How Will Apple Compete With “On Demand”?

I continue to hope that Apple has more tricks up its sleeve in regards to iTunes and the sale of TV shows or movies, because while I do find the occasional missed episode or special to download, iTunes is not becoming my go-to destination for video the way it has for music. And after recent experiences with Comcast’s On Demand service, it’s clear the chasm to cross is a big one.

Comcast On Demand blurs the lines between pay per view and TiVo. If you’re unfamiliar, the On Demand premium cable service lets you view a wide variety of network TV shows or films for free, any time you want, assuming the episode has already aired. For newly released movies, the cost is a low $3.99, and shows are available immediately. But in contrast to iTunes, you are renting the show, and don’t “own” it forever, or have the option to take it from the TV to another device, like the iPod. A different use to be sure, but one I think Apple needs to keep in mind.

For example, on Sunday night, I rented “Night at the Museum” with Ben Stiller and Robin Williams, for the aforementioned $3.99. The show started immediately, without waiting for download, or taking up space on my computer. In contrast, iTunes doesn’t even have the movie available. If it did, the standard new release price is $12.99, and a download could be 1.5 gigabytes for the 1 hour 48 minute feature.

And while free options were limited, I could catch up on the last month’s worth of CSI Miami, The Office, Law & Order Criminal Intent and other shows without cost – much like TiVo’s famous Season Pass.

In this case, the advantages of On Demand over iTunes are clear. Less cost, less time to product, and elimination of utilized space. And the issue of renting versus owning media in the video space is a much bigger deal than with music. While I continue to buy an album a week or so from the iTunes store, I’m just not buying video. Once it’s watched, it’s done. Will Apple adapt in the face of nimble competition like NetFlix and Comcast On Demand?

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