January 23, 2006

An online video gold rush?

In Fall 2005 Apple released their video iPod to rave reviews and immediately began selling videos on their Apple iTunes web site for $1.99 per file. These files include music videos and individual episodes of popular television shows such as LOST, Desperate Housewives, Alfred Hitchcock presents, etc. Previously consumers were forced to buy TV shows packaged in bundles as determined by the networks (five episodes on a DVD, or Star Trek Next Generation - Season 2, etc). The ability to buy unbundled individual episodes at $1.99 presented a tremendous value added service to consumers. However, this was quickly taken a step further when iTunes and the networks realized they could unbundle further and began selling individual segments of easily decoupled shows such as Saturday Night Live and Conan O'Brien. Videos that are easily decoupled into independent segments such as talk shows, comedy shows, and music programs offer strong incentives for the provision of individual segments of the shows. The value added to consumers is evident to other market players prompting Google to enter the "video gold rush" as described in the Jan 6th CNN.com story "Google announces video expansion". Stay tuned for the next episode (or portion thereof) of this video distribution evolution.

Posted by at January 23, 2006 9:16 AM