03:36 AM

[news analysis] Could a multimedia iPod allow Apple to dominate movie and TV online sales?

...Microsoft and Sony move to block Apple's ambitions

By Tom Foremski for SiliconValleyWatcher

iPod_Girl.jpg>Apple’s next moves in the consumer digital space are strikingly obvious—build out its iPod family and add high-end models that can display video and offer wireless connectivity of various types.

Apple’s forthcoming multimedia iPod (let’s call it mPod for now) will be based, we understand, on the latest Broadcom Alphamosaic chip. But the specifications of the device itself are far less interesting than what could be done with it from the user perspective, and from the business models Apple can build around it.

In the same way that iTunes, Apple’s online music store, provided a large selection of paid-for music content, Apple now has the opportunity, and formidable task, of persuading movie and TV studios to allow Apple to sell their digital content through online stores.

If Steve Jobs succeeds, Apple will own the keys to the digital entertainment kingdom; because the company that has the dominant digital rights management (DRM) technology becomes an extremely important gatekeeper.

The DRM is pivotal, because this is what protects content, sets permissions, tracks usage, and is the payment mechanism for digital content of all kinds.

You can see the blocking moves in the market.

Last week, Sony said it would create an “iTunes for Hollywood.” And Microsoft launched a service to download and play TV shows on portable devices.

Bill Gates has been gunning for that sweet spot in DRM for years. But Hollywood won’t let it happen; it won’t let a company that has been found guilty of monopolistic business activities own the DRM. It won’t happen.

Will the movie industry allow Apple to establish the dominant DRM?

It might not have a choice if Jobs can sign up enough studios and TV production companies, and if he is making money for them. And you can only view/access the content through Apple products. Sweet, very sweet.