Magazine article Marketing

Andrew Walmsley on Digital: Scene Is Set for Global TV Revolution

Magazine article Marketing

Andrew Walmsley on Digital: Scene Is Set for Global TV Revolution

Article excerpt

Apple has sold more than 3bn songs through its iTunes website since its launch in 2003, making it a major force in the global music business - a position Apple is keen to leverage in the TV space. But the launch of Apple TV last year was met with indifference, mainly because the box could not access the iTunes service - sales predictions of 1m-1.5m units proved ambitious, as the box barely scraped past the 400,000 mark.

But Apple TV is back, and the recent launch of version two led to a 17% slump in Blockbuster's share price, as Apple dropped the price and enabled the box to use iTunes without the need for a computer - at the same time offering a free software upgrade to existing owners to give their boxes the same functionality.

The combination that proved so powerful in music - beautifully designed players with access to a vast online library of content - is what Apple is keen to follow in video, offering downloads to your computer, mobile device or laptop.

But there is a missing ingredient that could offer the key to Apple replicating the success in TV that it has enjoyed in music. To make iTunes successful, Apple didn't insist you had a Mac - you could run it on a PC, a necessary step given Apple's small share of the computer market.

Apple's challenge now is getting connected to the TV. With a base of just 400,000 Apple TV users, the vast majority of iTunes users are accessing the store through a computer, which they might hook up to portable devices, but generally don't connect to the main TV in the house. The king of TV-connected entertainment devices is Nintendo's Wii console, which has sold 7m units in the US alone. Releasing a version of iTunes for Wii and other online gaming platforms such as PlayStation and Xbox could jump-start iTunes into major distribution for TV content.

The battle for space under your TV is well and truly under way. In the UK, Sky has had a long run free from effective competition. But last year Freeview overtook Sky, boosted by the burgeoning popularity of digital PVRs, and, together with a resurgent cable industry led by Virgin Media and the launch of BT Vision, a much tougher fight has emerged for dominance here.

It isn't just the usual suspects that are battling for space Microsoft's Xbox gaming console already offers movie and video rental in the UK, while the Wii has the capability to follow suit and PlayStation 3 has a Blu-Ray high-definition DVD player built in. …

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