Feasibility Study of a Digital Platform for the delivery of UK ... - BFI

UK FILM COUNCIL
Within 19 days of launch, Apple announced that it has sold over 1m videos through iTunes. Of these, 125,000 were short films from
Pixar. The bulk of the rest came from the two premium TV programmes available. Although the announcement was impressive, it came
as part of a pattern from Apple. The company tends to experience a rapid uptake of new products shortly after launch, followed by a
normalisation in buying patterns. For example in June 2004 the company announced that it had sold over 800,000 tracks in the first
week of ITS Europe. However, it took the service a further nine weeks to hit the 5m mark. A similar pattern has been seen with the
iTunes Japan platform launch in August 2005, which resulted in the sale of 1m songs in the first four days followed by a subsequent drop
off. It has been estimated that 40 per cent of the Apple video sales were one-off ‘experimental’ purchases by users.
Nevertheless, since this announcement, there has been a scramble from some content owners to provide content to the video iPod,
ranging from providers of adult entertainment to TV companies. The most high profile addition has been from PVR company TiVo which,
as stated earlier, made an enhancement to its TiVoToGo feature in November 2005 allowing TiVo subscribers to easily transfer recorded
television programming to their Apple iPod or Sony PSP handset.
Notably, Apple has yet to announce sales figures for its video iPod, which suggests it has yet to hit any significant milestone.
Strategic Positioning
The move from music to video for Apple has not been a great surprise, given the need for the company to continue to diversify content to
sell the highly lucrative iPods. But although Steve Jobs, Apple’s CEO, has always maintained that feature length movies do not have a
natural home in the portable environment, Apple’s move into the home media centre market has created the prospect of iTunes forming
the basis of a download platform for use of content in the living room.
The issue with Apple, however, is the closed nature of its platform --- limiting users to Apple devices --- and the single price-point policy.
The latter has created much concern amongst the music majors, who have actively refused to sign content to Apple’s new services in
2005 (such as Sony BMG in the case of iTunes Japan). The concern has been enough for studios to remain wary of using iTunes as a
means of exploiting their content online, despite Disney’s part in the video iPod launch. This scenario, if it plays out, may make Apple
more amenable to supporting titles from independent and specialised circles (a reverse of its approach in music). The company has
demonstrated this by its recent carriage of the first ten minutes of Lars Von Trier's Manderlay via iTunes in the US in November 2005,
ahead of its 3 February 2006 release.
ISPs
Feasibility Study for a Digital Platform for the delivery of Independent UK films and Specialised films to the Home
UK Film Council © 2006
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