Analysis: From e-media to i-media -- how Apple will dominate all digital media sales...
It looks as if Apple iPad has no support for Adobe Flash video or Microsoft Silverlight, just as on the iPhone. That means no streaming video from Hulu, Netflix Direct, BBC iPlayer, etc.
But it is tightly coupled to the iTunes store, which now also has iBooks. And Apple has chosen a proprietary hardware and software design. This means that apps and content optimized to perform well on the iPad can't be pirated onto other platforms, it's an extra layer of digital rights management.
Apple has created a funnel through which media and app creators can deliver their content to customers. But they all have to have Apple approval and pay an Apple share of the revenues.
The benefit to customers are:
- Cheaper devices subsidized by media sales - A very good customer experience because the media and platform are co-optimized for each other. - Easy access and purchase of media through WiFi to iTunes or 3G (AT&T data plans.)
Media creators will tryo make sure that there is no dominant supplier of digital media. For example, Amazon has been trying to become the funnel for e-books but other e-readers are gaining ground.
How the fanboys will help Apple dominate...
Apple has a tiny share of the overall computer and phone market, but its customers form a large share of the early adopter market. This is a well-heeled group with lots of money to spend on media -- more than any other comparable demographic.
From the early adopters comes the development of mass markets. The iPhone went from an elitist toy to a mass market phone in less than 2 years, in many countries -- a trend that will get larger after exclusive carrier contracts expire. It's also a lot cheaper, from $599 to $199 in the US.
From e-media to i-media...
Apple is making a bold bid to tie up a dominant share of the future media e-commerce market — the sale of digital books, movies, newspapers, etc.
Advantages for medai creators:
- Its proprietary hardware and software strengthen its DRM; media creators want strong DRM, which will attract them to Apple.
- Its tightly controlled hardware platform is optimized to provide the best customer experience for text, video, music, etc.
- It's iTunes store allows doe easy distribution of media.
- It has a built-in e-commerce system for collecting money from customers.
Through its proprietary systems, Apple can provide a high quality experience to users, and provide media and apps creators with a highly efficient commerce platform.
This is how Apple will dominate the sales of all future forms of digital media.