James L. McQuivey, an analyst with Forrester Research, just penned a piece for CNET on Apple’s failure to crack the online video business–despite all the hype from back in 2005, when they had added video to the iTunes Store for the first time.
“Two years later, the bad news for Apple is that the company’s media distribution strategy is not going to work in video like it did in music,” McQuivey writes. “MP3 players, including the iPod, are valuable from the day you buy them because your entire CD collection provides immediate content to fill the device. The video hardware business is different. Unfortunately for consumers, the movie industry won’t let you rip DVDs to iTunes, and therefore any one of the many devices Apple has recently added video to, including the iPhone, iPod Touch (essentially an iPhone for people with Verizon calling plans), iPod Nano video, and Apple TV. This means you can spend $299, as is the case with the Apple TV, and still not be able to transfer any of your existing video library to the device, forcing you to buy video from iTunes.”
He goes on to point out that the iTunes Store still has a meager selection due to limited deals with the major studios that prevent new releases from being sold there. And its television show business–the lone bright spot–just took a big hit when NBC terminated their contract.