It's official - Apple says it will be offering individual TV episodes for download 'rental.' While many are already heralding the announcement from yet another much-hyped media event in California as another nail in the coffin of old school television, Daniweb spoke to Dan Rayburn , a principal analyst at Frost and Sullivan who also runs streamingmedia.com . He told us that despite all the hype, he doesn't see today's announcement as any sort of breakthrough.
"You hear things like 'Cable is Dead' or 'People are cutting the cord for online video,' or 'The TV Model is broken...' but when you look at the actual numbers, it's just not accurate."
Rayburn points to figures that put the online video advertising market at half a billion dollars, versus 60 billion for TV advertising.
Another challenge for the streaming media sector that is preventing the total demise of the television industry for the time-being is the issue of fragmentation. Unlike with traditional television, where a variety of services and content are all distributed through the same big living room flat screen, online video is offered through myriad different devices, platforms, operating systems and with widely varying levels of quality.
As Apple's announcement comes today, rumors are swirling that Amazon may offer video on demand, and Google is also planning a Google TV platform. Blockbuster, Best Buy, Hulu Plus and Netflix further crowd the market.
Rayburn says no one stands to be able to solve the fragmentation problem to move into a dominant leadership position, except perhaps, one company...
"Apple, I think, could solve that if they licensed iTunes for third-party devices, but you know how much of a control freak Apple is - they wanna control the device, the platform and the content, which is unfortunate."
When Apple first announced Apple TV a few years back, the new box didn't sell well. In fact, it never did. Rayburn says whether it's a new device or a new service, there's no guarantee consumers will adopt it just because it has the Apple logo stamped on the back. He says all the big revolutions in media and today's successful players didn't arrive overnight.
"If you look at Netflix when it first started doing streaming 3-4 years ago, the quality of the stream today is much better. And that's simply because the bitrate and the encoding got better, but the technology that Netflix was using three years ago for streaming is pretty much the same technology that they're using today."
Looking into the future, he says it's still uncertain where people will be getting most of their online video from in a year.
"Blockbuster doesn't even support Mac users.... Hulu Plus, they're gonna be around, they were profitable at the end of last year. Netflix we certainly know how well they're doing. Apple could be seen at this point, iTunes is certainly the most popular platform around, but Apple hasn't had much penetration with any type of device for connecting to the TV."
Rayburn says in the end, all that matters is what consumers are willing to pay for:
"...what they're willing to buy and what they adopt. The business side is far more important than the technology side - this technology's been around 15 years."