– Dominates OTT Purchase/Rent Sector
The really big news in Apple’s announcement last week that it is adding HBO GO and WatchESPN to Apple TV is more than what it seems. The significance of this announcement is the fact that consumers are spending upwards of $3 million to $4 million a day to buy and rent movies and TV shows from Apple, which does not include what Netflix and Hulu take in as a result of being on the Apple TV.
The little $99 smart TV adapter has turned into a very big money spinner for Apple and the studios. Apple said over one billion TV episodes and 380 million movies had been bought from iTunes. The run rate is increasing. Consumers are currently buying more than 800,000 TV episodes and 350,000 movies a day.
NPD Group recently reported these market share numbers for 2012:
Walmart must be very disappointed that its Vudu movie and TV purchase and rental OTT service, despite having UltraViolet, is not ranked at or near the top.
The Financial Times calculated that Apple is taking in between $3 million and $4 million a day. The studios get a sizeable cut of that. Apple charges between 99 cents and $20 for movies and $3 per HD TV episode.
Apple says it has sold more than 13 million Apple TV units globally since it was launched in March 2007. The number being sold is accelerating with 2 million being sold in 2012’s holiday-shopping quarter.
Apple TVs are worth the $99 price just to be able to play on a user’s stereo/surround sound system the music and other audio that a user keeps in iTunes on a PC. Apple also offers a large library of paid and free non-music audios such as thousands of free university lectures, some of which are also in video. The fact that you can also buy and rent movies and TV shows to watch on the living room TV is a bonus. (I, a single but frugal man and not at all an Apple fanatic, have three: one for the living room TV/surround sound, another for the bedroom and a third for the whole-home stereo/speaker system and for which a small TV was purchased to operate it.)
The end result is that Apple has become a major distributor of video content — just as if it were a large chain of theaters. It also shows how big OTT services have become for selling and renting movies and TV shows. Millions (soon to be billions) of consumers have become accustomed to using OTT services to it to succeed.
But it needs to better define why users want to buy a Windows tablet. It needs to stay true to its vision of one OS (not a complete OS and a badly disabled one). And it needs to work with partners to make the vision real. Intel now has chips that are competitive on battery life and performance. And at price points that are finally aggressively priced against …
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