Original URL: http://www.theregister.co.uk/2005/10/13/video_ipod_analysis/

Video iPod plus Front Row: Media Center killer, or shoulder-shrug?

Are you content with the content?

By Charles Arthur

Posted in Mac Channel, 13th October 2005 14:06 GMT

OK, we've got a lot of things to get through today, so let's get started. As Steve Jobs usually says, introducing another load of, um, stuff.

So on Wednesday he unveiled a desktop computer with a remote control; iPods that can play video; and an updated iTunes Music Store that will sell you videos, and if you live in the US, TV shows.

Three things, but five big issues to be dealt with, in turn: 1) Crippled is the new flexible! 2) Low-quality and portable? That must beat actually being good, right? 3) Paid-for is the new free. 4) We've never heard of this "Yoorp" of which you speak. 5) No, the phrase "exchange rate" means nothing to me.

1) Crippled is the new flexible!

"I don't think there's ever been a slide that captures what Apple's about better as much as this one," said Jobs, backed by a slide comparing two remotes for Windows Media Center products, each with more than 40 buttons, to Apple's remote with just six buttons, used to control the new "Front Row" system on the revised iMac G5.

What, Steve, you mean that slide says "We Leave A Load Of Useful Stuff Out"? For that's what the iMac G5 with "Front Row", which lets you watch your computer's media content from across the room, does. Those extra buttons on the Media Center remotes are for functions like changing TV channels. Media Centers can watch and record and pause live or recorded TV - HD (with limits) or ordinary. And of course on Media Center you can also browse your songs, photos, mounted DVDs and videos... the latter being about all that you can do with Front Row. It doesn't make sense; you have a computer and then you sit across the room from it, like a TV, but you don't watch TV on it?

But the Media Center itself is a not-quite-cooked concept as it stands, because you can buy a DVD recorder or PVR for far less than a Media Center PC. And they'll do pretty much the same thing, with no risk of being dinged by a virus. But, you say, if I buy a Media Center PC, I get a computer as well! Except you may find it's hard to use it for both at the same time.

What's the iMac G5-Front Row combo missing? A TV tuner, of course. Once upon a time, in the days of Michael Spindler (from 1993 to February 1996) when Apple did sell computers that had TV tuners built in, because people thought that would work. Jobs doesn't think so; hence no TV capability in modern Apple machines.

Michael Gartenberg, of Jupiter Research, isn't overwhelmed by Front Row. In fact he's barely even whelmed. "I'm a big fan of the Windows Media Center platform and personally, I want the TV integration as well as the access to recorded TV as a great source of legal video content. Why pay for an episode of Lost that I missed, when I can just as easily watch it on my Media Center PC, stream it via Orb or Slingbox or copy it over to my laptop?"

If Apple was serious about the 10-foot interface, which would mean getting serious about TV, then it should snap up ElGato, the German company which with EyeTV - consisting of software plus a separate tuner box - has figured out recording both analogue and digital TV streams for the US and Europe straight onto your Mac. They've also had EyeHome, which let you watch your videos and listen to your music and view your photos, for years.

Some think that this is a stalking horse for Apple to launch a video-on-demand service. The reality is that cable, satellite and terrestrial services will always be preferable, and the increasing use of DVD recorders and PVRs means that people can make their own ad-free programming, just by time-shifting a little bit. The TV will not become a computer.

Only if the computer can take over the TV functions, and do it better, will it replace that. But cable and satellite companies are moving faster than that, and they have the advantage of having huge amounts of content. Sky, for example, is planning to start doing things using its Sky+ box linked to broadband for true video-on-demand that will go far beyond what Jobs could wish for. Front Row might seem like a promising start, but there are two things working against Apple here: its tiny size relative to the rest of the market (there are about as many Media Center PCs sold per quarter as Apple shifts in all; and Media Center is a flop in the overall Windows world).

2) Low-quality and portable? That must beat actually being good, right?

If you've encountered a Sony PSP, you've seen how a handheld video player should look. It's luscious; it's big; the screen demands to be looked at. As it happens, I first saw one in May, when the Elgato team demonstrated how they'd figured out how to transfer video from EyeTV to the PSP; they showed me an episode of Desperate Housewives. It looked great.

Compared to that, the new video-enabled iPod is just not there. Sure, Jobs said when introducing it that "The screen is so large..." but that's 'large' when compared to something smaller. The new screen is barely larger than the old iPod: 320x240 pixels vs 220x176, 2.5-inch TFT. What's new is the video-decoding chips, from Portal Player, which makes the guts of the machine, giving 30 frame-per-second real-time decoding of MPEG-4 and H.264 video.

Having said a year ago, with the launch of the iPod Photo, that there wasn't any point doing video on a handheld - that it was "the wrong direction to go", "there’s no content," "the screens are too small" and that competitors to the iPod putting R&D into providing video were "digging in the wrong place" - what does Jobs go and do? Yup, unveil an iPod that can play video.

All Apple's rivals are going to say that they were there first, and they do it better. Only Sony, though, can legitimately claim to have the better experience. With the PSP selling at a rate that does challenge the iPod, it will be interesting to see how content sales play out in the next year or so.

3) Paid-for is the new free.

Have you heard you can turn on the TV and see music videos? There are whole channels devoted to it, you know. Or you can buy a CD single and they'll often come with a video. CD singles in the UK cost about, oh, £1.89 or so. Now, it was obvious from the moment in mid-May that Apple began offering music videos both to watch for free, or bundled for viewing on your computer, that sales of them would soon follow. Consider that record labels can spend upwards of a million dollars on a music video (muc of it on all that baby oil for the fit bir... skilful female dancers on so many rappers' tracks) and if they do they're still not on the top ten most expensive music videos list. There's a huge back catalogue out there, which even with multiple channels playing 24/7 isn't going to get aired.

But put the videos on an online store, where they can get bought, and you whittle away at the monumental cost of making them. Sure, it's good for the artist, because the cost of the video comes out of their eventual pay packet; more videos sold brings closer the day when they get paid again. It's even better for the record labels because it's money for free. And it's good for Apple, because it's more business coming through its video store. Madonna and Michael Jackson's works were quickly up on the site - and into the "top 100" videos listing.

Hang on, though. Remind me why I should be paying for a music video? Does it add a lot of value to the song? In most cases, no. And if you buy them from the iTunes Store, you'll not be able to burn them to a DVD your player can understand. "We don't think the customer expectation will be to back up and store iTunes videos on DVD," said Greg Joswiak, Apple's veep for worldwide iPod product marketing. The same is true for those buying the teeny-tiny (320x240) versions of the TV episodes they missed, if they're dim enough not to have bought a PVR or DVD recorder. OK, so the small versions are ad-free, but who's got the sort of commute that means sitting for 50 minutes (1 hour minus ads) able to watch something?

The fact is that most people might want to burn their online-bought videos and episodes to DVD and watch those; more people have a DVD player than have a computer. What he was trying to say was that Disney et al won't let that happen. It's a nasty little thin wedge-shaped instance. Yes, you do "pay" for TV shows through the adverts; you "pay" for music videos through the price of CDs, and the restricted range of artists. That's not a reason for me to want to buy them from the iTunes Store, though.

4) We've never heard of this "Yoorp" of which you speak.

Desperate Housewives. Lost. Night Stalker. That's So Raven. Uh-huh, US programmes. Tell me, since these things are so closely tied to the machine to which they're downloaded, why is it you can buy them on the US iTunes Store, and not the UK or other European ones? Now, some will tell you - as Jobs sort of did - that it's because the channel that makes those series, ABC, is owned by Disney. "I know those guys," said Jobs. Indeed he does - and they know him. They're desperate to get Pixar to sign to a new distribution deal, and so you can imagine Disney was delighted to give Apple some content (suitably DRM-protected, obviously, and so small that if you expand it beyond 640x480, it'll pixellate like crazy) in return for getting a foot back in the door in the film distribution deal. (Oh, you can also buy short films from Pixar on the iTunes Store. Bet the negotiations there were tough.

"We've actually enjoyed a great relationship with Steve through Pixar," said Bob Eiger, Disney's chief. "It's great to be able to announce an extension of the relationship, with Apple. Not with Pixar, with Apple." A pause for knowing laughter from the audience. "Maybe another time, we'll see." You scratch my back...

OK, so perhaps you might think that the TV episodes being on sale in the US is just because of special dealings between Disney and Jobs. But this maddening regionalism extends to the music videos too. You can buy the music video for Kanye West's "Gold Digger" (featuring a number of the aforementioned fit ba.. skilled female dancers) on the US store; not in the UK, though. For why? The song's topping the charts both sides of the pond.

It's discontinuities like this which are most likely to rile the international users of these stores, who after all generate half Apple's revenue. And that's before you get to the Australians and New Zealanders, who are still waiting for their own iTunes Store. And speaking of discontinuities...

5) No, the phrase "exchange rate" means nothing to me.

For quite a while the excessive prices of Apple gear between the US and Europe has been a bugbear. Let's face it: the US dollar is in the toilet, for economic reasons that need not detain us. Suffice to say that the dollar-pound ratio is around the 1:1.75 mark, and we tend to pay higher taxes in the UK too.

There's no adequate explanation, then, for why a music video that costs $1.99 in the US should cost £1.89 in the UK. At prevailing rate,s it should be £1.13 or so. Even allowing for VAT at 17.5%, you'd only get up to £1.33. Someone is clearly ripping us off.

But in situations like these, it's a bit like stock markets: everyone's looking around for the greater fool to sell to. You want an iPod that plays video? Here you go. Oh, and here's some wayyy overpriced content to go on it. And here's some for your computer too.

In summary: lots of this seems to add up to a lot, yet so far doesn't. There's no doubt though that the iPod bandwagon will keep rolling, and crush more makers who thought they have something over Apple. The only thing separating any of them will be content - and Sony, being the owner of a film studio, is rather better placed to lead there. Plus the PSP is just a nice device.

And one last thing. Apple is clearly on to the rumour sites, and has worked out how to poison their sources reliably. When this announcement went out they were sure there would be a video iPod. Then Apple carefully tweaked expectations downwards - because if Jobs had unveiled the video iPod everyone had expected, well, where's the surprise in that? ®