Reading coverage of the introduction of the latest video iPod, one might think that the wheel had just been invented. Portable video devices have been around for a couple of years, and many--like the fantastic Samsung devices--far exceed the video iPod both in form and functionality. But you rarely hear a word about them in the mainstream media.
In and of itself, the video iPod is of limited significance. The real story is the Disney-ABC content deal that Apple Computer CEO Steve Jobs struck.
Disney only went along because it's part of its effort to win back Pixar. Competing Hollywood studios have been in the chase, with Fox going so far as to offer up a juicy deal similar to one it gave George Lucas.
What's more significant is the blowback that Disney is getting for licensing its TV shows to Apple. Forget about the stink that the affiliates are making. The network TV business is toast. Soon, network affiliate stations will be as cheap as AM radio stations. Meanwhile there are advertisers who are going crazy. If they buy a commercial on "Lost," the advertisers say it should be seen on the download available at iTunes the next day.
The real problem is the Hollywood guilds, which are the film business' equivalent of music publishers. Except that the guilds have more time on their hands to sit around and think of ways to make the studios miserable.
They want a bite of the Apple deal. A big bite.
For example, the guilds only grant the studios a free pass for the use of 1,000 feet of film. That translates into approximately two minutes and 15 seconds, the length of a trailer. What's amusing is that they still think in terms of "feet." (How many bytes are in a foot?)
In recent meetings with the major studios, my interlocutors clearly stated that they were not very worried about rushing to find an online solution for their feature films. They feel that they have a good year or so to deal with the issue because online film trading isn't yet that big a problem. There's still not quite enough bandwidth, and the files are enormous. And BitTorrent really isn't that a huge concern because it still takes about a week to download a feature film.
The best entry point for the studios into the portable/online video world is through television programming, the vast majority of which is produced by the major film studios. Though it still takes much longer than a music file, episodic television represents a quicker download. My feeling is that current episodes of "Curb Your Enthusiasm," "Rome" or "Lost" have more immediacy in the mind of the viewer.
Let's face it: If you miss an installment you usually have to wait for months to see the repeat--unless, of course, you have Tivo. And don't forget that you still have the commercials and Tivo is not exactly the most portable-friendly format.
My expectation is that you'll see many Hollywood players gravitate toward the Apple model but at a slower adoption rate than we saw with the music business. They just don't feel the pressure yet. As far as feature films go, that's further out still. No doubt Hollywood is going to have to revamp its business model, but it's not in any mood to rush things.
Wayne Rosso is the founder of Mashboxx.
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