iTunes will survive Joost threat, analyst believes

Pundits who predict a crisis for paid video download services like iTunes are wrong, says a leading technology analyst. The challenge from advertising-supported rivals like Joost will not be a knockout punch, says Mike Wolf of ABI Research.

While TV show downloads will mostly be funded by advertising in future, movies are a very different story, points out Wolf, who is a Research Director with US-based ABI.


Wolf made his comments in reaction to those from another respected industry observer, James McQuivey, a principal analyst with Forrester Research.

"The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today," McQuivey believes.

“What this analysis ignores,” comments Wolf, “is that there is a big difference between TV and movie content, and you're not about to see the newest studio home video releases in the Video on Demand windows in any ad-supported format at all,”

Movie subscriptions?

Forrester's McQuivey expects movie studios to move to subscription models that “imitate premium cable channel services."

Again, Wolf sees the future differently. “The fact is that movies will continue to be available in either hard formats (DVD) or through electronic distribution, and new forms of electronic distribution are just going to get easier and easier for consumers to use,” he writes at ABI's website, “They may be somewhat unfriendly today and mostly PC-centric, but there are going to be a raft of new solutions - including from cable and satellite providers - that make electronic downloading at the TV much easier.”

DVDs not dead

The era of physical media like DVDs is a far from over, Wolf says, although downloads will increase. “ I think while consumers aren't ready to give up their DVDs any time soon, they will begin to soon compliment their DVD purchases and rental with electronic downloading,” he says.

While movies are a special case, TV downloads will eventually be mostly ad-supported, Wolf agrees – just as current TV broadcasts are almost entirely ad-supported.

“TV content is another story. This content will be mainly ad-supported, whether it's Joost, or through the NewCo digital distribution joint venture formed by Fox and NBCU,” he says. In this respect, his views seem broadly in line with those of Forrester Research's analysts.

Further Reading: This article at Ars Technica examines the predictions from Forrester