New iPod represents competition for broadcasters

For the first time, hit prime time shows can be purchased online the day after they air on TV and watched on Apple’s new video iPod
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Apple’s new technology opens a wide door to the entry of video podcasts, a new video-on-demand service that lets anyone produce and distribute video at a low cost.

Steve Jobs, CEO of Apple, gave broadcasters no advance notice last week that he had targeted television for the next generation of his iPod MP3 player. As a result, the news left many shaking their heads, wondering what impact this revolution in technology might bring.

For the first time, hit prime time TV shows can be purchased online the day after they air, said Robert Iger, the new CEO of the Walt Disney Co., as he stood beside Jobs at a news conference in San Jose, CA.

Some of ABC’s most popular television shows, such as “Desperate Housewives”, and “Lost”, and the new drama series “Night Stalker” will be available 24 hours after their TV premiere, without commercials, for $1.99 per episode through Apple’s iTunes. Two shows from the Disney Channel, “That’s so Raven” and “The Suite Life of Zack and Cody” will also be available.

Even if iPod users don’t choose to purchase prime time television programming, the new technology opens a very wide door to the entry of video podcasts, a new kind of video-on-demand that anyone can produce and distribute at a very low cost.

News reports said ABC affiliates were not notified of the iPod deal in advance due to a nondisclosure agreement that Disney had with Apple. ABC, according to one report, already has negotiated with affiliates to retain repurposing rights over as much as five hours of prime time programming per week. However, there was uncertainty whether putting a television series on an entirely different platform is covered by that agreement.

Apple’s announcement provided a first mainstream look at a business model likely to unsettle the movie, television, advertising and retail markets for years to come, CNET News reported.

A view from the affiliates

Leon Long, chairman of ABC’s affiliate board and general manager of WLOX-TV in Biloxi, MS, told the Associated Press that he’s not worried about the Apple deal.

Long said if viewers have the choice of watching “Desperate Housewives” on their wide-screen television with surround sound or a 2in iPod screen, they will almost certainly watch it on TV. The iPod option will likely be attractive to people who missed an episode and want to keep up with the story, he said.

He noted that two of the three series ABC is offering to iTunes are shows that require viewers to follow storylines that play out over several months.

Initially, the downloads might also appeal to those who want to try out the new product and might not necessarily be fans of the programs, which could bring these shows a new audience, Long said.

As for the chance it will pull people away from his station, Long said: “It’s certainly a risk, but I don’t think it’s a great risk.”

However, CNET News reported that analysts think the move accelerates the divorce between specific kinds of content and their delivery mechanisms. Just as many people are already watching movies primarily at home on DVDs. Consumers may stop thinking of television as the primary way to access TV content.

Even Steve Jobs, who has been publicly skeptical in the past as to whether people will watch television on small portable devices, acknowledged his move is an early experiment.

The technology

Apple’s new video iPod features a 2.5in color screen that, for the first time, can play full motion video including music videos, video podcasts, home movies and television shows.

Integrated with the Apple’s iTunes Music Store and the iTunes digital music jukebox, the new iPod system automatically downloads content — including podcasts and television shows — and keeps them up-to-date whenever the iPod is connected via USB 2.0 to a Mac or Windows computer.

The 60GB model iPod, priced at $399, can hold as much as 150 hours of video. Video capacity is based on H.264 750Kb/s combined with 128Kb/s audio.

The service uses Apple’s FairPlay Digital Rights Management (DRM) scheme, so video programs can be downloaded and played on multiple computers authorized to listen to and watch protected iTunes content, or transferred to video-capable iPods. There’s one caveat, however — videos purchased from iTunes can’t be burned to other media such as CD-R or DVD-R discs.

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