YouTube vs iTunes

More speculation and conditionals. Watch how frequently this meme will be transcribed in today and tomorrows papers and newsmagazines.

Guardian Unlimited Business | | YouTube video policy takes on iTunes
YouTube's plan to provide “every” music video free is a “nail in the coffin” of the paid-for online content business model and potentially threatens the dominant position of Apple's iTunes, according to City analysts.The video filesharing website, where 100m clips are watched every day, is in talks with Warner Music and EMI to offer music video downloads for free. Revenue will be provided by advertising.

Apple has been the dominant driver in online music downloads because of its deals with record labels and the ease of use of the iPod and iTunes online store.

However, Apple uses proprietary technology that only allows its songs and videos to be played on its iPod devices, potentially limiting its long-term revenue potential.

This assertion is not true. We purchase compact discs, convert them to MP3 format, and play those on our iPods. We also download MP3 freebies from various web sources (Salon, Amazon, eMusic, et al), these also play on our iPods without issue. None of these MP3 files are from Apple's iTunes store.

I suppose the sticking point is whether music videos are compelling enough content to pay for. For us, most certainly not. We don't own a video capable iPod, and are not that into music videos as an art form in any case. It is fairly trivial to convert YouTube content into .mov content, which can be watched in any QuickTime compatible device, including iTunes (and thus an iPod). However, what's the point? I don't know if Apple breaks out the number of music videos downloaded and paid for, but I suspect whatever number is a small fraction of the overall iTunes store sales.

That said, I certainly would watch a few videos if they were free, and bloggable, and YouTube should do well allowing higher resolution videos to populate its database.

According to Mark Mulligan, vice-president at JupiterResearch, YouTube's popularity means it could have the scale to create a free video-based music competitor to the paid-for downloads offered by iTunes.

“Any service that YouTube puts in place is, almost beyond reasonable doubt, not going to be iPod compatible,” said Mr Mulligan.

YouTube files are supposed to be only streamed, but circumventing this is fairly simple.
It takes about 25 seconds of user time, and several moments of computer time (depending upon the speed of the computer doing the calculating) to convert a flash file from YouTube into a QuickTime movie, including using the H.264 codec.

I don't know if Mark Mulligan is just not tech savy, or if the article was slanted prior to publication.

If they develop portability - and that should definitely be on the table - then Apple could be in the unusual space of playing catch up,” he added.

If YouTube can convert its massive online popularity then it could provide a significant reason for people to buy non-iPod devices, at the moment Apple is still the best bet for portable music watching.

”Either way it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives.

Lots of 'ifs' and 'coulds' here.

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This page contains a single entry by Seth A. published on August 17, 2006 4:34 PM.

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