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Viewing report
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On the Viability of an iTunes Movie Service – Part I (iTunes Movies to the PC)
The Diffusion Group, July 2006, Pages: 66
While 2006 may be the year of online video, it certainly hasn’t been kind to online movie distributors. User-generated content has taken the web by storm, but ‘high-value’ content such as full-length post-theatrical movie releases and the online services that distribute them continue to languish.
It is within this environment that rumors surfaced regarding the possible launch of an Apple iTunes movie service. According to those in the know, Apple has been working on this project for more than a year but was awaiting the launch of the next-generation video iPod before coming out of the closet. These same sources stressed that the iTunes movie store and the new video iPod are inextricably connected and neither would be announced without the other. This seems consistent with Apple’s model to date – tie services to hardware and vice versa – a model that has proven devastatingly effective (just ask Apple’s competitors).
Industry perception of the viability of an iTunes’ movie download service varies from (1) those convinced it will languish just as Movielink and CinemaNow have done, to (2) those convinced it will do for online movie downloads precisely what it did for online digital music – make the market. The purpose of this paper is to evaluate the viability and appeal of an Apple iTune’s movie download service using both primary consumer research (TDG recently fielded a consumer study on just this subject) and critical analysis.
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 a 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 prices points, identified the core group of consumers most likely to adopt each of different these services, and profiled these segments across a number of characteristics.
The results of this extensive analysis are featured in a two-part report series entitled On the Viability of an iTunes Movie Service – Consumer & Strategic Perspectives. Part I 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.
Part II of this series will feature 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.
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