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Viewing report
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On the Viability of an iTunes Movie Service – Part II (iTunes Movies to the TV)
The Diffusion Group, July 2006, Pages: 78
Apple's anticipated entry into the online movie space promises to change the entire landscape and serve as a catalyst for broadband-enabled home movie delivery. On the Viability of an iTunes Movie Download Service – Part II(iTunes to the TV), the second installment in TDG's analysis of online movies services, offers a unique combination of primary consumer research and market analysis to evaluate how a living room-based iTunes service would be received among US consumers.
This paper features a discussion and analysis of Apple’s iLife strategy and the role that new hardware platforms and iTunes will play in Apple’s entry into the home living room.
At the moment, cable companies are leading the video-on-demand charge with TV and specialty programming, not first-run post-theatrical content. Alternative movies-on-demand providers such as Movielink, CinemaNow, and MovieBeam have yet to attract a critical mass of users. As long as this continues, the film studios can bank on DVD sales to make up for declining theatrical revenue and profits.
But when a legitimate movies-on-demand business takes hold, the studios will have to rethink their business models. It is within this context that speculation regarding Apple's entry into the online movie space has heated up. Industry insiders predict that within the next few months Apple will announce an iTunes movie download service. Regardless of when the service is launched, and regardless of whether the service is a rental-only or purchase-to-own model, Apple's entry into this space will be viewed by many as a turning point for online movie distribution.
To evaluate how an Apple iTunes movie download service would be received by consumers, TDG commissioned a June 2006 study of more than 2,000 US households regarding their interest in and price sensitivity toward two types of Apple iTunes-branded online movie services – the first involving movie downloads to the PC and the second involving movie downloads to an iTunes-branded set-top box connected directly to the primary home TV. Researchers examined consumer receptivity to both of these scenarios across a variety of price points, identified the core group of consumers most likely to adopt each of these different services, and profiled these segments across a number of characteristics.
The first of this series, On the Viability of an iTunes Movie Service – Consumer & Strategic Perspectives. Part I (iTunes to the PC) contains a detailed examination of consumer receptivity towards an iTunes movie download service for the PC and portable devices. The report also features an overview and analysis of Movielink and CinemaNow, the two leading online movie distribution services, and a discussion regarding why these models have to date failed to capture a critical mass of users.
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