Analysis: Apple rethinks its DVD stance

At the press event unveiling iLife ’08, Steve Jobs called the new version of Apple’s suite of digital lifestyle apps “the biggest enhancement to iLife since we invented it many, many years ago.” The same could not be said of iDVD ’08. Compared to its suitemates, the DVD-authoring app saw only modest changes—improvements to performance and encoding as well as new themes—and took up only 30 seconds of Jobs’ 45-minute iLife preview.

The scant attention paid to iDVD ’08 is a far cry from past versions of application. iDVD’s launch in 2001 gave consumers the power to create their own DVDS and helped Apple solidify its leadership position in digital video.

But times have changed, and not just for iDVD—this spring, when Apple introduced a revamped version of its Final Cut Studio suite, it did so without introducing any changes to DVD Studio Pro, the high-end version of iDVD.

If Apple is moving away from DVD—and the lack of attention shown both its DVD-authoring apps suggest that the company is—it’s only because it’s following the lead of its customers, executives insist.

“The market is moving away from the DVD,” said Rob Schoeben, Apple’s vice president of applications product marketing. “'We have a great solution for making DVDs and we fine tuned it for this release. If you want to make a DVD, we can help you make a really good one.”

But increasingly, customers don’t want to do that. With broadband connectivity becoming more widespread and video-sharing sites like YouTube growing in popularity, people aren’t looking to put their video on a disc—they want it on the Web.

“People view digital distribution as less of a hassle,” says Gartner research vice president Mike McGuire, who agrees with Apple’s Schoeben that the change is “customer-driven.”

Credit high-speed Internet connections and faster computers for getting people accustomed to receiving information immediately—wherever, whenever they want it. That need for immediate gratification has now come to media, as well.

“What people really want to do is share their content in a much better way,” Schoeben said. ".Mac Web Gallery is immediate, fast and easy. The market has moved away from DVDs and we have delivered a solution."

Apple embraces digital distribution

This shift away from DVDs is not just happening among Mac users, but all over. Ross Rubin, director of analysis at market-research firm NPD, sees more established forms of media giving ground to the “emerging phenomenon” of digital distribution.

Consumers visiting YouTube are quite content to watch a two-minute video taken from a digital camera or cell phone because it meets their expectations. Apple has been able to take advantage of the popularity of YouTube by incorporating it into two of its newest products: Apple TV and the iPhone.

But Apple is addressing this growing demand in other areas as well. Consider its .Mac online services. For years, Apple has enabled its users to publish content on the Web through .Mac. Homepage and photo galleries published through iPhoto are almost as common as computers these days.

However, changes in iLife ’08—not to mention new .Mac features —offer a glimpse into how serious Apple is about enabling distribution for its customers. Highlighting its announcement was the .Mac Web Gallery, a new way for users to share photos and videos online.

Utilizing Web 2.0 technologies, .Mac Web Gallery gives users the ability to build professional looking Web pages to show-off all of their important media. What’s more, it’s immediate.

“With .Mac Web Gallery, in a short period of time users can be viewing better than DVD quality media,” Apple’s Schoeben said. “This new world is a lot faster and makes a better experience for the viewer.”

Apple also gave .Mac users 10GB of storage space to keep all of the media they expect will be uploaded and viewed online. That is 10 times the amount of space available previously.

What about pros?

But DVD authoring goes beyond just consumers. The professional market will be using DVDs for many years to come, NPD’s Rubin said. And that makes the lack of a DVD Studio Pro update even more puzzling—especially with some users expecting support for Blu-ray disk burning to appear in Apple’s pro DVD-authoring tool.

Schoeben declined to discuss features in future product releases, but did point out that DVD Studio Pro does have support for the HD DVD format. What’s more, Apple belongs to the Blu-ray organization, which is responsible for promoting the next-generation optical disc format.

iDVD not going away

Back on the consumer front, digital distribution might be all the rage these days, but that doesn’t mean the DVD doesn’t continue to enjoy widespread use. A recent study from NPD found that consumers are slow to move away from their existing DVD players because those devices still work for them.

And while Apple may be sitting back on the new formats, its competition isn’t. With the release of CS Production Premium Suite, Adobe is hoping to capture Blu-ray-craving customers with Premiere Pro CS3. Together with its companion product Encore CS3 for Mac, Premiere lets you author once and then output to Blu-ray Disc, DVD and Flash SWF for the web.

For that reason, don’t expect Apple’s DVD products to fade away, even as the company emphasizes digital distribution.

“iDVD plays a role,” Schoeben said. “There are times when iDVD is the killer app for many people.”

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