TMO Reports - Apple Starts Bundling Music Videos on iTMS (UPDATE)

by , 1:00 AM EDT, May 10th, 2005

Apple Computer has begun bundling downloadable music videos on its online music service, slowly entering a new direction that could easily expand into all types of video services.

With the debut of its iTunes version 4.8 software, announced Monday, Apple quietly began selling music videos via its iTunes Music Store (iTMS) late Monday, together with selected music albums.

The videos are being sold as part of an album and can be downloaded following the purchase of the music. Some albums downloaded by The Mac Observer include one video, while others include two to four videos in small segments. Most videos are in 480x272 pixel format at 30 frames per second and use 44 kilohertz audio quality.

Various reports indicate the videos can not be viewed on any of the current iPod digital media devices, but can be viewed on other Macs and Windows-based PCs, meaning there is no embedded digital rights management technology in the video files.

In some instances, albums with videos are being discounted as a marketing incentive. It does not appear that videos are being sold separate from albums.

It is not known how many music videos are being offered, as Apple has not provided a separate page highlighting downloadable videos. At press time, TMO had found some 50 downloadable videos on both the U.S. and U.K. iTMS.

Apple has begun to bundle music videos with selected albums.

Analyst: Online music videos are just the beginning

Simon Dyson, an analyst with London-based Informa Media, believes it's not stretching it too much to think the addition of music videos on iTMS is just the beginning of a much bigger evolution.

"It's the obvious next step in the future of the iTunes Music store," he told The Mac Observer. "I would imagine there was a lot of license negotiations with record labels over adding videos, which played a big part in the timing of this release...I would imagine one reason it was launched quietly was because few music labels have plans in place to offer videos together with albums or cuts online, but now that it has started, I'm sure they will all want to negotiate similar deals."

Mr. Dyson said the next step is for Apple to offer an iPod with video capabilities so that customers have portable options that make downloading music videos a demanding option.

"Microsoft has been offering Windows Media Player together with third-party players that show videos for a little while," he said. "I think Apple knows they have to offer this option as soon as possible and this is the beginning of that next step."

Mr. Dyson believes another reason Apple probably is rolling out online video downloads slowly is the issue of broadband issues that still impact the majority of consumers with online Web access.

"It is a big step from selling music to selling videos because of the enormous file sizes and the fact most consumers don't have high-speed Internet access. Videos really need broadband and the different compression technologies. I'm sure Apple is going to test the waters, both in terms of consumer reaction and jumping through technological barriers."

Using iTunes 4.8, customers can not only store video files, but play them in the thumbnail window, normally used to display album covers, as well as a separate QuickTime window (see screen shot below). Users can default to always watching a video "in the main window," "a separate window," or "full screen" by selecting an option in the "Advanced" preferences.