Analysis: iPad Is an iDRM Storefront For Apple Ambitions To Dominate All Digital Media Sales
By Tom Foremski - January 27, 2010
Foremski's Take: My first impression of Apple iPad is that its low price of $499 is due to the fact that it's basically a storefront for Apple's iTunes and iBooks online store.
It looks like there is no Adobe Flash video support, or Microsoft Silverlight video support, which means no Hulu, no BBC iPlayer, no Netflix Direct. You won't be able to stream video from anyone but Apple.
Belt-and braces DRM...
By using the iPhone OS and its own proprietary hardware, Apple has managed to build a solid belt-and-braces digital rights management (DRM) system, that is the platform itself.
Applications and media designed to run well on the iPad will be optimized to run on the Apple iPhone OS and also, on its proprietary hardware, the A4 microprocessor.
This provides an extra level of DRM support making it more difficult to pirate apps and media onto other platforms.
Buy all media through the Apple funnel...
Apple says iPad "comes with iTunes and iBook" stores. Apple is setting itself up as the funnel for all other media.
Media creators, after Apple approval, will be able to sell their content: tunes, movies, TV shows, books, podcasts, newspapers, apps, etc through its online store, delivered to Apple devices such as iPad, iPhone, optimized to run the media at its best.
Apple takes a cut of the revenue...
By building a proprietary, closed platform, with its own hardware and software, Apple is able to capture a larger part of the value stream from selling media.
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.)
Issue for media publishers...
The issue for creators is that Apple is the only way to get media and apps onto the iPad and iPhone. You have to go through Apple.
Will they try to weaken Apple's position by making their media available on other platforms? Yes. But Apple knows the customers will decide and it has a very strategic customer base of early adopters.
Fanboys...
Although Apple has a tiny share of the overall computer and phone market, 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.
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.
Its proprietary hardware and software strengthen its DRM; media creators want strong DRM, which will attract them to Apple. And it's iTunes store distributes the media for them and collects payment.
In this way, through its closed and tightly controlled 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.
- - -
UPDATE: Nicholas Carr seems to agree. He has written "Hello iPad, Goodbye PC"
Towards the end of his article, he writes:
"Today, Jobs's ambitions are grander than ever. His overriding goal is to establish his company as the major conduit, and toll collector, between the media cloud and the networked computer.
Jobs doesn't just want to produce glamorous gizmos. He wants to be the impresario of all media."
Please see:
The Mysterious Apple A4 Chip - Where's MSFT's and GOOG's Chip?
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Comments (16)
Nice analysis, Tom. Really laid things out clearly.
What do you think of the EPub standard? Do you think publishers respect it? Do their content management systems play well with it? That's my homework for next month. :-)
Posted: January 27, 2010 6:26 PM
Excellent analysis, Tom goes along the one by Nicholas Carr, in my view this all Apple concept drm usable and all in one will build a new consumption of media and in the end people will seamlessly accept paywalls.
Posted: January 28, 2010 4:08 AM
Thanks Sam and Carlo. As for EPub, I haven't been paying much attention to it. I think publishers will respect it if it offers them additional ways to make money.
Posted: January 28, 2010 8:27 AM
" You can stream video in any iPhone app currently with the video APIs. No reason you can't do that on the iPad. Hulu and Netflix could certainly release apps to do just that.
Posted: January 31, 2010 5:12 PM
BBC iPlayer works fine on Mobile Safari without Flash support (I'm guessing Hulu, Netflix and others aren't far behind - not to mention YouTube or Vimeo, which are already there)
There must be a big, open discussion about Apple's policies, but proper research would do the debate some good.
Posted: January 31, 2010 5:51 PM
Yes, some sites can stream video but its not Flash because Apple does not support Flash or Silverlight. And it costs those sites a lot more because they have to set up an additional infrastructure to support Apple devices. On the desktop/laptop Apple's Safari and Firefox do support Flash and Silverlight. But not on iPhone, iTouch or iPad and there is a clear reason for that, because of Apple's commercial ambitions.
Posted: January 31, 2010 5:55 PM
" they have to set up an additional infrastructure to support Apple devices"
At the moment, yes. However, this is an infrastructure that is set to become a standard, it's open (not proprietary, like Flash), more stable than Flash and lighter on resources (RAM).
Mobile Firefox has also just dropped Firefox, for technical reasons: it's buggy and a memory hog.
I see a lot of potential problems with Apple's decisions, but streaming video will actually benefit from manufacturers dropping Flash support, in many ways.
Posted: January 31, 2010 6:08 PM
Ultimately, its the consumer that has to pay, because of the higher costs by vendors in having to install media servers for each video technology, open or otherwise.
Posted: January 31, 2010 6:50 PM
Well, switching from one technology to another, superior one costs money, I guess. Native video and audio in HTML 5 is a stable, easy, plugin-free way to serve those kinds of media, and if Apple accelerates the adoption of that open standard, I applaud them for it.
It will take some time for all browsers to support the format, but I'd personally be happy to help carry that transition by paying a bit more for, say, my TV license - just an example, as the iPlayer is the only service I use of the ones you mention.
Is Apple dropping Flash support because HTML 5 is just around the corner, or are they primarily trying to drive developers towards producing for the App Store and we're just lucky that a better way of serving video is arriving just in time? I don't know - but you chose to open your article with the point about streaming video:
"You won't be able to stream video from anyone but Apple."
This is simply not the case.
Posted: January 31, 2010 8:09 PM
Michael: You are right, you can stream video from non-Apple sources provided you use the Apple method. And, in the near future, if HTML5 succeeds as a standard, there will be more such sources.
Posted: January 31, 2010 8:19 PM
No, you can stream video from non-Apple sources - full stop.
Mobile Safari already supports HTML5 video, which is not an "Apple method".
Posted: January 31, 2010 8:48 PM
Thanks Michael.
Posted: January 31, 2010 9:21 PM
So.
You can buy MP3s off Amazon and put 'em on the iPad.
You (apparently) can buy books off an ePub publisher (like say PragProg) and put them on the iPad.
You can open a H.264 video stream in Safari and watch it no problem.
So, Apple is CLEARLY preventing content from coming on the device. Clearly.
Posted: February 1, 2010 12:43 AM
It is worth having a broad discussion about Apple, DRM, and the chokehold of app approval, but let's remember this iPad widget has a web browser as part of its central experience.
The app store (and iBookstore, et al) is about promotion, not distribution.
Posted: February 1, 2010 3:35 AM
Emanuele, Apple is making it difficult to put other content on the iPad. But it'll make sure that its 'i-media' looks better on the iPad than everyone elses' media,' or 'e-media.'
Posted: February 1, 2010 10:01 AM
"Emanuele, Apple is making it difficult to put other content on the iPad. But it'll make sure that its 'i-media' looks better on the iPad than everyone elses' media,' or 'e-media.'"
So let me get this straight
1) Viewing content via the web or syncing the iPad with iTunes (same as the iPhone and iPods and the best sync experience out there) in your mind is Apple making it difficult to put other content on the iPad?
2) Because Apple designs really nice software interfaces you are bashing them for making their media look better ?
Besides, won't an ePub book downloaded from another source be read in that same beautiful interface that is iBooks? Won't an MP3 file downloaded from Amazon play inside of the great iPod software on the iPad? Won't movies that I've ripped from my own DVDs play in the native movie player the same as if I purchased them from Apple?
The success of the iTunes store is because of its simplicity, not because Apple is forcing anyone to use it by making it the only way to load media onto your iPhone or iPod. I guess in your perfect world Apple would make horrible interfaces so that people would want to buy their media elsewhere? Oh wait, you can already do that on your HP Slate with your Zune or Android phone.
Your article is a complete and utter joke.
Posted: February 1, 2010 1:14 PM