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Thursday, September 07, 2006

Going Mobile: Entertainment Industry Futures and Apple's iMovie


The news is out now. Apple Computer's iTunes service is about go wide screen. Apple will start offering many full-length feature films online. Apple Computer is about to introduce a video iPod, with a larger screen that will be show movies in sharper resolution than current iPods now allow.

The details are to be revealed on September 12 at the Apple Expo in Paris. The movie download service begs to be given a new name. iMovie, iFilm, iVideo and iFliqs were quickly offered up by my students. We checked the web domains out and determined iMovie will be the name of the new service. The iMovie application is already installed on MAC computers so the choice is clear.

Apple CEO Steve Jobs is a board member of Walt Disney Corporation. Jobs owns a few shares of stock in Disney (DIS) and Apple Computer (AAPL). Some Disney movies will no doubt be made available early on the new iMovie service.

What is not so certain is the future of competing media services. The music industry is experiencing a major shakeup mainly because of internet music downloads. Legal or illegal online music services and discount retailers have caused traditional sources like Tower Records to close shop. iTunes killed the record stores. Will iMovie kill the movie theater or video rental business? For the short term the answer is 'no.'

The quality of 'legal' video content downloaded through services like iTunes still makes them unsuitable for viewing on high definition televisions. Will the new James Bond movie really be so interesting on a tiny iPod screen? Home movie systems require an image and sound quality that can only be delivered by DVD performance at the present time. Theater owners are installing digital projection systems. The movie industry will not relinquish control over content to Apple Computer as quickly as the music industry did.

Competition for Apple's iMovie service is also more robust than current iTunes competition. Competitors include Verizon's FiOS fiber optic television (VZ), traditional cable TV services, and satellite television. NetFlix (NFLX) and Blockbuster OnLine (BBI) are just two of many services that deliver DVD movies to your mailbox. One can even imagine an enhanced version of YouTube.com delivering independent and maybe even mainstream movies through a broadband internet connection.

The last sentence in the previous paragraph hints at where the real future of online movies will be determined. People want the freedom to enjoy entertainment and news where they are right now. DVD players can be carried anywhere. Cars and trucks now come equipped with DVD players. Apple will need to start convincing vehicle manufacturers to put an iPod video socket next to the iPod audio socket that was recently added to many new car models.

The service that provides wireless broadband access to the most major markets around the world, for the lowest price, may be the real winner of the entertainment race five years from now. People of many races and nationalities will demand relevant content in their language, wherever they live. New Bollywood movies must be quickly available in Nairobi as well as Fairfax County or Silicon Valley. Perhaps XM Video (XMSR) or Sirius (SIRI) video satellite services will deliver movies in the near future. Don't touch that dial, stay tuned for more news from your local blog network!

Related News:
CNN article
New York Times article
Washington Post article

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