Research Study: iTunes Video Failing To Duplicate Music Success [Update]
Forrester Research, Inc has released a new research study that is critical of Apple's iTunes video attempts, and states there is room for competition in the industry.
Forrester conducted an online survey of 5,379 US and Canadian individuals aged 18 to 88. Forrester believes that only 4% of the online population buys iTunes videos, in contrast to 19% iTunes store usage. Forrester acknowledges that while those 4% are satisfied with their service, the iTunes video store will remain a curiosity rather than a game-changer.
One of the pitfalls mentioned is that there are currently easier ways to get [free] TV shows, including consumer DVR's and services like NBC Direct. Furthermore, Forrester calls out Apple's lack of a catalogue of hit movies. One result of Apple's video misfortunes is that although awareness of the AppleTV is at 45%, the purchase intent is only at 3%.
In an open letter to Apple, Forrester suggests it's time to change their video game plan, including winning NBC back (background), adding a movie rental model (rumored), funneling more web content into iTunes, and supporting an advertising model for TV shows.
Editor Update: The validity of the 4% video usage is in question, since both U.S. and Canada customers were surveyed. Canadians do not have TV or Movies available to them in the iTunes store. This would skew the results.
The iTunes video experiment of selling TV shows for $1.99 and movies for upwards of $9.99 although a great service to the 4% of online adults who regularly buy video on iTunes is not a mainstream model. Importantly, it wont translate into what Apple really wants: increased demand for sophisticated hardware like the iPod touch and Apple TV.
Forrester conducted an online survey of 5,379 US and Canadian individuals aged 18 to 88. Forrester believes that only 4% of the online population buys iTunes videos, in contrast to 19% iTunes store usage. Forrester acknowledges that while those 4% are satisfied with their service, the iTunes video store will remain a curiosity rather than a game-changer.
One of the pitfalls mentioned is that there are currently easier ways to get [free] TV shows, including consumer DVR's and services like NBC Direct. Furthermore, Forrester calls out Apple's lack of a catalogue of hit movies. One result of Apple's video misfortunes is that although awareness of the AppleTV is at 45%, the purchase intent is only at 3%.
In an open letter to Apple, Forrester suggests it's time to change their video game plan, including winning NBC back (background), adding a movie rental model (rumored), funneling more web content into iTunes, and supporting an advertising model for TV shows.
Editor Update: The validity of the 4% video usage is in question, since both U.S. and Canada customers were surveyed. Canadians do not have TV or Movies available to them in the iTunes store. This would skew the results.
Top Rated Comments
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55 months ago
maybe now they'll start offering HD video, so i can start buying :cool: :apple:
55 months ago
I want HD content and movie rentals on the music store. And for :apple:TV I want HD or BR and surround sound support. Thank you.
55 months ago
The choice of Movies on iTunes is pretty poor. Reminds me of years ago when our local store had a couple of shelves full of VHS video's for hire. The owner didn't think there was much of a market - and then Blockbuster arrived near by.
55 months ago
and iTunes music is successfull because people buy music, not rent. Opposite consumer preference for each product.
55 months ago
Last time I saw, we Canadians didn't have access to any feature films on iTunes. Maybe if that changed, the statistics would improve.
55 months ago
iTunes won't present a serious alternative to piracy until they can lower the prices and raise the quality. Unfortunately, that's not really up to Apple.
Every sensible person is aware that, regardless of ethics, a black market will appear if pleasant options do not exist. With the black market firmly in place, especially one as efficient and relatively risk-free as BitTorrent, is this news really surprising?
The content providers and creators are still stuck on a concept of preserving their historic profit margins, even though it's clear to most of us that they'll have to compete with the (free) black market just to survive.
Every sensible person is aware that, regardless of ethics, a black market will appear if pleasant options do not exist. With the black market firmly in place, especially one as efficient and relatively risk-free as BitTorrent, is this news really surprising?
The content providers and creators are still stuck on a concept of preserving their historic profit margins, even though it's clear to most of us that they'll have to compete with the (free) black market just to survive.
55 months ago
Here we go again. The same moron analysts (mind you, not ALL analysts are morons... I'm an analyst :D) who said the iPod would go "nowhere", and then on scant third party data claimed iTunes sales were collapsing, are tooting their horn yet again about iTunes Video.
Well, it certainly didn't die back when I posted this rebuttal on Slashdot to their earlier misgivings that they are simply repeating ad nauseum.
While the Forrester article has the appearance of news, it's just more hot air to further discredit the internet as a source of newsworthy information.
The strategy Apple is deploying is going to take some time to seep into the public consciousness, something Forrester doesn't grasp. iPods were not a success overnight... they were around for three years before they really took off... and it was that "doomed" iTunes Music Store that, once it found its footing, contributed to the success of the technological convergence model Apple is building upon. The same model of technological convergence that involves various pieces of the puzzle.
The truth is, video sales have been stellar for Apple more than they have for any other online outlet. If anyone can make it work by sheer will, Apple has that ability. Note that I am not claiming what WILL happen in the future... I just think Forrester has a history of being a harbinger of nonsensical "research" and unsubstantiated conclusions.
Well, it certainly didn't die back when I posted this rebuttal on Slashdot to their earlier misgivings that they are simply repeating ad nauseum.
While the Forrester article has the appearance of news, it's just more hot air to further discredit the internet as a source of newsworthy information.
The strategy Apple is deploying is going to take some time to seep into the public consciousness, something Forrester doesn't grasp. iPods were not a success overnight... they were around for three years before they really took off... and it was that "doomed" iTunes Music Store that, once it found its footing, contributed to the success of the technological convergence model Apple is building upon. The same model of technological convergence that involves various pieces of the puzzle.
The truth is, video sales have been stellar for Apple more than they have for any other online outlet. If anyone can make it work by sheer will, Apple has that ability. Note that I am not claiming what WILL happen in the future... I just think Forrester has a history of being a harbinger of nonsensical "research" and unsubstantiated conclusions.
55 months ago
and iTunes music is successfull because people buy music, not rent. Opposite consumer preference for each product.
A penetrating observation. Amazing to me that multi-billion dollar corporations can't seem to grasp what every young family already knows instinctively.
55 months ago
For an interesting comment on the report by Daniel Eran Dilger at RoghlyDrafted Magazine:
http://www.roughlydrafted.com/2007/12/06/forresters-james-mcquivey-announces-the-death-of-itunes-again/
There seems to be some errors and mistakes in the report...
/ Påhl
http://www.roughlydrafted.com/2007/12/06/forresters-james-mcquivey-announces-the-death-of-itunes-again/
There seems to be some errors and mistakes in the report...
/ Påhl
55 months ago
Forrester conducted an online survey of 5,379 US and Canadian individuals aged 18 to 88. Forrester believes that only 4% of the online population buys iTunes videos, in contrast to a total of 19% iTunes store consumer population. Forrester acknowledges that while those 4% are satisfied with their service, the iTunes video store will remain a curiosity rather than a game-changer.
US *and* Canadian individuals? We're still not able to purchase video in canada, beyond pixar short films, and music videos. I ordered an AppleTV at launch, because I thought Apple would finally start selling video in Canada. How wrong I was. Here I am, nearly a year later, and my AppleTV is still under utilized because I can't buy video to play on it. If video were available in Canada, I would easily spend $50-$100 a month on tv/movies.
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