Microsoft: TV must avoid "iTunes moment"
updated 07:50 am EDT, Mon August 31, 2009
MS on TV and iTunes Moment
The TV industry needs to find a convincing online strategy or else risk handing the market over to Apple, Microsoft's UK managing director of consumer business Ashley Highfield warned this weekend. Speaking at an international TV industry festival in Edinburgh, the executive warned that TV could "face its iTunes moment" in two to three years and hand over control of online video to Apple. Without a quick shift in emphasis to TV on the web instead of traditional service, customers are predicted to flock to paid download services and bypass regular providers altogether.
Solving the problem will likely involve pushing targeted ads, bought through an auction-based system. Although it wouldn't fit the conventional TV model of buying ads based on the overall likely audience, it would boost the worth of ads to where advertisers would have more incentive to pay for TV shows online than on old, declining services like cable or satellite.
These changes should take about two to three years themselves, according to Highfield.
The warning is a reference to Apple's seeming control of the digital music business. In 2003, Apple took advantage of music labels desperate to provide a viable alternative to online piracy and obtained terms that were favorable to its own iPod sales, offering songs at a fixed, relatively low 99 cents per track. While the move jumpstarted the digital music market and gave portable media players real acceptance, it led to Apple controlling 69 percent of US digital music and Universal Music Group chief Doug Morris infamously describing his label as being in "golden handcuffs" as it's often beholden to Apple for success.
Highfield's statement is also an unusual concession of the digital video market for Microsoft, as it makes no mention of the company's own TV efforts. The company offers TV shows both through the Xbox Video Marketplace as well as the Zune Marketplace in the US. The two are expected to integrate soon, but neither have gained large traction compared to iTunes or to alternative business models like Netflix.
All Ready There
08/31, 08:43am reply
Put all old DVDs on server disk.
Use Apple TV to rent new ones.
Rental cheaper than all the ripping.
Apple model is right . Music is played over and over while movies or seldom played.
We have quit Blockbuster and Netflix.
There is to much media. Keeping it simple with Apple TV has capture our family.
We only wish that the rentals were three days to get use through hectic weekends.
starwarrior
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Joined: Mar 2006
Mr. Pot, meet Mr. Kettle
08/31, 08:44am (1 reply) reply
Microsoft... warning people about the dangers of monopolies... ummm
joecab
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Joined: Apr 2004
Translation of
08/31, 09:25am (1 reply) reply
Microsoft FUD speak =
We want to dominate you like we do 90% of the desktop computer market. We don't want you to pay the "Apple tax" of paying less for programs than what we want to gouge you for...
philomath777
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Joined: Mar 2004
this
08/31, 10:05am reply
from the company that did everything it could to try and own the web, destroy every competitor to the desktop, bundle it's way to dominance... geesh, these people are unbelievable.
nat
Junior Member
Joined: Mar 2002
What they really mean...
08/31, 10:40am reply
We want you to run from Apple's dominance in media to us even though we have no idea what we are doing and no compelling platform to deliver it on. We have fallen out of the race and want to get our foot in the door. Please, please, please give poor old MS a bone. What have we ever done to you? Really?
BTBlomberg
Forum Regular
Joined: Sep 2005
LOL
08/31, 10:52am reply
These guys wants to own everything. It's not enough to own a monopoly (95%) of the computing market, they want to sell you underwear and tampons in the future.
slapppy
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Joined: Mar 2008
duh
08/31, 10:53am reply
Does MS really think the studios haven't already figured this out on their own?
testudo
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This is too rich...
08/31, 11:44am reply
MS as Cassandra. Did anyone remind them that they got in trouble for an anticompetitive monopoly?
jpellino
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Joined: Oct 1999
Avoid Apple's
08/31, 12:31pm reply
golden handcuffs... you really want to wear Microsoft golden handcuffs instead!!!
climacs
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Joined: Sep 2001
Bad Advice
08/31, 02:20pm reply
The advice MS is dishing out -- find an alternative to Apple now, before they take control of your business model -- is exactly what the music labels tried years ago. They looked for any alternative they could find, and when those alternatives failed, they were in an even worse bargaining position than when they started.
An online ad-supported model is notoriously hard to sustain, while Apple's model of users actually paying for the content (imagine that) is a proven success. Putting your content up on Hulu may seem like a good way of hedging, but sooner or later it comes out that you're losing a poopload of money by doing that.
jamiec
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Joined: Aug 2006