "great things" in its labs.

Poker-faced Apple already is showing some of its cards, however:

• Besides providing video support on iTunes, Apple's latest version of QuickTime comes with the H.264 codec, which lets consumers view high-definition video with less bandwidth and storage space than its predecessors. H.264 shipped with Apple's latest operating system, called Tiger, and a preview version of the software is available for Microsoft's Windows.

• The computer maker has been rolling out new products such as the Mac Mini and Airport Express, which costs $129 and is designed to wirelessly stream music to a stereo. Future versions could be designed to handle movie and television, as well. Apple's agreement to use Intel chips starting next year also will make it easier to build a low-cost home media player, many experts argue.

• Apple is getting more serious about embracing the entertainment business' biggest concern: protecting the intellectual property rights of movies and music. Jobs' experience as a moviemaker provides added credibility.

Apple is making its biggest strides in software. When iTunes launched in May, four bands provided music videos: Gorillaz, Morcheeba, Dave Matthews Band and Thievery Corporation. The total has since expanded to more than 16.

In most cases, the bonus videos are bundled with albums, often at a $1 premium. Examples include Billy Corgan's "TheFutureEmbrace," Coldplay's "X and Y" and Missy Elliot's "The Cookbook," each priced at $11.99.

"Anything else you can give to a consumer that they don't get on a CD is really cool," said Chris Sims, a music video editor at Timecode Entertainment in Los Angeles. "A bunch of artists see this as an option."

The iTunes store also does a better job of promoting movie trailers, which Apple has shown for years on its QuickTime site. The iTunes

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16 comments

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Hmmm
Perhaps we'll see an AirVids added on to the Airport Express, a video iPod, HiDef movies being purchased over an application named iStation, and the downfall of worthless encodings such as REAL and Windows Media.

I think, if anyone will do it, it WILL be Apple. The industry has faith in him and his company and engineers. They will, no doubt, be the ones to bring us our entertainment.
Posted by (461 comments )
Reply Link Flag
Revenge of the Newton
We all know the video iPod is coming, but are we overlooking
something? 4200 rpm just doesn't cut it for my tastes. What is the
PSP running? Archaos?
Posted by Darwin Hall (36 comments )
Reply Link Flag
re: PSP
The PSP is hard-driveless. The UMD mechanism is the only movable part that reads the memory; all other memory is accessed by Memory Stick Duo, which is a solid-state interface.

That OS that is used is proprietary Sony.

I'm confused, though, how the PSP pertains to the 4200 rpm hard drive.
Posted by Christopher Hall (1205 comments )
Link Flag
As if Apple was first?
Apple is not even the first entrant in this area yet the media acts like the other products don't even exist. What about companies like iRiver? Guess their video players don't count?

Give me a break. The iPod does one thing and does it well, but there are better products out for a better price.
Posted by madpiper56 (15 comments )
Reply Link Flag
Name one
Name one product that produces superior sound, and a better user interface. You can't because there are none. I've played with MP3 player on the market and none of them are as intuitive as the iPod. NONE. Dell? Slow-scrolling, clunky. iRiver? Useless interface. Sony? Sure, let's take an hour ot get to the bottom of my library. PFT.
Posted by (461 comments )
Link Flag
It's not that Apple is the first, it's that...
they expect Apple to do for portable video players what Apple did for portable audio players. The market for portable audio players was already around before Apple came out with iPod, but it wasn't going anywhere until iPod burst onto the scene along with its iTunes software and music store, and the rest is history.

The portable video player market is at the same stage as the pre-iPod mp3 player market. It's there, but sales are low and there's nothing real exciting taking place. If Apple enters the market, then it will have to be seen if the iPod phenomenon can be recreated. I doubt it. watching videos is not a passive action, as is listening to music, that can be done while doing other activities.

Very young people may like watching videos on a 2-inch screen, but Steve Jobs has already predicted that most people won't go for it. Will he prove himself wrong by coming out with a top-end iPod that plays videos?
Posted by Juster444 (33 comments )
Link Flag
How I'd like it:
Here's how I'd like an Apple movie service to work:
1) Find movies on store (iMovie store??)
2) Pay $8 or so and download movie to hard disk
3) Be given option to burn x number of DVD copies of movie at
full quality (H.264 can accomplish this at low data rates and file
sizes)
4) Movie can also be put on video iPods, streamed around the
house

I think the DVD option would be crucial, because for many
people who've invested already in DVD players, they'd like to be
able to keep using DVDs and not have to stream everything,
although that would be an appealing option as well. Most Macs
have DVD burners now, and PCs are catching up, so it wouldn't
be difficult. The downloaded data could include the data for the
menu and stuff.
Posted by iKenny (98 comments )
Reply Link Flag
Mac Mini?
"The pint-sized $499 computer looks and works more like a
media PC than a laptop or desktop."

How does it *work* more like a media PC? It functions exactly
the same as any other Mac. It might look more like one because
of its size, but I can't see how it works being used to predict
Apple's entry into digital video sales. It has the same Mac OS X
operating system and the same iLife applications as any other
Mac... so that would mean that every Mac "works more like a
media PC than a desktop or laptop," which is not the case.

Poor argument, Cnet.
Posted by hatandglasses13 (68 comments )
Reply Link Flag
Macs are media PC's
Replying to your comment, so that would mean that every Mac
"works more like a media PC than a desktop or laptop," which is
not the case.", I must beg to differ. I think every mac is much
closer to a media PC than a desktop. The combination of OSX
and ILife make the Mac a natural digital entertainment system.

I think that although there may be a video IPod, an Apple move
into downloadable and streaming video content is much more
likely to be tied to their computers. This could likely be a big
part of the Intel switch.
Posted by miketkrw (86 comments )
Link Flag
Can someone please explain "podcasting" to me?
I don't understand what it is or how it works. If it's not too much trouble, may I ask for some assistance? Thanks in advance.
Posted by Christopher Hall (1205 comments )
Reply Link Flag
Podcasts info
<a class="jive-link-external" href="http://www.apple.com/podcasting/" target="_newWindow">http://www.apple.com/podcasting/</a>

Unless you are from Redmond, WA. then the term "podcast" is illegal on the MS Campus, then you must use the term "blogcast" or "MS-Mediacast" or "Longhorncast"...
Posted by Llib Setag (951 comments )
Link Flag
iPod + Broadcasting = Podcasting
World wide radio via internet, published on the internet.

Podcasts are like TiVo for Radio.
Digital, on demand listening via subscription to radio broadcasts on your schedule. (free with Apple's iTunes software Mac + PC)

Also, YOU can be the DJ or host, &#38; "podcast" your show up to the Internet via feed link / RSS...

Have fun!
Posted by Llib Setag (951 comments )
Link Flag
 

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