Thursday, October 13, 2005

So, mid-day today Apple changed the mode in which people will watch TV forever and ever.

Did you see that?

I mean, I'm impressed with the new iMac v. 40,000 or whatever. Great! No, really, it's very, very cool. I love it, just as I loved the last ten iMacs that I don't own. If there's no echo in their built-in video conferencing systems, I'm already a fan of the bonus features.

Unfortunately, Jobs upstaged his new iMAc about two minutes later with the reveal of the Video iPod.

Is the Video iPod something none of us saw coming? No. It was an obvious next step, and Wall Street believed that to be so much the case that they actually DOWNGRADED Apple stock after the announcement of the cool new Apple releases. (Wall Street also downgraded Apple stock earlier this year amongst speculation that Apple had already saturated the market with iPods, which, given unit sales, they had not, but were slightly cooling. Wall Street was apparently having a fit of amnesia and forgetting Apple's ability to top themselves/ plan for obsolescence/ get their Kool-Aid drinkers in line to spend money on whatever the hell Apple puts out there with every single update. IE: Now is a good time to buy Apple Stock [League stock tips are for entertainment purposes only and should not be considered valid or reasonable under any circumstances])

Up until recently, I wasn't a fan of the Apple Computer Corp.

My irritation with Apple has long stemmed not from any hardware or software issues (well, if you go back to 1997, it probably does), but from the cool-kid on the block mentality that's driven Apple's marketing, market presence and, honestly, their price-point. Up until Apple, I never saw a company actually sulk in the corner and complain that it was a misunderstood artist.

What baffled me was that Macs, while having the user interface of the everyman, have always been priced as the home computer of the wealthy. Not to mention the price of Apple-ready or aesthetically pleasing accessories. And the aforementioned drive to make whatever you just bought obsolete.

Example: I just bought my iPod about a month, month and a half ago. Now, for a few bucks extra, I could have the Video iPod. Had I bought the Mini at the time, I would have missed the announcement of the Nano by two days. Literally, two days.

Granted, I would have returned my Mini, but you get the idea.

So why am I a fan of Apple today? And why do I think Wall Street missed the point?

TV show episodes for $1.99.

Songs for $0.99

The newest Mac, cooler version? $1699. And this is one really nice Mac we're discussing.

Yes, the Video iPod can play back your $1.99 episodes of Lost. Super. I could care less. My phone can show me a shimmying Shakira any time I like, and that, to me, is VALUE. I don't watch video on a 320x240 window for long periods of time and I doubt I ever will.

What The League is enthusiastic about is the adoption of video into iTunes.

Apple has convinced Disney television that ad revenue isn't the be-all and end-all of funding programming. Steve Jobs and Co. have somehow gotten through to the Disney Corporation that they can sell programming directly to the consumer without having to buy a full season DVD set. So long shelf-loads of DVD's. Hello very large hard-drive.

And hello profit for Apple. Who is making money every time I download a video? Apple. If I want to locate a video and play it in a nice QT format, I know who's getting $1 of my $1.99. How Wall Street missed the implications of this sea-change is mind-boggling. Nobody else is set up to be THE place to get your online the video the way iTunes is. Well, maybe Microsoft, but just to stick it to The Man, I'm going with Video iTunes.

Has the technology been around for four years? Sure. The price point they've decided upon is the real break through. $1.99? I pay that for gum every two or three days. It's now officially 1/4 of the price of a movie ticket and I OWN it.

In two years I'll be able to download episodes of Smallville at 44 minutes a pop without having to watch a single commercial. (Perhaps the show will be cheaper with an ad for the new Le Baron on front, should I choose not to pay premium price). I will be able to download virtually any movie I like from Apple for a low cost (I'm guessing the cost of a movie ticket) and own it.

But the programming changes and changes to viewership habits?

1) Programs which have a rabid but small fanbase might continue to thrive at a premium cost to the cult audience. (I am still angry over the cancellation of Andy Richter Controls the Universe. Firefly fans could have kept the show going for another season or two.)

2) Networks will become a useless commodity. Viewers will pick whichever show they wish to watch from a production company's web-service or a location like iTunes. (I suspect there will be some consolidation of, say, shows along a theme).

3) Changes in formatting for non-narrative programs. The line between computer and information gathering/ instruction breaks down. And the format of the programming breaks down with it.

I could foresee a FoodNetwork location to download cooking shows that you can actually watch and match step for step as actual instruction.

Headline News could be nothing but a streaming medium or a downloadable segment of sections, skipping sports or weather if you don't care about those topics.

4) The Octavio option: My co-worker has long bitched about the fact that he has to buy cable "packages". The League doesn't watch the NASCAR channel, but I am paying for it out of my cable bill. Okay, so if I can pay for an episode at $1.99, can I pay $20 for a season pass? Or $75 for all the programming that network has to offer?

Or do I pay a monthly subscription rate to download X number of hours of programming?

You tell me, Michael Eisner.

I know I'm paying somewhere around $12/ a month for HBO now.

5) I don't have to worry about TV shows remaining beholden to the wildly arbitrary FCC standards simply because the material travels over airwaves. Once you're not using the broadcast spectrum, those rules no longer apply. Like HBO, adult TV can reflect adult life without constantly worrying about Pollyannas of all ages stumbling upon your show and becoming emotionally scarred.

6) Rated versions. So you DON'T want nudity in your TV (in which case, we have nothing to talk about)? Or you think "dammit" should be overlayed with "jeepers" at every opportunity? Production companies have an option of offering a "clean" version. I can do this with the latest offering from OutKast on iTunes. Why can't I do this with my TV shows?

7) Shows and networks will no longer worry about whole megacorps pulling sponsorship for a misstep, as advertisers will no longer dictate taste.

8) Television programs will no longer necessarily be written to have a break every 10 minutes so you can see another batch of ads. Who knows what the format would look like?

9) Live events like football. They lose their punch once you know the score. It's why I've never watched a single game which I've taped. Live events will need to be handled traditionally, I suspect, and will give advertisers some of the older model to play with.

10) Give me the same ability to move my DVDs to my iTunes that I did with hundreds of my CDs, and I will be your monkey boy for all time.

I worry about DVD format going obsolete. I worry about it all the time. I literally gave away hundreds of dollars of VHS tapes three years ago and spent hundreds picking up DVD replacements. Tell me I can copy my movies to iTunes, and I will never, ever look back. Tell me that $20 investment from last year in my director's cut DVD of "From Justin to Kelly" can stay with me until I die, following me from computer to computer, and I will tattoo whatever DRM clause you want me to onto my forehead.

Just don't tell me I have to start over completely when Toshiba figures out how to store movies on some solid-state block of crystal.

11) How will advertisers survive? I don't care. If this is bad news for them, tough. They feared TiVo, but they hadn't really seen anything like this yet.

Will more shows wind-up like "American Idol" where product tie-in's are a huge part of the programming (ie: the Coca-Cola Lounge)? No doubt. But that's a decision producers can make and set price-points accordingly.

Has all of this been around before? Yes! For years!

But so was downloadable music, and look at the raging success of iTunes. Apple does something RIGHT with the market for music. Maybe it's the exceedingly simple interface. Maybe it's the Apple name brand equating quality. Maybe it's the punchy commercials for the iPod (now being co-opted and lame-ified by the commercials of the kids dancing with their phones). I don't know. But I do know I trust them to deliver and to lead the pack for the next several years.

THis is going to take a while. $1.99 is still not cheap enough. The monthly cable bill is a fraction of what it would cost for me to download every hour of programming I currently watch at $1.99, and even at $1.99, I'm not sure how many new new shows I would try. I suppose pilots of shows would be free out of necessity. And that's a huge gamble for any network.

There's a huge audience who won't want the model to change, and so that'll go on for a generation or more, I guess. So advertisers can continue to subsidize programming.

But given the abject failure of cable television to really "break the mold" when it comes to programming, Im curious to see what happens. Cable has meant the proliferation fo what already existed rather than a mass movement to original programming. Julia Child and the Frugal GOurmet pre-date cable, let-alone FOod Network. NFL football was an early staple of TV, now it has ESPN, the NFL network and a million variations of pay-per view and deals with Direct TV.

Yes, this is all BS we covered in week 10 of RTF 101 when we discussed the impending world of digital convergence, but that was 11 years ago. I've been waiting so long, I'd sort of thought that it was some sort of blue-skying that Madison Avenue had somehow curb-stomped into submission.

I now open the floor for debate.

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