OTT Wars: Apple, Amazon and Google
Posted by Jesse Ward on Tuesday, September 7, 2010 · 
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Apple's new video device and service
The video device market is heating up as new entrants battle it out for the consumer’s attention and a share of the $180 billion global TV advertising market.
Last week Apple unveiled a new generation of Apple TV, an Internet-connected set-top box which will stream content from Apple’s iTunes store, eliminating the need for storage or syncing. The new Apple TV is a small black box that features an HDMI port capable of 720p output, OpticalAudio and Ethernet.
Apple will offer first-run HD movie rentals for $4.99 and HD library titles for $3.99. Apple also offers standard definition movies for $3.99 for new releases and $2.99 for library titles. Rentals be watched within 30 days; once you begin watching a movie, you need to finish it within 24 hours.
Perhaps most importantly, Apple has negotiated for streaming TV rentals from News Corp.’s Fox, The Walt Disney Co.’s ABC, ABC Family and Disney Channel, and BBC America. HDTV rentals will cost 99 cents per show and be available for 48 hours after purchase.
The box also will come with access to Netflix’s streaming-video service, as well as YouTube and Flickr content.
Apple also introduced a new feature called AirPlay, slated for release in November, which will allow users to seamlessly switch devices without losing their place in a video, and to stream music wirelessly to multiple outputs simultaneously.
The new Apple TV will retail for $99 and be available for purchase in about four weeks.
In related news, hours after Apple showcased its new Apple TV device and streaming service, Amazon cut its price on a similar set of TV shows to 99 cents from $2.99. Unlike Apple which rents the videos, Amazon lets its customers buy the shows, which can be downloaded or streamed. The company currently has a catalog of 75,000 movies and TV shows. Amazon has also been rumored to have a new subscription TV and movie service waiting in the wings.
Not to be outdone, Google CEO Eric Schmidt announced last week that its much anticipated GoogleTV service will launch this fall in the United States and worldwide next year. Google is taking a different approach to its device which will integrate the user’s Pay-TV video service with DVR recordings and the Internet. Google has yet to release how much the device will cost, but the service will be free.
“We will work with content providers, but it is very unlikely that we will get into actual content production,” Schmidt told journalists after a keynote speech to the IFA consumer electronics trade fair in Berlin.
Although many of these devices may not appeal to the masses, or cause widespread Pay-TV cord cutting, it’s important for video service providers to closely monitor developments in over-the-top (OTT) content.
When introducing his company’s new device, Apple CEO Steve Jobs now famously referred to it as Apple’s “hobby,” perhaps an attempt to keep expectations low. Although Apple’s release is not revolutionary, it’s another sign that the video marketplace is evolving. Hollywood studios are, not surprisingly, reluctant to work with set-top manufacturers, but they are testing the waters with companies like Apple that have proven track records in this new digital media marketplace.
For more, attend TelcoTV 2010 which will feature an entire track devoted to Content Strategies including the session “OTT content, friend, foe or both?”.
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