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Originally Posted by Jeremy Charette
Eventually some content provider is going to learn, and corner the market with inexpensive, univerally compatible, DRM-free content.
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They have.
Its called TV. ;-)
Its not that hard to get a decent collection of digital video legally; any Media Center PC can be used to record good quality video off cable these days at pretty affordable prices. And if you don't want to bother with that, you can always hook up a standalone DVD-recorder to your cable box. Lots of people do this because it is exactly the way VCRs work; most cable DVR boxes even have settings to facilitate this. (Have you tried it? I've been capturing HD content off cable to DVD as high-data-rate SD and the stuff looks pretty good upscaled via 360. No DRM issues whatsoever so far.)
To me, the main real reason Apple has gotten so little traction in the video business is that the TV networks in particular have *always* been in retail distribution business, unlike the music studios who have generally been wholesalers (music clubs aside). So the networks are very much aware of the importance of controlling the access to the retail customer and they're not about to give it up to anybody, much less somebody with Apple's track record of bite-back.
A second reason is that the networks aren't really in the content business per-se; they are in the advertising business, primarily. Their business model is really the same as Google's; offer up content as a draw for eyeballs that you aggregate and sell to the advertisers. In fact, for years and years they were limited in the amount of their own content they could broadcast on their own networks by federal law. So the networks see Apple as a competitor. And while they're not adverse to using a competitor's distribution channel (Even today, it is not impossible to see, say, a Universal Show running on a non-NBC network.) they aren't going to go out of their way to help a competitor, especially now that DVD sales have provided them with a retail source of revenue from their libraries; syndication is no longer the last word in milking content. Or even the most profitable.
This is pretty much the same problem Sony faces in getting video downloads onto the PS3; their competitors are not going to do them any favors if they can help it. So if they're going to experiment (and an experiment is all it is for now) with online video sales and rentals via set-top boxes, XBOX is a safer bet for them than Apple or Sony since MS has been more accomodating, *asking* rather than telling the content providers how to price the content.
Long-term, the studios won't turn their backs on any revenue source so both Sony and Apple will get into the game, but it will be on the studios terms; and what the studios want is a balkanized, fractured marketplace where no single distributor can dictate terms to them. For now, that means helping Amazon, Wal-Mart, and Microsoft. Later, it'll mean helping Sony and Apple to balance out the market.
Those folks are very much aware of what happened (to them, for the most part) in the music business and they've learned their lessons.
They may not be the lessons we consumers wanted them to learn, but that's the way the game is playing out: Distribution channels matter and nobody is going to be allowed to dictate terms, whether it be pricing or DRM, to the content providers. They will experiment carefully until they find a satisfactory (to them) balance of market size, user convenience (or lack there-of) and profit.
Why Apple Can't do to Video What it Did to Music
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