iTunes-like video services have no future: study

Online video sites that sell shows and movies such as Apple Inc.'s iTunes will likely peak this year as more programming is made available on free outlets supported by advertising, according to a study released on Monday.

Sales of movies and television shows are expected to almost triple to $279 million in 2007 from an estimated $98 million last year. But unless the average consumer begins paying for their online video en masse, growth in sales will likely peter out next year, according to Forrester Research.

"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a "dead end."

Forrester estimated that sales growth is not likely to triple or even double in 2008 and beyond, after early adopters and media addicts have already started using the services.

View: Yahoo! News

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15 Comments

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As many people have mentioned current pricing is absurb, as well as the quality. As soon as it's affordable, and dvd/high def quality, then alot more people will buy them.

I dun think this has any truth to it, under their logic music sales would be trash because of the radio. People want to OWN their movies/shows/music. And more importantly I think they want it without advertising. I don't think the iTunes Video Store will be going away.

Didn't the ad-supported free internet services (like Netzero) kind of prove a few years ago that the ad-supported model just doesn't work in the online environment?

Except that the ad-supported free netzero survived for years until broadband became widely available (dsl, isdn, cable). That's when they started going to the low price dial up and slightly higher priced 3g dialup.

Unfortunately they never seem to have wanted to branch out into the broadband world. They could if they want to rent the lines like earthlink does.

I have no reason to pay for downloaded video. Its worthless unless I can burn them easily to DVD so I watch them on my TV!

I'll stick to buying DVD and get lots of extras, thank you.

Angel Blue01 said,
I have no reason to pay for downloaded video. Its worthless unless I can burn them easily to DVD so I watch them on my TV!

Isn't that one of the reasons that Apple TV exists?

Galley said,

Isn't that one of the reasons that Apple TV exists?


Yes but the quality is crap, 640x480 for tv shows and movies?

Wheres the Hi Def?
Wheres the Widescreen?

Sheppard said,

Yes but the quality is crap, 640x480 for tv shows and movies?

Wheres the Hi Def?
Wheres the Widescreen?


They have widescreen already. The only thing they're lacking is the high definition, which probably isn't that far off. I think what's holding them back is a distribution model that won't make the ISPs want to kill Apple.

The only difference is that we have Hi-def content already here, and abotu to take off. The quality of the stuff on iTunes isn't even DVD. 640x480? Phft. DVDs are 720x480.

iTunes won't be able to offer HD for years. The bandwidth simply isn't there.

I would personally prefer them, if only it was higher quality, higher resolution and more affordable. There's no logical reason to pay more for digital movies when you can get the same thing on DVD - at a higher quality, higher resolution and extras (special features, ect.) - for sometimes half the price. I'd be perfectly happy to pay ~A$10 for a digital movie (that was higher quality/resolution than current offerings) and sacrifice things like special features, which I never bother with anyway.

More than anything, I'd like a digital rent service from iTunes - $5 for a movie for 24hrs, and a discounted price if I choose to buy that movie afterwards. I doubt we'll see anything like that from Apple anytime soon though.

I don't think so. For example, I would gladly support sci-fi Stargate creators by paying thru "Amazon Unbox Video" directly. In this case 20 episodes would cost me just ~£20. Unfortunately I live in UK and same amount of episodes cost here from £45 to £60 (why some f*****g "middle man" must get lion stake from authors and me?). I think this is one of the reasons why UK doesn't have "Unbox" - because shops will loose ability to rip off UK people. So I just use torrents to get episodes for free. Of course creators are loosing millions of dollars, but hey! I've tried to pay and USA refused to take my money. Please open internet video shop with same prices in UK and I will pay gladly.

There isn't any advantage to unboxed over the stargate dvds here. Unboxed is $2/episode, and I can get the box set for the entire season for $40 on amazon.