INSIDE MOBILE: The Looming Rich Media Wars: Apple vs. the World

There are huge shifts going on in media distribution, as the new Apple TV is allowing users to rent rich media. We're moving from a buy model to a rental model, with local ownership via downloading being replaced by remote access content rental via streaming. Here, Knowledge Center mobile and wireless analyst J. Gerry Purdy discusses this entirely new way for users to enjoy their rich media.


Apple made a ton of announcements last week, including a new iPod Nano, iPod Shuffle, iPod Touch and Apple TV, as well as new versions of iOS and iTunes. These are all interesting new products but, in my mind, the new Apple TV stands out from all the others because of its potential future impact to Apple and the entire media industry. Here's why.

Up until now, Apple has only let customers buy content from iTunes. You load iTunes on your Windows or Mac notebook, then either rip your CDs or go to iTunes Store and purchase songs, videos and shows. You then download music, audio, photos and video via the sync cable to your computer. (Newer iPhones and the iPad can access the iTunes Store wirelessly). But, in all cases, you purchased all of your content from the iTunes Store. You couldn't rent it like you do when you get a movie from places such as Blockbuster (individual rental) or Netflix (subscription or group rental).

With the new Apple TV, Apple is offering an entirely new way to obtain rich media: they are renting it to users.

Apple TV (should really be called iMedia) accesses remote content stored on a number of servers via the Internet, as well as remote content stored in the user's iTunes library. It then streams the content to the user's high-definition TV, iPad, iPod Touch or iPhone. This content is rented out on an individual basis to the viewing devices, although I suspect at some point Apple will offer packaged services via a subscription service.

Also note that there's a wall preventing other devices such as those using Google Android and RIM BlackBerry to play in this garden. Users can't (not yet, anyway) sync their iTunes library to non-Apple devices. I hope that Apple will soon remove this restriction now that iTunes has become the de facto library for music and video for many hundreds of millions of users. Allowing any device to connect with iTunes would increase sales of iTunes content.