New York Post Online Edition: business
I guess this starts to give us some answer about what people are willing to pay for content! And that's the key to what Apple has done. There have been other video players on the market for much longer, but it's the addition of content that makes the video iPod so powerful. Interestingly, there seems to be an appetite for informercials/long form commercials for the iPod. Not surprisingly, there's talk of a boom in the porn business too.
Less than three weeks after Apple Computer introduced its new video-playing iPod, the company said it has sold hungry techheads more than 1 million videos.
"This strong initial demand definitely shows that there is a healthy appetite for online video," said Steve Lidberg, a senior research analyst at Pacific Crest Securities. "This will likely accelerate Apple and the content owners coming together to make more content available."
Apple shares added $3.12 to $57.59 in Nasdaq stock market trading, but was down 60 cents in after-hours trading.
Since the new iPod's debut, analysts and industry watchers have been waiting for Apple's sales numbers to get a sense of what the market would be for select downloads.
Apple began selling music videos and episodes of ABC hits "Desperate Housewives" and "Lost" for $1.99 on Oct. 12.
The company said those TV shows, along with music videos by Michael Jackson, Kanye West, and Fatboy Slim, were among the top sellers.
Apple's performance is all the more noteworthy, Lidberg said, because the company was able to sell so many videos to its consumers despite a limited library.
Apple initially introduced the service with just 2,000 music videos, episodes from the two ABC shows, and a handful of short films from Pixar, the animated movie studio where Apple boss Steve Jobs moonlights as CEO.
The next step for the company will be to stock its online music store with videos that consumers want to watch, and more important, are willing to pay for.
Jobs acknowledged as much yesterday when he said the company's next challenge was to "broaden our content offerings."
Lidberg said that unlike the music industry, which initially resisted making its content available online, the video industry is "more progressive."
He added that video content owners are "looking to exploit new opportunities" for content distribution.
Video for sale on the Internet also offers tantalizing possibilities for the advertising industry, Lidberg said, because the model allows advertisers to have a one-on-one relationship with consumers.
Advertisers will be able to target ads to each consumer based on personal data they have collected, Lidberg said, as well as their past purchase history.
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