Apple wants to extend its cloud storage to films, television
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pApple’s recent affair with cloud computing appears to be far from a dalliance: Apple has supposedly spoken to some of the major film studios about allowing iTunes users to store their purchased content on the company’s servers, according to unnamed sources speaking to a href=”http://news.cnet.com/8301-31001_3-10462562-261.html” CNET/a. The content, including TV shows and music, would be accessible from all Internet-connected devices./p
p
Since Apple doesn’t comment on anything before it’s final, we’re left to speculate on the reasoning behind such a move. Some analysts say that sales of digital movies and music may have declined between 2008 and 2009 because users are becoming wary of how much hard drive space they devote to these files. This may be a bit of a reach, but HD movies can indeed add up pretty quickly for those who haven’t gotten around to upgrading their computers or getting a beastly sized external drive.
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Before Apple can enact cloud storage, though, it will need the approval of content creators and studios to do so. Unfortunately for Apple, many media companies have been joining forces to exert some control over digital media standards. One such group is the a href=”http://arstechnica.com/media/news/2010/01/studios-flesh-out-dece-universal-video-drm-formats.ars”Digital Entertainment Content Ecosystem/a, which counts among its members Twentieth Century Fox Film, Netflix, and Sony. Nonetheless, Apple is a href=”http://arstechnica.com/apple/news/2009/08/experts-debate-apples-plans-for-huge-nc-data-center.ars”building a new data center in North Carolina/a that is speculated to be the future home of Apple’s streaming headquarters, with streaming technology provided by a href=”http://arstechnica.com/apple/news/2010/01/cloud-storage-may-be-main-focus-of-apples-lala-buyout.ars”Apple’s recent acquisition of Lala/a.
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John Gruber of a href=”http://daringfireball.net/linked/2010/03/03/apple-cloud”Daring Fireball/a speculates that the cloud storage could mean one of two things: Apple may want to provide a sort of backup or sync point for users’ media, or it wants to remove local storage for the customer entirely (thereby exercising even more control over the user’s content). Removing local storage would bring the iTunes Store model dangerously close to that of Netflix and other streaming services; at a minimum, customers would no longer be able to claim even the limited ownership they have of their media in the current format.
/p
pA backup, on the other hand, imight/i be more appealing if it’s pitched the right way. As it stands, recovery of iTunes Store-purchased media is far from difficult#8212; often a note to customer service will do the trick#8212; but being able to get whole seasons of TV shows off a cramped hard drive without this extra step to get them back indicates that a cloud-based library- or backup-type solution might actually be helpful to some users.
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pa href=”http://arstechnica.com/apple/news/2010/03/apple-wants-to-extend-its-cloud-to.ars?comments=1amp;utm_source=rssamp;utm_medium=rssamp;utm_campaign=rss#comments-bar”Read the comments on this post/a/p
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Apple stepping up pressure on music labels to snub Amazon
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pApple has allegedly been pressuring music labels to ditch Amazon MP3’s “Daily Deal” promotions, lest they be excluded from being promoted through the iTunes machine. According to anonymous executives speaking to a href=”http://www.billboard.biz/bbbiz/content_display/magazine/upfront/e3i5207f9d259b81f62d46a894f7a55e1bd”Billboard/a, Apple has always been uncomfortable with the labels double dipping with both iTunes and Amazon, but the company has ramped up its complaints lately in an attempt to retain its lead in the online music market. Though Apple still remains in the a href=”http://arstechnica.com/apple/news/2008/04/apple-passes-wal-mart-now-1-music-retailer-in-us.ars”number one spot among all music retailers/a, the move is indicative that Apple takes competition from Amazon very seriously./p
pOne unnamed music executive said that, when Amazon first launched its Daily Deal section in 2008, the labels weren’t included in the discussion and no one was given any special privileges for being there. Nowadays, however, Amazon has asked labels to give the company a one-day exclusive before street date in order to be featured in the Daily Deals. This was the turning point for iTunes, it seems#8212;iTunes reps allegedly began threatening to “[withdraw] marketing support for certain releases featured as Daily Deals” if labels continued participating./p
pSpeaking about iTunes, another major label executive told Billboard that “[t]hey are . . . diverting their energy from ‘let’s make this machine better’ to ‘let’s protect what we got.’”/p
pSome of those threats have apparently worked: labels representing Corinne Bailey Rae, Lady Antebellum, and Ke$ha have all reportedly pulled out of Daily Deals consideration in favor of staying on Apple’s good side. And, because Apple’s distaste for the Daily Deals at Amazon has become widely known in the industry, other labels have decided not to play the game at all by holding back their online offerings on the street date emand/em the day before. /p
pAmazon MP3 has been gaining popularity rather quickly since its launch in 2007, due largely to the fact that it was the first major online music store with a fully DRM-free library. In late 2008, market research firm NPD Group noted that a href=”http://arstechnica.com/apple/news/2008/04/amazon-mp3-stores-gains-not-coming-at-itunes-expense.ars”Amazon MP3’s gains were not coming at the expense of iTunes/a, though. Instead, NPD said Amazon had been building its own user base and that only 10 percent of Amazon’s customers had previously bought through iTunes. /p
pLast year, however, NPD released a new report saying that a href=”http://arstechnica.com/apple/news/2009/08/itunes-sells-25-of-all-music-in-the-us-69-of-digital.ars”Amazon had already taken the number two spot/a in online-only music sales#8212;iTunes sat at 69 percent with Amazon MP3 at eight percent. Even though the differences in market share were significant, Apple knows that Amazon is gunning for its spot and that it’s only a matter of time before the two are on more equal footing. /p
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Networks hesitant on Apple’s push for 99¢ TV episodes
Apple has supposedly been pitching networks on lower prices for TV shows, cutting the current standard from $1.99 to 99¢. If a report in the New York Times is accurate, it seems that most networks have been reluctant to consider lowering prices for two reasons: they fear the lower price will devalue the content, and doing so may give Apple more control than they would like.
Though iTunes music sales have been a success in the face of dropping CD sales and increasing P2P file sharing—Apple is already gearing up to commemorate 10 billion songs downloaded—two-dollar TV episodes have only been downloaded about 375 million times. Apple is trying to convince networks that 99¢ will make TV shows more palatable and drive increasing sales.
Apple blocks screenshots, axes sexual content from App Store (Updated)
Apple is stirring up yet another censorship brouhaha with its latest changes to App Store policy. The company recently began blocking screenshots for apps that are outside the acceptable age range in Parental Controls in iTunes. According to iPhone developer ChiliFresh, it seems that all “overtly sexual” apps might be expunged from the App Store too, which is making some users uneasy about Apple’s “power” once again.
Last month, we reported on a glitch in the App Store system that let any user browse apps and their sometimes NSFW screenshots in iTunes, even if Parental Controls indicated that the user was a small child. Shortly after the glitch was reported to Apple as a bug, developers were notified that all screenshots for the App Store had to be free of “objectionable material” and be acceptable for a 4+ rating. This, of course, was a good thing.
iBookstore won’t mean the disappearance of $9.99 e-books
Publishers happily signed on to distribute e-books for the iPad via Apple’s iBookstore, in part because it allowed more flexibility in pricing books above Amazon’s $9.99 ceiling on new and bestselling titles. Though prices are expected to be in the range of $12.99 to $14.99 for new titles in hardcover, that won’t mean titles as low as $9.99 will disappear.
According to anonymous sources speaking to the New York Times, the agreements with publishers include provisions to discount book prices on bestsellers, similar to the practice used in brick and mortar stores such as Borders. Furthermore, prices for e-book editions of titles that retail below the typical $26 price for a hardcover would be sold below $14.99 as well.
We likely won’t know more details until the iPad ships and the iBookstore is open for business, but it seems like the agreements between publishers and Apple offer something for both groups. Publishers get more flexibility in pricing, and Apple gets to offer some titles at comparably discounted prices.
Newspapers, magazines less keen on iPad than book publishers
Though book publishers were more than happy to jump on the iBookstore bandwagon in order to give them leverage against Amazon’s $9.99 e-book prices, magazine and newspaper publishers have remained cautious. Apple’s 30 percent take of sale prices and historical practice of not sharing customer data seem to be sticking points that could hold up content deals for the upcoming iPad.
Talks are still ongoing, and don’t appear to be contentious, but these two issues have risen as top concerns for content providers. Having demographic information about subscribers has been an important asset to magazines and newspapers, especially when it comes to selling advertising. “Is it a dealbreaker? It’s pretty damn close,” an executive at one US newspaper told Financial Times.
The pricing split, with 30 percent going to Apple and 70 percent going to content providers, seems to be an issue as well. “Thirty percent forever changes the economics,” one media executive told FT. “Should [subscriptions] be treated differently than single-item sales?” That’s a good question, but magazines regularly offer annual or biannual subscription prices that are 50 percent or more off the cover price.
In the face of dwindling subscriber counts—especially for newspapers—and a growing concern about how to monetize content in an increasingly online world, it seems unwise to pick nits about the revenue split. Apple’s 30 percent earns it a smallish, if non-zero, profit, and the majority of it covers Apple’s costs to maintain its servers, bandwidth, credit card processing, and some marketing.
The loss of specific subscriber information could be more damaging in the short term, but it may just mean a shift in how publications gather demographic data. Condé Nast (Ars Technica’s parent company) is already experimenting with providing iPad versions of GQ, Vanity Fair, and Wired. “We look at iTunes as a digital newsstand,” Sarah Chubb, president of Condé Nast Digital, told FT.
Apple may use iPad launch to test lower prices for TV shows
Apple will begin testing $1 TV episode pricing beginning in April, according to industry executives familiar with the plans. The launch is expected to coincide with the launch of the iPad, and may serve to prove that the change is a viable one for hesitant networks.
Apple has been trying to negotiate lower prices for TV shows for some time, with recent rumors suggesting that some networks were on board with cutting prices for individual episodes in half. Individual episodes are currently priced at $1.99 for standard definition and $2.99 for HD. So far, negotiations have centered on lowering SD episodes, which would work well on the iPad, to $1.
“If you move five times the volume [of sales] at half the price, it’s a good idea,” a source at one US media conglomerate told Financial Times. “The argument for holding the line gets bad quickly.”
Prices for individual episodes and whole seasons on iTunes have to compete with cheaper prices from the likes of Amazon On Demand. Also, physical DVDs for full seasons are often priced similarly to iTunes, offering little incentive to pay for DRM-restricted digital files. And many TV shows are now available for streaming via free services like Hulu or subscription services like Netflix.
One media executive said that the 120 million active customers on iTunes offered an excellent opportunity for experimentation to find the right pricing model. With the media industry as a whole in a transition to on-demand, online availability, now is “a good time to do it,” he told FT.
Meanwhile, Apple is not yet tossing aside a plan to also offer a subscription service for TV shows. Apple has proposed a $30 per month plan to allow unlimited TV watching, but so far Disney and CBS are the only networks that have expressed an interest. Many companies fear that agreeing to the plan could damage relationships with cable operators such as Comcast, which still bring in large amounts of revenue.
Variable download pricing correlated with slower music sales
It has been about a year since the music labels got what they had been asking for from the major online music stores: tiered music pricing. Problem is, that system may not be working out as well as the labels had hoped—Warner Music Group has reported slowed digital music growth since the pricing changes, and even though the company tried to spin the news as positive, it acknowledged that the timing may not have been the best.
Warner’s digital sales (and by “digital,” it means online sales, not CDs) made up 20 percent of its total revenue in its quarter ending on December 31, 2009—flat sequentially from the previous quarter. Unit growth in “digital track equivalent albums” saw a five percent growth rate during the December quarter, though it’s down from 10 percent in the September quarter and 11 percent earlier in the year. Digital revenues were up eight percent year over year, compared to 20 percent the year prior.
Publishers continue pummeling Amazon over e-book prices
Amazon’s $9.99 e-book price point may be a rarity as more book publishers declare that they’ll set their own prices for books, with the seller taking a standard 30 percent cut. Another major publisher has decided to move to what’s referred to as the “agency model” while others are hinting that they, too, are about to force the new model on Amazon.
Hachette has become the latest publisher to announce that it was done with what it calls the artificially depressed e-book prices imposed by Amazon. In an e-mail to its employees, CEO David Young extolled the virtues of the agency model, noting that it “allows Hachette to make pricing decisions that are rational and reflect the value of our authors’ works,” according to an excerpt posted by Media Bistro. “Without this investment in our authors, the diversity of books available to consumers will contract, as will the diversity of retailers, and our literary culture will suffer.”
Poll Technica: do you want Flash on the iPad?
Reactions around the Web to the lack of Flash support on the iPad are extremely polarized. The most common complaint is that Flash is necessary for a larger percentage of the Web to work properly. Popular video sites like Hulu, FunnyOrDie, and others are effectively shut out of the iPad browsing experience. This also includes many casual games, a majority of which are written and deployed online using Adobe Flash.
Of course, Apple has its own reasons for excluding Flash from the iPhone OS (which also runs on the iPad). Apple also offers its own alternatives—for which you’ll have to pay—but those aren’t always up to par with the unbridled selection you find online.
We’d like to know your position on the absence of Flash on the iPad. We realize that this is a random sampling and not authoritative, but we’re still interested in what you guys think about this issue. Our readers skew highly to the educated, high-income, IT, and otherwise professional market segment, and we know that many of you like to tinker with your gadgets or are software developers.
