Does Sony's move to support Apple's choice of the AAC format mean that Steve Jobs has won the war? Or merely the battle? All I know is that in November of last year, I wrote a piece about teaching the mass market and the importance of critical mass. Hang on folks, the ride has begun.
iPod as a Verb
by Lydia Loizides
April Fool's Day, 1976 and Apple comes to be. After several product launches that rocked the industry and became the basis of what we know computers to be today, the Apple Macintosh was launched in 1984 with the now famous Super Bowl advertisement based on George Orwell's novel 1984.
Fast forward. The year is 2001 and there are approximately 2 million MP3 players in the U.S. market and many, many legal and illegal music services. But the market is going nowhere, fast. P2P hysteria, a global music market crash, and little-to-no mass consumer awareness, and along comes Apple with a music player called the iPod. Two years later the connection from platform to service is made and iTunes is launched. By the end of 2004, Apple had sold 200 million units. Three months later 300 million songs had been sold. Three months after that, the company says it has hit 460 million songs sold. In the course of 4 years, the iPod has grown to dominate the market with 76% market share as of June, 2005 (Jupiter Research puts the number at about 12 million MP3 players connected in the U.S.). Apple has since become synonymous with online music (much to Sony's dismay) and there are numerous derivations of the iPod that have flooded, and more importantly, been adopted by the consumer market.
So why the diatribe? Because all great businesses need critical mass before the chance of a product succeeding is better than 50/50. The iPod is almost there. The fact that video for the iPod costs $1.99 today, it really doesn't matter. It doesn't matter that the quality of the video at full-screen is no better than VHS. It doesn't matter there are over 15 applications that I can find to break the rights management on the file and share it with all my friends if I were so inclined It doesn't matter that there is only a straw-man of a business model in place. What matters is that the iPod for video will entice, educate and entertain an entire generation of mainstream consumers who, up until this point, had no idea what the term "mobile content" meant. Having sold and downloaded over one million videos in the first 20 days after launch, Apple has proven a market exists and that people are willing to pay. The iPod, an entertainment platform small enough to fit into my purse, will "cross the chasm" to mass market faster and better than any break-out technology of it's generation (DVD not included).
Hang on folks, we are in for a hell of a ride.
Turning Value On Its Head (Or At Least Thinking Out Of The Box Office)
So, The Hollywood Reporter publishes The Top 40/Film list weekly. I was perusing the numbers and analysis bytes that highlight the winners and the losers when something made me stop and think. The caption pointed to the 61% drop in the weekend gross of "Wanted," stating that this was "a big sophomore drop, even for an action pilot." A 61% drop is always a bad thing (unless it relates to the price of oil).
But as I started to think about it and put ALL the numbers together, I was sort of irked at this casual comment. Let's look at the rest of the information, shall we? The film was in its tenth day of release, the cumulative gross was over $90 million. Now, compare that to, let's say, "Speed Racer," which was in its 59th day in release and had cummed a little over $43 million. Uh-huh. Looking at other films that were in the same range of days released. "Wall-E" was down 48%, with a cumulative gross of $127 million. Totally different genre from "Wanted," way wider audience, showing in 800 more theaters — and $37 million separates the two. Uh-huh. (By the way, "Hancock" scored a $103 million in the first five days of release — so never, ever question the power of Will Smith again.)
Then I started thinking about rating drops and shifts, and it hit me that part of what we miss in the pure day-to-day analysis of ratings in television is, well, the long-term performance. How long has the program been airing? How stable is the core audience? What is the value overall of the property, and the brands that are associated with that property and its actors, etc.? And finally, what has the value (both implicit and explicit) of the program been to the network?
Sure, drops suck — but we need to start looking at the numbers as part of a much larger picture. Wouldn't you agree?
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