Fertile grounds for video players
Lest few weeks were rather fertile when it comes to announcements of portable video players and related services. Apple announced video-capable iPod with capability to download TV shows (only ABC for now) 24 hours after they air. Dish Network announced PocketDish player series which allows Dish Network (DN) customers to download and view any TV programming stored on their DN DVRs.
At first glance DN presents a first formidable attack to iPod fortress. DN owns programming relationship, and apparently they
have achieved the holy grail of mobile content by ironing agreements with content originators to distribute
programming, and at much wider scale and lower marginal cost than ITMS can. Sure, you have to pay for DN subscription, but hey you are doing that anyway if you are considering this device. Which brings me to the second advantage Dish Network has. They own the customer. If you’ve got the dish, they’ve got your address, and they can easily target their marketing to you thus getting higher marketing ROI. In addition, if you are in the market for this type of device,
and already DN customer then you are more likely to stay w/ Dish, and they can reduce their
overall costs from customer churn. Finally, if you are interested in this particular device, then you might be interested in signing up with DN, thus their customer acquisition costs may go down somewhat.
However, DN still has a fairly small install base (compared to iPod user base) which in turn means that devices penetration and thus economies of scale will be limited, and therefore device price will likely remain high. In this I assume that device as is will not be interesting to non-users of DN services. This is consistent with adoption of other mobile media players so far. Thus, adoption will likely be both slower and limited to a subset of DN’s install base and will not likely represent a significant competitive threat to Apple’s offering. Moreover, popularity of iPod stems from superb integration with computer and service,
streamlined UI and multitude of price points - some being more accessible than
the others, but offering more or less everybody a taste of technology leadership. Given features, I don’t see PocketDish being anywhere close to iPod prices, and it certainly does not look easy to use.
Be it as it may, this development offers some possible insight into what’s to come from Apple side. Should an universally DVR reusable device emerge, i.e. one that would work with TiVos, Dish Network’s DVRs, Time Warner’s DVRs, etc. we’d have a real competitor. Or perhaps Apple’s on the way there. Wide speculation is that MacMini is actually a DVR in disguise, and it even may offer iPod docking capabilities in one of next revs. Also, we’ve seen some of DVR-ish features coming along with new Front Row application.
One thing is certain: Apple, even in current state of iPod world domination can afford to stand still. Digital revolution is only starting.