Apple TV 'will decide OMD future'

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Apple's $299 device allowing consumers to wirelessly transfer downloaded video content stored on a personal computer to the TV will decide the future of the online movie download (OMD) business, according to US digital researcher The Diffusion Group.

Apple TV was unveiled in January by Apple founder Steve Jobs, who described the device as a "DVD player for the 21st Century". After a short delay Apple began shipping the device—which can store up to 50 hours of video on its 40GB hard drive—to US stores last month.

"At this point, the entire online movie download sell-through market hinges on the success or failure of Apple TV," said Dale Gilliam, director of primary research at The Diffusion Group.

"Without a way to stream movies to the TV, the OMD sell-through market remains little more than a niche/stop-gap between the current physical-media-dominated distribution model (the DVD) and a totally network-based distribution model where movie access is instant and physical media either does not exist or becomes part supplement and part novelty, like older technology often does."

Gilliam said that while digital media adapters intended to bridge the gap between the internet/PC and the TV were first introduced five years ago, no manufacturer has scored a mass market breakthrough.

"Now that iTunes offers movies, the primary obstacle Apple must address is creating a value proposition and market message that will spur consumers to dip their toes into the PC-to-TV streaming video pool," added Gilliam.

Lovelace Consulting  |  25.04.2007

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