Someone Check Steve Job’s Pipe, I Don’t Think That’s Tobacco He’s Smoking in There

Live from the Steve Jobs Keynote — “It’s Showtime” – Engadget So it looks like I’m going to be the last one out today with a few thoughts on the big Apple announcements today. Engadget did a pretty good job a covering the announcement blow by blow.

Here are my thoughts on the announcement today.

New headphones, cool. Album art in iTunes, super cool. Crappy games at $4.99 each? not so cool.

Longer iPod battery life, more storage, smaller, etc. Yes, all good things of course.

Near DVD quality at 640 x 480 resolution? at $12.99 a piece? Me laughing my ass off and spitting up my Dr. Pepper. No way in hell. Well. I shouldn’t say that. Certainly MSN Spaces has proved that if you’ve got big enough distribution people will accept even the crappiest of things from you.

And then we have iTV.
So let’s see. I’m going to pay $300 for a little dongle that will allow me the privlige of paying Apple $10-$15 to buy movies from them at less than DVD quality to watch on my new HDTV Plasma? Or…

I can just stick with Netflix, pay a heck of a lot less and not have to buy the $300 little dongle thing.

The problems with the little $300 dongle are:

1. It’s not even out yet.

2. People are buying HDTV sets. Maybe the mainstream is not there yet but they are almost there and once they see Discovery HD Theater for the first time they will never want to watch low res crap again.

3. People who want hot new content for their new HDTV plasma will not want almost DVD quality.

4. We havent’t even started talking about HD DVD and Blu-Ray yet which are around the corner and will blow “almost DVD quality” away.

5. With the introduction of the new HDTV TiVo earlier today, the new dual CableCARD HDTV Media Center (and XBox 360 extender units for multi room viewing) due out early next year, as well as relatively inexpensive HDTV PVR offerings from the cable and satellite providers (unless you happen to be DISH and are screwed), why in heaven’s name would anyone pay Steve Jobs $10-$15 for crap quality content?

Yes, yes, there will always be the appleheaded lemmings who will buy anything Apple whatsoever but this is clearly *not* a very good value proposition.

Scoble gets it right when he says, “They just announced movies. And both TV shows and movies are now encoded at 640×480. The movies are selling for $9.99 to $14.99. I still don’t get why I wouldn’t just rent movies from NetFlix, especially since DVDs are better quality?”

Yes there might be application for buying stuff for the kids or for traveling, but there are already MCE units and TiVo units with DVD burners that can burn low quality content for you if that’s what you really want. In fact with my MCE machine today I can simply record movies off of TV and then just copy them over to my laptop and watch them on the road for free.

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28 Comments

  1. Ade says:

    Yeah, I’m with you on most of that but, re: “Near DVD quality at 640 x 480 resolution?”

    Actually, that’s not far off. DVD PAL is 720 × 576 and NTSC is 720 × 480. And some of those lines actually go off screen when viewed on a TV anyway. TV screens, especially CRTs, are just very forgiving.

  2. Ade says:

    (but no I won’t be buying them at that price)

  3. Dave Zatz says:

    Given the HD outputs, I assume by the time iTV is released Apple will be providing higher resolution content (and will have tons more partners). Though I think their business model is flawed: I don’t want to pay $9.99 – $12.99 to *buy* a movie I can’t burn. But I will rent a movie I can’t burn in the $3-$5 range. Had they released that yesterday, I would have bought a Mac Mini and hooked it to a TV. Instead, I’ll continue to wait for the Xbox 360 to offer movie downloads.

  4. Greg says:

    I would assume that more than the name will change before the release. I wasn’t at the show to see it in person. I wonder if someone who was could comment on the quality. My guess is the device provides some sort of upscaling features.

    A year ago they had 5 TV shows and now they have 220 along with movies. Who knows where they will be in 6 months. Now that iTv has been announced they can get feedback from the world instead of limiting it to a small team at Apple and Steve Jobs.

    I would also be interested to know how many people are actually watching HD on their new flat screens. I know quite a few people that think digital cable is HD. Remember Apple is aiming at the masses now. Not the enthusiasts.

    Last comment. Texas Hold’em on the iPod is really quite fun. For $4.99 it is a great way to kill time while commuting. You can even listen to music while playing.
    http://dazilgroup.com/blog

  5. Ben says:

    I agree, but I said the same thing about the music and then the TV shows and despite the fact that I don’t buy content from iTMS it is still successful, they are obviously not targeting us.

  6. BoyWonder says:

    I don’t anticipate lots of studios quaking in their boots at the Disney/Apple partnership. In fact, I’m a little surprised that AAPL only came out on this product with one major studio.

    As I work for a major retailer, I will say that we will happily send our millions of unsold DVDs (priced at $15-20) back to Disney for a refund if they are going to partner up with someone who’s going to steal our sales. I hope Apple sells a lot of product, or we’ll be writing Disney’s obituary on this one.

    That’s why I don’t foresee Apple having loads more content by Q1’07. No one wants to piss off the retailer channel and there is no proof that this new distribution channel will expand the overall market size.

  7. gbor says:

    Well, the advantage Apple has over Netflix right now is that you can start watching your Apple download almost immediately while you’ve got to wait for your Netflix DVD. Of course, the rumored Netflix-to-TiVo download service would negate this advantage. And as Dave said, the Netflix rental/subscription model is much better than Apple’s purchase model, giving Netflix the advantage. And going directly to the set-top rather than through a computer first also one-ups Apple. Now if only the price on that new TiVo would come down…

  8. kip says:

    What if the rumors that apple is courting Tivo are true and that set top box is the Tivo with expanded firmware to play nice with itunes,etc? Series 3 becomes a bit more attractive now in my mind.

  9. Anonymous says:

    The convenience of pointing and clicking is important to remember here. In our house, we are much more likely to put a show on the Tivo for our kids then to dig out the DVD case. It’s kept us from buying that many DVDs. They’re a pain to keep track of. If I can point and click and bring a movie up on my screen in a few moments that’s worth a lot to me. In order to serve downloaded movies Apple needs to use P2P technology.

  10. Anonymous says:

    I think you’re wrong.
    You seem to forget that people pay more for a 128 kbps album in iTunesthan buying the CD NEW from Amazon or whatever.
    Apple is about the EXPERIENCE, not the number of pixels being 640 or 700 or 720.
    If the Apple Experience of buying movies is good, no hassle and works a LOT of people will buy movies from the store. And if they want DVDS they will also play them from their mac to the iTV thing. Time will prove me right

  11. Anonymous says:

    It is being marketed as for “legal / pay-for media”, hence the partnerships with studios, but what it will really do is allow both public domain/free (e.g. YouTube) and pirated/free (e.g. movies downloaded from Bittorrent) to be seen on the large screen TV, as well as home movies. Apple doesn’t need to sell the movies to make money, they just need to sell the hardware, movies are just gravy.

  12. Worldawaits says:

    iTunes. It’s iTunes. That’s the game. iTunes is the mother ship, and iTV is just another tentacle. It will sell, though not big — smallish market to begin with. But it’s only the beginning.

    Downloads will bury Netflix, and it won’t take all that long. And just like iTunes video downloads went from 320×240 to 640×480 after a year, the max res will jump again in due time. The economics will improve, and the joys af a la carte and instant gratification will become dominant.

    You’re right for you, and you’re right short term, but the iPod (iTunes) “ecosystem” will continue to adapt and prosper.

  13. Anonymous says:

    I believe Steve and the boys at Apple are smart (they’ve proven that already). The idea of selling movies didn’t compute for me becuase there are lots of other ways right now to do so as most of you are mentioning and bandwidth is holding back the delivery of HD is my guess. I think what will win it for this service is potentially the fact that for example the new Pirates movie will come out on DVD for $20plus maybe but will be available at iTunes for $12.99. The more important issue I think it the fact that digitally the iTunes movie store can eventually hold almost all that was ever recorded so its value will be in purchasing the obscure title, the copy of a favorite Superbowl win or World Cup game. Just like the TV service is providing now, content that isn’t at Blockbuster and events that won’t be re-broadcast. Lastly, I think this is a start towards a whatever I want/whenever I want it world. HD will come at some point (and hopefully a per month or rental fee). Would anyone complain when we get to the point that $12.99 gets you the HD version or $9 a month and you can access whatever the creative world produced .. ?

  14. Noontide says:

    If you look at the technology being included (802.11n and HDMI) and look at Apple’s history of starting basic and expanding features, you will see a clear indication that they intend to serve HD content. 802.11n is the new planned wireless standard for wireless delivery of HD content. H.264 is capable of HD quality video at a reasonable size. The only thing really missing is the ability for the box to turn your computer into a video recorder a la El Gato’s EyeTV. One thing recent history has told us is that only a fool doubts Steve Job’s ability to innovate and capture the hearts and minds of consumers.

  15. Anonymous says:

    iTunes quality is insuperior, but it still sells. My guess is Steve is targeting is iPod users first.

  16. Thomas Hawk says:

    I think you’re wrong.
    You seem to forget that people pay more for a 128 kbps album in iTunesthan buying the CD NEW from Amazon or whatever.

    Anonymous. This is the mistake. When you sit down and listen to something on CD vs. mp3 at 128 there is little perceptible difference. Your ears are less able to pick up the difference than your eyes which are a more accute sense.

    On the other hand when you watch regluar non HD TV or “almost as good as DVD” and then compare that with HDTV there is no comparison.

    I simply do not watch standard definition TV anymore and once someone has experienced real true HDTV it is very difficult to go back to low res quality. Right now the mainstream is not fully 100% HDTV of course, but HDTV is coming on fast and I predict this thing won’t sell.

    But then again, I may be wrong of course.

  17. Anonymous says:

    I’m not sure if this was meant to be a critical review of the Apple announcements, or more of a community “chewing the fat” type of thing, but since a link to here wound up in a Yahoo story I was reading, I have to comment on this.

    –“once they see Discovery HD Theater for the first time they will never want to watch low res crap again”

    Really? DVD sales are still booming at all time highs, and by comparison, that is low res crap, fyi…plus, reality is, I can only watch about 1 hour a year of Discovery HD.

    –“We havent’t even started talking about HD DVD and Blu-Ray yet which are around the corner and will blow “almost DVD quality” away.”

    These are here now, and are a major disaster for the industry. First, a format war which will only end in pain for consumers (just the opening the “computer” guys need to establish downloading…). Plus, the players costs a hell of a lot more than $300 and will for a while, and the reviews on this stuff as far as image quality etc. are less than glowing (by a lot…some technical reviewers are claiming the quality improvement is difficult to observe—HUH?). Oh yeah, then you have the fact that a VAST majority of those “new” plasmas you refer to can’t even do 1080p…plus the discs cost a lot, plus…shall I go on?

    –cable card/hdtivo/cheap dvrs/etc: good luck. HDTivo costs $800 plus $12/month. Hello. DVRs from Comcast/Moto SUCK. And, they cost $20/month where I live in Portland. The new DirecTV HD recorder has actually gone BACKWARDS in features vs. the Tivo offering they had…the list goes on and on.

    “I still don’t get why I wouldn’t just rent movies from NetFlix, especially since DVDs are better quality?”

    DUH answer: you can get it NOW! Plus, stuff comes out the same day as DVD releases on iTunes, whereas you wait (sometimes a longggg time) with NetFlix until their inventory “syncs” with your queue, plus you “own” the iTunes content (bummer you can’t burn…), netflix discs go back, plus Netflix discs are a joke, normally worn/scratched beyond belief, plus Netflix still costs $20/month, plus, plus, plus…

    Anyway, “shorting” Steve at this point in the cycle would seem to be a fool’s errand…not that everything they do is great, but holding up losers like Tivo, BluRay, XBox 360, Netflix, et al against what Apple has accomplished in a few short years is a bad idea…

  18. Anonymous says:

    You don’t have to buy any movies from Apple to justify owining an iTV. I already have quite a few movies in my iTunes that I would like to play on my TV without having to attach my computer and navigate using my keyboard. You can still record progrmming from your cable or sattelite provider or from DVDs you buy using eyeTV which is another good product. You can also bring your home movies to iTunes. Then iTV will a wounderful way to display this stuff on your tv. The other poster was right, you don’t have to buy anything from iTunes store to justify using an iPod.
    I think Hawk’s wrong with his assessment of iTV. His number one reason – that iTV is not out yet – is a little silly. Of course it’s not out yet. Neither has Vista for the past three years, but that’s not reason not to buy a product when it becomes available. As for HDTV, how many channels are available anyway? And then again, why buy DVDs when Blu-ray is just around a corner? If you think iTV is meant to replace renting DVDs you are missing the point. It’s for accessing the media on your computer from your living room TV. For that it’s perfect.

  19. Anonymous says:

    You don’t have to buy any movies from Apple to justify owining an iTV. I already have quite a few movies in my iTunes that I would like to play on my TV without having to attach my computer and navigate using my keyboard. You can still record progrmming from your cable or sattelite provider or from DVDs you buy using eyeTV which is another good product. You can also bring your home movies to iTunes. Then iTV will a wounderful way to display this stuff on your tv. The other poster was right, you don’t have to buy anything from iTunes store to justify using an iPod.
    I think Hawk’s wrong with his assessment of iTV. His number one reason – that iTV is not out yet – is a little silly. Of course it’s not out yet. Neither has Vista for the past three years, but that’s not reason not to buy a product when it becomes available. As for HDTV, how many channels are available anyway? And then again, why buy DVDs when Blu-ray is just around a corner? If you think iTV is meant to replace renting DVDs you are missing the point. It’s for accessing the media on your computer from your living room TV. For that it’s perfect.

  20. Anonymous says:

    “When you sit down and listen to something on CD vs. mp3 at 128 there is little perceptible difference.”

    This is so off base I can’t leave it alone. To say that a 128bit AAC or MP3 file approaches even the relatively low res red book audio is like saying:

    a) Boones Farm wine tastes about the same as Opus One because the alcohol content is comparable, or

    b) McDonald’s tastes comparable to Chez Panisse because the calorie content of a meal are about the same, or

    c) a Ford Mustang is about as good a car as, say, an M3 because they both have four wheels and their engine sizes are similar.

    I’ll grant you, if you use an iPod with crappy ear buds to listen to your music, then the difference is not great–like if you drive on a dirt road with your car normally, you won’t notice much of a difference in car quality. But the issue is your playback device. If you are into music and willing to spend what many people are spending on plasmas and associated gear, you can create a system for audio which will clearly show the difference in encoding quality–on my home system, I can’t even listen to 128 bit audio files they sound so crappy, yet some (not all by a long shot) CDs can sound incredible. Quality does still matter; the problem is, very few people/companies know how to do quality any more (Apple included…).

  21. Anonymous says:

    You don’t have to buy any movies from Apple to justify owining an iTV. I already have quite a few movies in my iTunes that I would like to play on my TV without having to attach my computer and navigate using my keyboard. You can still record progrmming from your cable or sattelite provider or from DVDs you buy using eyeTV which is another good product. You can also bring your home movies to iTunes. Then iTV will a wounderful way to display this stuff on your tv. The other poster was right, you don’t have to buy anything from iTunes store to justify using an iPod.
    I think Hawk’s wrong with his assessment of iTV. His number one reason – that iTV is not out yet – is a little silly. Of course it’s not out yet. Neither has Vista for the past three years, but that’s not reason not to buy a product when it becomes available. As for HDTV, how many channels are available anyway? And then again, why buy DVDs when Blu-ray is just around a corner? If you think iTV is meant to replace renting DVDs you are missing the point. It’s for accessing the media on your computer from your living room TV. For that it’s perfect.

  22. Anonymous says:

    Forget videos – it will be worth the $299.00 just to be able to disply iTunes on your TV monitor – a 42″ jukebox display in your livingroom

  23. Anonymous says:

    where do you see the dual cable card HDTV in the upcoming version of Vista?

    i havent seen a promise that it will be in Vista!?!??!

  24. Kim Roberts says:

    Boywonder –

    ‘…steal our sales’? WTF are you on about? Are you smoking crack or what?

    Ever heard of a free market economy? That’s where anyone can sell anything (within the bounds of the law) to anyone at any price they like.

    ‘…steal our sales’ – idiot.

  25. Anonymous says:

    Missing the long term inevitable trend here. Owned digitial content will inevitably move to the computer (not for everyone, but for the mainstream). That transition is happening with music today and will happen with video someday. Processing power, bandwidth and storage capacities aren’t going to stop growing.

    Not so long ago, my fantasy item to own was a huge CD jukebox. Now that looks soooo 20th century. I have TWO digital copies of all my music (computer & ipod).

    Personally I don’t think that bandwidth and storage capacities are quite there yet. But they WILL be and they’ll just be part of the iTunes ecosystem.

    None of this is new and yet, after the apple announcement, I really started thinking of all kinds of reasons I’d like my DVD library to be on my hard drive. The big barrier I see, actually, is the studios and DRM. Will we be able to bookmark and clip our favorite pieces–or will it be the DVD model that says we gotta wade through all their splash screen bullshit every time the DVD locks up and we have to restart.

    The future is content delivered over the net and stored on your computer. Even if the future isn’t quite here yet.

  26. darth says:

    The problems with the little $300 dongle are:

    1. It’s not even out yet.

    Hmmm..Thomas, you didn’t seem quite so skeptical about the “Its not even out yet” approach when Microsoft used it in November 2005 when promsing HD CableCard support “in a year”:

    http://thomashawk.com/2005/11/hot-donkey-premium-cablecard-hdtv-in.html

    BTW, keep those “lemmings” comments coming. Its nice to know MS supporters can be just as “smug” as Apple supporters.

  27. rjschwarz says:

    The world is ready for a proper media pc that can run the home television setup. The MacMini’s got pretty much everything you need except HiDef outputs. DVD, USB2 to allow for ElGato TiVo type television and a snazzy interface that allows them all to work.

    iTV has the HiDef outputs the MacMini is missing. The streaming of crappy quality video can be ignored. A proper mix of the two would create a beast people would buy.

  28. I disagree with this post but hey, everyones entitled to their own opinion 🙂