Get Your GEEK On!!!

Every week I get stuff in my email, purportedly having ORDERED it... stuff like email newsletters, etc. Blah, blah blah....

Several of them are financial ones.

This is an excerpt from one I got about a week and a half ago:

2.Investing based upon a single popular product.
Following the latest "hit" product or service is risky. It's little more than a crapshoot to buy Apple Computer (Nasdaq: AAPL) because of the iPod or Motorola (NYSE: MOT) because of the RAZR. These companies could both do well going forward, but it will be because of more than one simple product. It's better to look for other qualities behind these hit products to see if the current success can be replicated.

Particularly cogent given that Apple (AGAIN) has shown why it's the most nimble, forward-thinking, know-it-all computer maker in the world. There seems to be a constant and crazed schedule of seemlingly endless iPod product rollouts; new video screens, a little more storage capacity.

yawn.

But then, what to my wondering awe??!

They once again place themselves as the new benchmark and standard for the entire family mobile entertainment system, in one easy announcement. Folks, Apple stock is HARDLY a crapshoot.

Watch the announcement, then bow down.

Movies - now playing everywhere. Including on your TV. Over and over again. To understand the gravity of this announcement, and its import to how you interface with the entertainment industry, there are some things for you to understand:

First, companies like Blockbuster, Netflix, Comcast Digital, and their ilk have been looking for a way to offer downloadable movies with good quality, in the shortest time possible for a VERY long time. The hurdles are many, like getting the movie industry to buy off on the financials, residuals, security, download times, etc. These are familiar hurdles to Apple; they had to leap them once before when iTunes was announced in the heyday of the free peer-to-peer pirating sites, like Napster, etc. The proliferation of these sites has given stomach ulcers to entertainment moguls for a long time. And they feared Apple would leave the back door open and make a mistake that would allow people to whip their iTunes downloads onto a P2P site for free distribution.

Hasn't happened. Apple closed and locked the back door successfully.

However, not every music/record label is thrilled - but that's another post for another day.

Anyway, back to the announcement. Apple has intorduced a new version of iTunes. One that allows users to download movies, like you would rent/Netflix a DVD. Is it perfect? Not yet - I'm sure there will be speed issues with the download. Ever tried to download an episode of The Office from iTunes? It. takes. for. ever. Even with a quick connection. It's just lots of data.

But Apple wants it that way for now - they are bearing the cost of hosting that long connection in order to keep security where it should be, as opposed to farming it out to a multi-host environment like bit-torrent.

The nice thing about the Apple announcement is that they also announced the iTV product, which is a box that transmits high-bandwidth quality to your TV from your PC - wireless. This has been the missing link for a long time. There are many manufacturers out there that have introduced set-top boxes that are basically PCs for the living room. To resounding mediocrity. Poor quality, poor performance, noisy, ugly, spendy. Crap.

The iTV takes a page from the standard manual of Apple's Insanely Great design element, and makes it the first unit that actually presents a viable solution to the problem. The Killer App. How many times has Apple done this? MANY.

There are a couple things that are special about Apple's announcement today as it pertains to Movies and TV shows.

1. The 80gbs hard drive.
The opportunity to download movies to a hard drive and KEEP THEM THERE and replay them AS OFTEN AS THE USER LIKES is critical. It's a great first step towards carrying around your video library as easily as you carry around your music. As hard drives grow, so will the number of titles you can store, and of course the door will open for high def. It's clear that the iPod is not only a playback device, but is now a personal or family digital content host.

2. The 1.5mbs encoding speed for self proclaimed "near DVD quality" is important. First of all it sets a quality floor using H.264 and they didnt lie and call it DVD quality. Others that want to call their offerings DVD quality will at least have to match the Apple quality to compete. It also means that HD quality, when it comes, will really be HD quality at 8mbs or more encoding levels.

3. The first two items are nice , but it's No 3 that is the key to the future of digital content.

The most important element of Apple's announcement is that the iPod interface is now viewable on your HDTV. Cable and Satellite companies are working hard, spending tens of millions of dollars to optimize their Programming Guides to incorporate Video On Demand, DVR ability, Internet Content, Purchase of content and TV Programming Guides. Of course this is a matter of my opinion, but I think that the Apple interface, because it already has tens of millions of consumers trained to buy content on impulse ALREADY has to have the edge. Adding a Programming Guide of TV shows and controlling a tuner (in your TV using OCAP possibly) or a tuner built into a future iTV box would put it square in the crosshairs of the cable and satellite companies as a direct competitor. Just the way Apple likes it.

Its going to be very interesting to see how not only cable and satellite respond, but also how TV manufacturers respond.

Like Apple or hate Apple. It doesn't matter. They're the leader. Again. Still.