Video iPod faced with fuzzy future

Is it "Steve Jobs's Folly" or yet another cool move by the trendiest tech company around?

A week after Apple's chief executive announced that the newest iPod would include a 2.5-inch video screen capable of displaying music videos and TV shows, analysts still aren't sure how much to make of it. By putting its reputation behind mobile video, Apple is sure to push the technology forward. But some suggest the company also risks identifying itself with a project that may flop. Uncertainty surrounding the level of demand for the product, the sources for compelling content, and its possible use to view pornography seems to leave more question marks than exclamation points.

"This is not the first time someone has tried to provide portable video. There's been everything from the [Sony] Watchman to portable VHS players," says Phillip Swann, president of TVPredictions.com, and a skeptic who follows tech trends in the television industry. "You can do a million things listening to audio: You can be jogging, you can be at work." Television demands a different level of attention, he says.

"Yes, it's the next step in the video evolution," counters Randy Giusto, who follows mobile and consumer markets for IDC, a tech trend tracker. "It makes perfect sense to put certain types of videos with the [iPod] audio. It's a natural fit."

The shirt-pocket-size iPod, with its signature white earbud headphones, is the darling of tens of millions of owners who use it to store and listen to thousands of music and other audio files downloaded from the Internet.

The new iPod video, which sells in two versions for $299 or $399, will also play music videos and a handful of TV shows, including the ABC hits "Desperate Housewives" and "Lost."

The TV shows, available the day following their broadcast, will cost $1.99 each. They will need to be just an appetizer for iPod video buyers who'll expect a full smorgasbord of other programming to come along quickly, analysts say.

"Apple doesn't have all that much content at this point," says Avi Greengart, principal analyst of mobile devices for Current Analysis, a research firm in Sterling, Va. "The Holy Grail will be full-length movies." He expects Apple will move into movies in the future.

The company hedged its bet by adding the video function to its wildly successful portable audio player. Apple sold 6.5 million nonvideo iPods in the three months ending Sept. 24, setting a new sales record. The new iPod is "really not a video iPod - it's an iPod with video," says Mr. Greengart. Buyers will still find the chief value in the audio features. "The screen isn't large enough to be a real video iPod," he says.

The small screen would seem to limit the number of people willing to view video on it - and how long they'd watch before going squinty-eyed or losing interest in the novelty. Experience in Asia with video on tiny cellphone screens - a technology now reaching the United States - suggests that viewers will watch only short video "snacks" of no more than a few minutes each. Apple's offering of full-length TV shows counters that finding.

If you're stuck on a 45-minute commute on a bus, Greengart speculates, maybe an entire TV show "would seem like a wonderful snack.... [But] certainly if they go after the video market in a big way, they're going to have to up the screen size."

Younger consumers, from tweens to 20-somethings, are used to viewing small screens, such as those found on hand-held video games, Mr. Giusto points out. "They're more comfortable watching video on a small screen, whether that's an iPod-supported video or a mobile phone video."

The market will decide what Apple does next, Greengart says. "They'll see how this does. They'll see how many of those television shows sell."

The video iPod is hardly the first portable video player on the market. Sony's PlayStation Portable claims to be the No. 1 portable video player in the world, but it is principally used to play video games. Satellite TV company Dish Network recently announced its own line of portable video devices with 2.2-, 4-, and 7-inch screens. "We've got the content," says Mark Cicero, a spokesman for the Dish Network. The company's PocketDISH, selling for between $329 and $599, can download shows directly off of television, by acting as a portable digital video recorder. That means PocketDISH can download "Desperate Housewives" for free, not $1.99, he points out. "We're changing the way people watch television," Mr. Cicero says. (Of course, the viewer must remember to record the show when it airs. With the iPod, viewers can buy the show later.)

Another disappointment: An hour-long TV show is expected to take as much as 30 minutes to download onto an iPod. That inconvenience could also slow sales.

Gaining additional rights to popular Hollywood programming will also be a hurdle for Apple. This week five entertainment industry unions that represent writers, actors, and directors said they would seek a share of any revenue produced from sales of TV shows on iPods. "We have to learn more about the actual technology," said Patric Verrone, president of Los Angeles-based Writers Guild of America, to the Associated Press. "I'm thrilled by the notion I can watch my shows in the palm of my hand, but I also want to make sure we are paid appropriately."

ABC network affiliates also expressed concern that iPod viewers might not watch the shows when broadcast, hurting their audiences. "I've already heard from some people; there's lots of questions. I'm sure everyone will be watching this very carefully," Deb McDermott, president of Young Broadcasting, owner of five ABC affiliate stations, told The Hollywood Reporter. "The question is making sure this doesn't impact the over-the-air business."

Apparently not foreseeing the concerns of affiliates and artists concerns are just another part of the "folly" of Mr. Jobs, Swann says. "The whole thing looks a little clumsy," he says. "A lot of arrogance."

But an even bigger embarrassment could be on the way. Brian Milburn, president of Solid Oak Software in Santa Barbara, Calif., which sells software that filters out objectionable content on the Internet, says he's certain video iPods will quickly become a favorite tool to download and view pornography. (A quick Internet search found at least one site that already gives detailed instructions on "How to Put Porn on Your iPod," though admittedly the instructions would work for other content as well.)

"A lot of adults are not going to be aware what these iPods can be used for when they buy them for their children," says Mr. Milburn, who owns four iPods himself.

His company will look for ways to create a content filter for iPod videos. "It's a challenge," he says, because most filter technology screens text, not images.

By Christmas, he predicts, the ability to download pornography "will be one of the main attractions for getting a video iPod.... These kind of technological advances can have a lot of unintended consequences for parents who want to get the latest and greatest for their kids."

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