Gene Detroyer

Amazon and Apple Adding Video Options, Maybe

September 1, 2010

FROM RETAILWIRE:
In the lead-up to Apple's annual event today, speculation is growing that the company will announce a deal with Netflix to stream movies to consumers through its new and cheaper version of the Apple TV set-top box. Where do you see the video download business heading?      [more...]

The biggest implications here are neither for the video download business nor for the type of hardware that people use. The big implication is what happens to commercial TV as we know it.

Consider situation #1--In my house we watch no commercials (except on sports and news). We DVR every show we want to watch and speed through the commercials when we view it. Even if we are available at the time the show is on in real time, we will view something else and give the DVR a head start so we can skip the commercials in the real time show.

Consider situation #2--Cable providers make many shows available On-Demand at no cost. And these are some of the better shows on. A better alternative to watching the same show with 20% commercials.

Consider situation #3--I pay Netflix $10 a month for unlimited downloads of movies. The TV shows I can download are essentially free to me.

So who stands to benefit? Here is the winner. The company that can give me access to real-time events (news and sports) for $40 or $50 a month and let me buy whatever shows I want for $0.99. At that rate I couldn't possibly spend what I currently spend on cable per month. Who can do this? Apple? Google? Amazon? The cable guys? Any or all. What is apparent is that the Soap is going out of Soap Operas.