1/24/2012 7:44 PM ET|
After iPhone and iPad, an iTV?
Here's a quick look at some other potential winners and losers as TV and movies go online:
Paying $1 or $2 or more to download an episode of a popular TV show may seem high now. But technology will drive down the cost of content for at least two reasons.
First, the Internet makes it a lot cheaper to deliver content, which means more will be available. Second, technology is making it cheaper to produce content, which also means more will be available. When more of a product becomes available, its price normally falls; that's likely to happen to video content, too, predicts Sansoterra.
This is not good news for major content providers such as Disney, Viacom (VIA, news)or TV networks like CBS (CBS, news)and NBCUniversal, now majority-owned by Comcast. Their production costs will remain relatively high.
That could be one reason a lot of movie and TV companies have been reluctant to go online or play with Apple. They don't want to give up profits, as the music industry has. So they're wary of abandoning the cable-and-satellite distribution system that has been so good to them.
"Content creators don't want to upset what has been a pretty lucrative system for them for a long time," says Hodel.
How long they can resist, though, remains to be seen, especially as the number of Apple users keeps increasing, says Shope, at Goldman Sachs.
The rise of online video consumption means it will be easier for advertisers to learn even more about your tastes by tracking more of what you watch. This is a dream for advertisers, because it means they can target ads more precisely. This ability to better target ads means even more ad dollars will move to the Internet, away from traditional advertising venues like newspapers, magazines and regular TV, says Sansoterra.
This one's fairly easy to call. Companies that now get a lot of their revenue from DVD distribution will get hit as most TV shows and movies become available quickly online.
This includes Netflix (NFLX, news)and Coinstar (CSTR, news), the company behind the Redbox DVD rental system. Content providers like Disney and Viacom may also feel some pain, since they reap profits from DVD sales.
Netflix, of course, has tried to move online, with mixed success. And if Apple does to TV what it has done with music, it may simply suck all the air out of the room.
This one's a little harder to call until we know what an Apple TV will actually look like.
Yes, iPods hold most of the music-player market, and the iPad is dominant among tablet computers. But phones powered by Google's Android are competitive with iPhones, and Macs haven't taken the market from PCs. So a flat screen from a giant like Sanyo or Samsung and running something like an Android operating system could well compete with an Apple TV.
Some potential winners
Analysts point to several possible winners in the transition to online video and TV consumption, besides Apple and Google.
Sycamore Networks (SCMR, news)has a bandwidth-management system that reduces congestion in the major pipelines of smartphone providers. It delivers popular videos to cellphone towers for distribution from that point on, reducing bandwidth consumption, says Scanlon, at John Hancock.
Eiswert, at the T. Rowe Price Global Technology fund, owns at least two companies as plays on the increased interactivity expected in the Apple TV and other devices. One is Nuance Communications (NUAN, news), which makes voice-recognition technology similar to the kind used in Siri feature on iPhones. Another is Atmel (ATML, news), which makes chips used in touch technology on phones and tablets, and probably on TVs of the future.
For other investment options, of course, there's always Apple stock. In five years it's gone from around $90 to around $425. And if you're wondering what could possibly push it higher, Apple TV may be the next big thing.
At the time of publication, Michael Brush did not own or control shares of any company or fund mentioned in this column.
Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.
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I don't own an ipad or iphone so i am sure i wont buy an iTV.
People have built to much of their lives around technology and the latest version of that tech.
I have a simple flip phone, a basic lap top, an old deck top and my own abilities which get me everything i need.
I do admit i really like the GPS in my last rental car because i was in a strange city but i would never need it for 99+ % of my driving time, so why buy it?
Ask yourself, do i NEED it or do i just WANT it. If its truly NEED then buy it but if its WANT, take a hard look at the cost(initial and on going).
How many more overpriced, over specked gadgets built on slave labor do we need?
I am perfectly content with my (non flat) TV and FM radio. These ridiculous gadgets are turning us into hermit lumps of clay.
they overlook the fact that this technology exists because it doesn't exist from Apple yet. Therefore it doesn't exist. But if Apple comes out with it then it will be 'Cool', until then, it doesn't exist.
Every other piece of technology in the world today is judged on it's merit, its specs, function.... Not apple. Apple is judged on how it elevates my social standings by you seeing me with it in my hand.
I appreciate the article's excitement, but I think there are some gross technological errors that affect the validity.
The current version of AppleTV is actually quite a bargain when given a small price tag of $99. In fact, I would almost state it is the best value in the Apple Store.
The article states "Of course, you can already buy "Apple TV" -- a box that lets you stream video from computers to your television. And you can buy TV and movies from the iTunes store to watch on a computer or other Apple device."
I believe this to be a bit off-putting and inaccurate. Why? It reads like you can only stream movies (or other content from your computer via iTunes), but neglects to mention that the current AppleTV already does allow you to rent and stream movies directly from the Apple iTunes Store from the device itself without the need for a computer! It also skips over the included services of Netflix, Vevo, YouTube and more.
The very technology the writer is anticipating is already available.
My prediction is this: Apple doesn't need a new device at all to corner this market.
With a small footprint and price, the current AppleTV is a spectacular product. Add to the benefits that it can allow you to wirelessly stream music, photos and videos from your iPhone or iPad (as well as computer), and I think it becomes even more worthy.
Since the device already operates on iOS like the iPhone and iPad, all they really need to leave competing products in the dust is open the interface a bit more by allowing app downloads (and just sell a wireless keyobard/mousepad peripheral), put on a version of Safari and open AirPrint with HP printers.
All of this can be accomplished with a simple update, no new hardware required.
Oh, and they need to market the product... this is why it doesn't sell well. Put it in a commerical with the iPhone or iPad and show people what it does!
When more of a product becomes available, its price normally falls; that's likely to happen to video content, too, predicts Sansoterra.
So says most economics text books. Too bad in the real world most corporations simply reap the benefits of the higher profit margin...
Once upon a time:
I was afraid that buying an Apple iPad would simply set me up for "the next big[ger] thing' just as soon as I put my money down for the [now] 'less big thing.' And so I hesitated, but finally bit the high price of $495.00 for an Apple iPad1. Well, you know what happened next; PDQ...Dah Dah!! Enter the iPad2...
About that time HP brought out their Touchpad and, just as quickly, dropped it... A young woman I know got two of them for me at a sale price of $149.00 ea. They're neat -- don't know why HP dropped the line -- and when I called Apple about a small problem I was having with the iPad1 and got into a friendly chat with the tech, telling him about my Touchpads, he immediately replied: "Hey, aren't they great? I've got one of them also." That, from an Apple employee.
So please don't tell me about any more of Apple's pre-release statements... When they come out with a pocket ESP device I might take a look. iTV? Why Apple? Every Asian manufacturer -- and that's what Apple really IS -- will soon have one on the market and I'll bet that many Apple employees will own those.
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