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Microsoft: TV must avoid "iTunes moment"

updated 07:50 am EDT, Mon August 31, 2009

MS on TV and iTunes Moment

The TV industry needs to find a convincing online strategy or else risk handing the market over to Apple, Microsoft's UK managing director of consumer business Ashley Highfield warned this weekend. Speaking at an international TV industry festival in Edinburgh, the executive warned that TV could "face its iTunes moment" in two to three years and hand over control of online video to Apple. Without a quick shift in emphasis to TV on the web instead of traditional service, customers are predicted to flock to paid download services and bypass regular providers altogether.

Solving the problem will likely involve pushing targeted ads, bought through an auction-based system. Although it wouldn't fit the conventional TV model of buying ads based on the overall likely audience, it would boost the worth of ads to where advertisers would have more incentive to pay for TV shows online than on old, declining services like cable or satellite.

These changes should take about two to three years themselves, according to Highfield.

The warning is a reference to Apple's seeming control of the digital music business. In 2003, Apple took advantage of music labels desperate to provide a viable alternative to online piracy and obtained terms that were favorable to its own iPod sales, offering songs at a fixed, relatively low 99 cents per track. While the move jumpstarted the digital music market and gave portable media players real acceptance, it led to Apple controlling 69 percent of US digital music and Universal Music Group chief Doug Morris infamously describing his label as being in "golden handcuffs" as it's often beholden to Apple for success.

Highfield's statement is also an unusual concession of the digital video market for Microsoft, as it makes no mention of the company's own TV efforts. The company offers TV shows both through the Xbox Video Marketplace as well as the Zune Marketplace in the US. The two are expected to integrate soon, but neither have gained large traction compared to iTunes or to alternative business models like Netflix.

by MacNN Staff



  1. starwarrior

    Joined: Dec 1969


    All Ready There

    Put all old DVDs on server disk.

    Use Apple TV to rent new ones.

    Rental cheaper than all the ripping.

    Apple model is right . Music is played over and over while movies or seldom played.

    We have quit Blockbuster and Netflix.

    There is to much media. Keeping it simple with Apple TV has capture our family.

    We only wish that the rentals were three days to get use through hectic weekends.

  1. joecab

    Joined: Dec 1969


    Mr. Pot, meet Mr. Kettle

    Microsoft... warning people about the dangers of monopolies... ummm

  1. philomath777

    Joined: Dec 1969


    Translation of

    Microsoft FUD speak =

    We want to dominate you like we do 90% of the desktop computer market. We don't want you to pay the "Apple tax" of paying less for programs than what we want to gouge you for...

  1. nat

    Joined: Dec 1969



    from the company that did everything it could to try and own the web, destroy every competitor to the desktop, bundle it's way to dominance... geesh, these people are unbelievable.

  1. BTBlomberg

    Joined: Dec 1969


    What they really mean...

    We want you to run from Apple's dominance in media to us even though we have no idea what we are doing and no compelling platform to deliver it on. We have fallen out of the race and want to get our foot in the door. Please, please, please give poor old MS a bone. What have we ever done to you? Really?

  1. slapppy

    Joined: Dec 1969



    These guys wants to own everything. It's not enough to own a monopoly (95%) of the computing market, they want to sell you underwear and tampons in the future.

  1. testudo

    Joined: Dec 1969



    Does MS really think the studios haven't already figured this out on their own?

  1. jpellino

    Joined: Dec 1969


    This is too rich...

    MS as Cassandra. Did anyone remind them that they got in trouble for an anticompetitive monopoly?

  1. climacs

    Joined: Dec 1969


    Avoid Apple's

    golden handcuffs... you really want to wear Microsoft golden handcuffs instead!!!

  1. jamiec

    Joined: Dec 1969


    Bad Advice

    The advice MS is dishing out -- find an alternative to Apple now, before they take control of your business model -- is exactly what the music labels tried years ago. They looked for any alternative they could find, and when those alternatives failed, they were in an even worse bargaining position than when they started.

    An online ad-supported model is notoriously hard to sustain, while Apple's model of users actually paying for the content (imagine that) is a proven success. Putting your content up on Hulu may seem like a good way of hedging, but sooner or later it comes out that you're losing a poopload of money by doing that.

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