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Summary:

In arguing that Apple’s iPad could change the way people consume video, the biggest hurdle to my thesis was that the iPad doesn’t support Adobe’s Flash, which has become the de facto vehicle for delivering video from a number of popular web sites. How could the […]

In arguing that Apple’s iPad could change the way people consume video, the biggest hurdle to my thesis was that the iPad doesn’t support Adobe’s Flash, which has become the de facto vehicle for delivering video from a number of popular web sites. How could the device revolutionize online video viewing when it doesn’t support the main way that people currently view video online video?

While you probably won’t be able to stream video from Hulu or Netflix on the device at launch, I’d argue that the lack of available web video on the iPad (i.e. video delivered in Adobe Flash or Microsoft Silverlight) is only a short-term problem. That’s because I believe that over the long term, such content — and more — will be made available through iPad apps.

As time goes on, I expect iPad app development to be driven both by consumer demand and by media companies looking to develop new business models. Apple already has a vast — and growing — developer community for the iPhone and iPod touch, and video providers have shown that they will create applications for individual devices, so long as they see a decent user base and a possible monetization strategy.

Roku, for instance, has sold only 500,000 units so far, but there are hundreds of organizations developing apps (or “channels,” as Roku likes to call them) for its broadband set-top box. Same goes for Boxee, which to date has less than a million users for its beta software and hasn’t yet rolled out its hardware device — yet still lays claim to a healthy community of developers that want to get on its platform. Even in the most conservative estimates, Apple is expected to sell more than a million units of the iPad, which means there should be video companies lining up to develop apps for it.

Furthermore, Apple has already proven that its apps can provide new monetization models for content owners. Prior to the iPad launch, much of the discussion about it revolved around how the device could help book, magazine and newspaper publishers create new revenue streams. But the creation of new business models is equally important to video publishers.

Major media companies have long bemoaned the fact that they haven’t been able to monetize their digital assets as well as their broadcast, cable, box office and DVD revenue streams. And while sales of digital apps in the short term may not be a panacea for the slumping TV ad market or weak DVD sales, the iPad app store at least presents the opportunity for paid app or subscription models that weren’t available before.

Major League Baseball’s app strategy is a perfect example of how video publishers have been able to leverage the iPhone — and soon the iPad — to better monetize their video assets. The MLB At Bat app — an updated version of which Apple showed off during the iPad presentation — was the No. 2 highest-selling app in 2009, despite its $9.99 price tag. And many of its users also subscribed to the league’s MLB.tv service, which allows customers to stream live games from a web browser, select set-top boxes (like the Roku player or the Boxee Box) or mobile device for $100 a year.

You could see similar possibilities with the release of a Netflix app, which would extend the brand onto yet another platform and could boost adoption for users that want to take their streaming videos on the go. And if Hulu is really looking to move to some sort of a paid subscription model, as it has long been rumored to be considering, the iPad presents the perfect medium and platform for it to do so.

So, no, video on the iPad won’t be Flash-based. And no, it won’t be “open.” And it probably won’t be free. But providing a means for video publishers to develop new revenue streams on the iPad is probably not a bad thing — even if those revenues are based on a closed system.

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  1. thebigchuckbowski Thursday, January 28, 2010

    Please take the Apple Fanboy glasses off for two seconds and realize you’re advocating consumers paying money to get flash content that they can get for free on EVERY other computing device on the market except smartphones. Really? That’s good for consumers?

    You mean if I own an iPad and Hulu releases an App, I could pay money for a free service. What a great step forward in our society.

    1. I’m not advocating that video companies charge for apps that have content they otherwise give away for free. What I’m saying is that those companies already want to roll out more monetizable online video services, and the iPad gives them a platform for that.

      Just a couple of examples:

      Hulu won’t be charging for an app that has the same content free on the web site. But if they do roll out a subscription service, the iPad gives them a platform for it.

      And there are already some pretty slick apps for cable networks like HBO and AMC — with the iPad they can build value-added services through subscription or pay-per-view sales direct in the app.

      I find it interesting that everyone agrees that the iPad should help print publishers, but not video companies… Don’t the same issues apply, in terms of free vs. paid and developing new business models?

      1. Sure. They could have the app be free but why should Apple force these companies to hire employees and spend the time just to create an iPad app (that they aren’t going to make any money on beyond opening up their content to more devices) when these companies have perfectly usable websites.

        The “well, they can make an app” argument is complete bull. Flash is just as much a part of the web as CSS and every video being in HTML 5 is years out. They can try to say it’s because they want the iPads to run perfectly, then why not block Flash on MacBooks too? Or how about just giving a warning to users before they install the Flash plugin? The ONLY reason to block Flash is to force the creation of Apps (so Apple gets paid) and force you to buy movies/TV from iTunes (so Apple gets paid). Frankly, it’s a disgusting business practice and the fact that there are bloggers cheerleading this is completely absurd.

        “I will defend net neutrality until the day I die just as long as we’re not talking about an Apple device!”

      2. The alternative is that video publishers make video available for free, in which case neither Apple, nor the content owner gets paid. And the consumer has less choice because the content owners decide there’s no point in giving stuff away for free indefinitely.

        Oh, and uh. I never said I was for net neutrality. I realize this puts me in a contrary position in the blog world, but whatever.

      3. There already is an app for that. It’s the iTunes store.

        Hulu is a solution to a present day problem. The iPad, and other platforms like it, represent an opportunity for media companies to build the dual revenue stream model they desire (subscription + ads).

        Apple is dead on with this product, others will be following.

      4. Even though there might be apps for flash I do not like Apple putting a throttle on my freedom. Don’t get me wrong I really like Apple products, but the tablet is really pushing it, it’s almost a computer! I would rather have flash and low battery life rather than a lack of decisions. Apple is (and should be) free to make decisions about flash in their products. In fact it is probably a good business decision on their part. However, I do not like how Apple is attempting to centralize (or even monopolize) all the media. No monopolization is good, some of you might remember (or read in text books) about how at&t monopolized the telephone. It was insanely expensive compared to today. Once the government broke up the monopoly, BAM no more backpack cell phones with outrageous monthly prices. The cost of using the telephone gradually decreased with competition.

        I think this is a great product, however, for the technologically challenged it’s easy and simple. However, for the cheap tech geek they might want something with more flexibility. I thought about getting the iPad, but without the Flash its a no for me. The point I am trying to make is that with competition everything is better. Also, I hope Apple doesn’t grow into something like Microsoft, a pseudo monopoly.

      5. I think the fact that facebook (the number 3 video provider on the web) doesn’t have video functionality in their iPhone app is pretty telling. The iPhone has been out how long? And we still can’t watch hulu, facebook, etc. If those publishers aren’t creating apps or apple won’t allow their apps, why would they for the ipad? It’s not going to come close to selling the number of copies the iPhone and iPod touch have.

      6. How is the only alternative that publishers give it away for free? If flash is available, I have to suddenly put my content online for free? I can’t put it in the apple store if i want? Or sell it on my own? Or sell it through different channels? Nope. I can only give it away. Thank god for apple. How would any of us make any money without them?

      7. Really. Apple is making it harder for content creators to sell their content. If Apple doesn’t let your product in their store or you don’t want to sell in their store for whatever reason (and there are plenty), IT’S IMPOSSIBLE TO MAKE ANY MONEY OFF THE IPAD. So, how is that good for publishers?

        Do we really want to enter a world where the only way to publish content online where people can get it is through Apple? Really? What are you going to say when they start taking 90% of everything they sell, or only sign contracts with major publishers and leave independents by the wayside? Publishers can’t say a word because it’s the only way to get their content to their audience.

  2. One thing I have not seen anyone discussing, because it is a guessing game at this point, is how many iPad’s will be sold? If Apple does not sell a lot of them, then the opportunity for content owners to make money via apps does not exist. What’s the number of devices Apple needs to have in the market before there is a really opportunity for content owners? And whatever that number is, how long will that device penetration take? I don’t see anyone asking what happens if the iPad does not sell as many as everyone assumes it will.

    1. Dan great point, could not the same be asked of Boxee?

  3. iPad as Video Device? Not So Much Thursday, January 28, 2010

    [...] dominance of Flash online is not going to disappear in the 60 days before the iPad is released.  Ryan Lawler at NewTeeVee thinks the decision against Flash is a smart one in that it will push video sites to [...]

  4. iPad as Video Device? Not So Much « DDT P2P News Thursday, January 28, 2010

    [...] dominance of Flash online is not going to disappear in the 60 days before the iPad is released.  Ryan Lawler at NewTeeVee thinks the decision against Flash is a smart one in that it will push video sites to [...]

  5. Did no one get the memo that Flash Video looks like shit?

    1. Yeah, Vimeo HD looks terrible — you’re right! Are you an idiot?

  6. Buy an iPad, be an iLoser. Apple is trying to sell this to suckers for a lot more than some laptops and netbooks cost. Then Apple also wants to charge them tons more for videos and games they can already get free on the web. Apple is no longer cool and Apple fanboys are now iLameboys.

    1. I agree. The people who create movies and music and games and write books and magazines and newspapers should all work for free and not earn anything for their hard work and creativity. Oh wait, never mind, I don’t agree.

      I am perfectly willing to pay for professionally created media and entertainment. And so is the rest of America, they prove it by spending billions every year on films, music, games, sports, books, magazines newspapers and more.

  7. @Funeral Director: Yes, the same thing should be said of Boxee, which to me, is one of the most over-hyped things in the space in the last two years. I’m all for it, but many, many people already claim it the winner when it’s not even out in the market yet.

  8. Hulu’s Plans for the iPad, the Mobile Internet – GigaOM Friday, January 29, 2010

    [...] Apple’s iPhone OS platform doesn’t. If Hulu has to support iPhone OS, it would need to re-encode its videos in order to make them [...]

  9. pctv4me » Blog Archive » iPad: No Flash Video, No Problem — There#39;ll Be Apps for That Friday, January 29, 2010

    [...] Today found this great, post read this quick excerpt : In arguing that Apple’s (s AAPL) iPad could change the way people consume video, the biggest hurdle to my thesis … Read the rest of this great post Here [...]

  10. SiliconANGLE — Blog — Is Hulu Coming to the iPad? Friday, January 29, 2010

    [...] Flash, while Apple’s iPhone OS platform doesn’t. If Hulu has to support iPhone OS, it would needto re-encode its videos in order to make them [...]

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