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.
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.
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