With the launch of Intel's Viiv entertainment platform, Apple is facing a large and well organized competitor in the market for digital media and entertainment. In the coming months this is set to spark a battle over digital media standards, industry analysts predict.
The launch of Intel Viiv will finally "get premium digital video content flowing," Nathan Brookwood, an analyst with Insight 64 told vnunet.com. The platform, he argued, at last is meeting the demands of movie and television producing companies. Where they would hold their content "hostage" in the past, they are now willing to create ways for consumers to access it over the internet.
But to consumers the video download market is highly confusing. Shows are locked in by competing standards of digital rights management technologies. Archived episodes of Star Trek and Crime Scene Investigation require the Google video player and can watch the show only on a computer screen. Consumers looking to download Desperate housewives need to install Apple's iTunes player and can watch it only computer or a video iPod. Fans of older television shows such as Babylon 5 or La Femme Nikita are forced to purchase an Intel Viiv system.
At the core of this battle are different digital rights management technologies. Intel's Viiv platform is build around Microsoft's Windows Media format, where Apple uses Fairplay. Google at the Consumer Electronics Show introduced yet another digital rights management technology that will be used in its video download store. And Real Networks DRM shouldn't be ignored either.
While most of the DRM technologies have been around for years, the battle between them will only further intensify, predicted Michael McGuire, a research vice president with analyst firm Gartner.
"This is the year that it does get painful for both consumers and the industry," McGuire told vnunet.com. "It's going to get a lot worse before it gets better. A lot of people are holding their breath and are seeing what happens. They will close their eyes and let [the market] do its work."
Intel launched Viiv early January at the Consumer Electronics Show in Las Vegas. The brand aims to create a standard way for consumers to acquire and distribute digital media across devices. Together with the launch of the hardware platform, Intel also unveiled several content partnerships, giving consumers access to video and audio material on their televisions through the internet.
A Viiv device runs Microsoft's Windows XP Media Centre Edition and has to meet several hardware criteria, such as the inclusion of a surround sound system and a high end Intel processor. Systems will cost at least $900, the Intel has said.
Apple in the past years has build up a commanding lead in the music download market. But the company only last October opened its iTunes store for video purchases.
Although the Viiv hardware can't really be compared with Apple's line-up of media products that is centred around the iPod, both platforms compete head to head in the digital download market.
Intel is actually ahead of Apple when it comes to scope and diversity of its video portfolio. Viiv users have access to music videos, 14,000 television shows and 100,000 full length movies. Apple's iTunes store offers a far more limited selection of music videos, television shows and short movies and doesn't offer full feature movie downloads.
"Viiv will have a volume advantage. It will be the platform for all key video content," said Brookwood.
But Gartner's McGuire counters that Apple has a strong position with the iPod: "Right now iTunes and iPod have set the bar [in ease of use]. That experience is going to be what those alternatives have got to create."
The Viiv platform will also have to creating a bundle with the appropriate hardware, software and user experience that will have to come from a large collection of suppliers.
"You have to separate the fact that Microsoft and Intel represent a large, complex ecosystem and that Apple has its own ecosystem," McGuire said.
"The days are gone where companies put products out under a name and let the people pick. They've got to be packaged in a way that consumers immediately understand what to do and that they won't be intimidated."
Ultimately DRM standards will be forced to merge, or one will simply fade away, predicted Brookwood. He predicted that it will take between 12 and 18 months for the battle to rage.
Other than a long history of mudslinging, there is little that prevents Apple from adopting Windows Media DRM. But it's a move that the company will put off as long as it possibly can because it will then loose it tight grip on the music download market.
But nobody is willing to rule out the opposite from happening either. If iTunes continues its march up the video download market, Intel could at some point feel compelled to abandon Windows Media in favour of Fairplay.
But one thing is sure, argued Brookwood: "One party will have to throw in the towel. When a lack of content that leaves a person on Apple out, that's going to impede market acceptance." The world simply isn't big enough for two competing DRM standards.
Apple is already showing signs that it is trying to evade a direct confrontation in the digital media market. At MacWorld in San Francisco this week, the company didn't unveil special version of the Mac mini turned into a media adapter, as some observers had expected. Such a device was said to essentially do the same as a Viiv PC by letting users record and play back television shows to the devices hard drive. It could also have allowed consumers to play the video purchased in the iTunes store on a television.
Instead Apple CEO Steve Jobs spent most of his keynote at the tradeshow talking about his iLife suite. The applications offer easy to use tools that allow consumers to create and manage their digital media such as photos, music, podcasts or blogs, to name a few.
By moving to the creativity side of the digital media spectrum, Apple is leaving it up to Viiv to create a product that is focused on consumption, McGuire pointed out.
"The iPod is about consumption and so is iTunes. But [Apple] also created an ecosystem that takes it beyond consumption by allowing consumers to create things like blogs and podcasts."
The launch of Intel Viiv will finally "get premium digital video content flowing," Nathan Brookwood, an analyst with Insight 64 told vnunet.com. The platform, he argued, at last is meeting the demands of movie and television producing companies. Where they would hold their content "hostage" in the past, they are now willing to create ways for consumers to access it over the internet.
But to consumers the video download market is highly confusing. Shows are locked in by competing standards of digital rights management technologies. Archived episodes of Star Trek and Crime Scene Investigation require the Google video player and can watch the show only on a computer screen. Consumers looking to download Desperate housewives need to install Apple's iTunes player and can watch it only computer or a video iPod. Fans of older television shows such as Babylon 5 or La Femme Nikita are forced to purchase an Intel Viiv system.
At the core of this battle are different digital rights management technologies. Intel's Viiv platform is build around Microsoft's Windows Media format, where Apple uses Fairplay. Google at the Consumer Electronics Show introduced yet another digital rights management technology that will be used in its video download store. And Real Networks DRM shouldn't be ignored either.
While most of the DRM technologies have been around for years, the battle between them will only further intensify, predicted Michael McGuire, a research vice president with analyst firm Gartner.
"This is the year that it does get painful for both consumers and the industry," McGuire told vnunet.com. "It's going to get a lot worse before it gets better. A lot of people are holding their breath and are seeing what happens. They will close their eyes and let [the market] do its work."
Intel launched Viiv early January at the Consumer Electronics Show in Las Vegas. The brand aims to create a standard way for consumers to acquire and distribute digital media across devices. Together with the launch of the hardware platform, Intel also unveiled several content partnerships, giving consumers access to video and audio material on their televisions through the internet.
A Viiv device runs Microsoft's Windows XP Media Centre Edition and has to meet several hardware criteria, such as the inclusion of a surround sound system and a high end Intel processor. Systems will cost at least $900, the Intel has said.
Apple in the past years has build up a commanding lead in the music download market. But the company only last October opened its iTunes store for video purchases.
Although the Viiv hardware can't really be compared with Apple's line-up of media products that is centred around the iPod, both platforms compete head to head in the digital download market.
Intel is actually ahead of Apple when it comes to scope and diversity of its video portfolio. Viiv users have access to music videos, 14,000 television shows and 100,000 full length movies. Apple's iTunes store offers a far more limited selection of music videos, television shows and short movies and doesn't offer full feature movie downloads.
"Viiv will have a volume advantage. It will be the platform for all key video content," said Brookwood.
But Gartner's McGuire counters that Apple has a strong position with the iPod: "Right now iTunes and iPod have set the bar [in ease of use]. That experience is going to be what those alternatives have got to create."
The Viiv platform will also have to creating a bundle with the appropriate hardware, software and user experience that will have to come from a large collection of suppliers.
"You have to separate the fact that Microsoft and Intel represent a large, complex ecosystem and that Apple has its own ecosystem," McGuire said.
"The days are gone where companies put products out under a name and let the people pick. They've got to be packaged in a way that consumers immediately understand what to do and that they won't be intimidated."
Ultimately DRM standards will be forced to merge, or one will simply fade away, predicted Brookwood. He predicted that it will take between 12 and 18 months for the battle to rage.
Other than a long history of mudslinging, there is little that prevents Apple from adopting Windows Media DRM. But it's a move that the company will put off as long as it possibly can because it will then loose it tight grip on the music download market.
But nobody is willing to rule out the opposite from happening either. If iTunes continues its march up the video download market, Intel could at some point feel compelled to abandon Windows Media in favour of Fairplay.
But one thing is sure, argued Brookwood: "One party will have to throw in the towel. When a lack of content that leaves a person on Apple out, that's going to impede market acceptance." The world simply isn't big enough for two competing DRM standards.
Apple is already showing signs that it is trying to evade a direct confrontation in the digital media market. At MacWorld in San Francisco this week, the company didn't unveil special version of the Mac mini turned into a media adapter, as some observers had expected. Such a device was said to essentially do the same as a Viiv PC by letting users record and play back television shows to the devices hard drive. It could also have allowed consumers to play the video purchased in the iTunes store on a television.
Instead Apple CEO Steve Jobs spent most of his keynote at the tradeshow talking about his iLife suite. The applications offer easy to use tools that allow consumers to create and manage their digital media such as photos, music, podcasts or blogs, to name a few.
By moving to the creativity side of the digital media spectrum, Apple is leaving it up to Viiv to create a product that is focused on consumption, McGuire pointed out.
"The iPod is about consumption and so is iTunes. But [Apple] also created an ecosystem that takes it beyond consumption by allowing consumers to create things like blogs and podcasts."