Analyst: Apple Multi-Pass a sign of things to come

With the addition of Comedy Central’s The Daily Show and The Colbert Report to Apple’s iTunes earlier this week, available video content has gone from weekly programming to daily content. The importance of this move, says one industry analyst, should not be overlooked as Internet video begins to mature.

“What we are beginning to see here is an indication of an important future trend,” Phil Leigh, president of Inside Digital Media, told Macworld . “This [The Daily Show] is one of the most significant developments on the Internet.”

The new Multi-Pass allows users to purchase television episodes in advance for a reduced cost. The Daily Show is available for $9.99 as a Multi-Pass, which includes 16 episodes or one month’s worth of content. The shows can also be purchased for $1.99 per episode, which would cost users $32.00.

While the Multi-Pass has been referred to as a subscription service and many users may see it as a subscription, Apple was quick to set the record straight.

“This has nothing to do with subscriptions,” said Eddy Cue, Apple’s vice president of iTunes. “Anyone that says this is a subscription is thinking about this in an old school way. A subscription as we talk about it in the online space is all about rentals and what you can and can’t do with the content. That’s not at all what this is – this is about buying the content; you own it, we just make it really simple to do.”

Apple has so far been resistant to offering its customers any type of subscription service because they say that customers want to own their content, not rent it. With a subscription service, when you stop paying the monthly fee, the content you download will no longer work.

Analyst Phil Leigh says, for now, Apple is in the drivers seat, but the company may have to look at subscriptions as an option in the future.

“Technology has made Jobs’ statements obsolete, but as long as Apple has the dominant position they do in music, they are going to run it the way they want to.”

Apple also said that having the Multi-Pass as an option for networks to sell their programs online probably wouldn’t affect if or when television shows came to iTunes.

“There are two key factors to getting more content: time and acceptance from customers,” said Cue. “It is not just about them wanting to join – there are clearances and rights that have to be dealt with. Some are more complicated than others and that all takes time. This is no longer an experiment to see if customers want this or not.”

Leigh points out network affiliates as another issue that has to be dealt with by the major networks. While the networks may recognize selling their shows online may be something they have to do to stay relevant in an ever-changing market, they also do not want to upset their affiliates. At some point, says Leigh, networks and their affiliates will have to deal with the problem.

“Internet video is no longer in its infancy,” said Leigh. “It’s moving into the early adopter stage and is becoming commercially significant. It is really showing the computer is just another screen for television programming.”

Comedy Central has embraced new technology to get its programming out to as many people as possible. The station offers comedy albums for download from iTunes, several television shows, including South Park and The Daily Show and they also offer daily jokes that are sent to customers via text messaging. So far, iTunes has been a great extension of Comedy Central’s overall goals.

“It’s been wonderful,” said Aileen Budow, Comedy Central’s vice president of Corporate Communications. “We know that our audience is looking for this content and comedy works so well on these different platforms. We want to make it so you can get Comedy Central anytime, anywhere.”

Budow also confirmed that Comedy Central would be rolling out more programs on iTunes in the future, although no specifics were available.

With more networks offering more programming through iTunes, analyst Phil Leigh believes this is going to be an important year for Apple and online video.

“A year from now we are going to look back and say ‘2006 was the year of Internet video,’ said Leigh. “Apple will figure prominently in there, but not exclusively.”

This story, "Analyst: Apple Multi-Pass a sign of things to come" was originally published by PCWorld.

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