iPod Video A Dismal Failure

Written by David Richards     20/11/2006 | 20:13 | Category: PORTABLE DEVICE ISSUES

The iPod video seems to have been a dismal failure as a video player with consumers buying the large screen iPod to listen to music.

The iPod video seems to have been a dismal failure as a video player with consumers buying the large screen iPod to listen to music.

Following a major study in the USA during October Nielsen, Research came to the conclusion that    owners of Apple's Video iPod spend far more time on it listening to music or audio podcasts than they do using it to watch TV or movies.

The iPod research conducted by Nielsen, which is owned by VNU Group, parent company of The Hollywood Reporter, is the first publicly available independently published data on consumption habits for the device. Nielsen monitored a panel of 400 iPod users in the U.S. from October 1-27 as part of its new initiative, Anywhere Anytime Media Measurement, or A2M2, which aims to measure audiences on myriad emerging digital platforms.

Among the findings: Less than 1% of content items played by iPod users on either iTunes or the device itself were videos. Among video iPod users, that percentage barely improves, up to 2.2%.

Even measured by duration of consumption, where 30- or 60-minute TV shows might seem to have a built-in advantage over three-minute songs, video comprises just 2% of total time spent using iPods or iTunes among iPod owners. Video iPod users consume video 11% of the time.

The study also found that 15.8% of iPod users have played a video on either iPod or iTunes. About one-third of that group doesn't own a video iPod.

Nielsen's "Home Tech Report," a separate ongoing tracking of new technologies, projects about 13% of U.S. households own at least one iPod, amounting to about 15 million -- 30% of which are video-enabled iPods. By Apple's own count, nearly 70 million iPods have been sold to date.

"To a great extent, that number is driven almost entirely by people looking to play audio," said Paul Lindstrom, senior vp custom research at Nielsen. "The real question in many ways becomes, What is the next wave?"

Nielsen declined requests to provide additional data from the study, which is believed to have also tracked consumption of specific titles. But what few figures could be obtained from the study seem to suggest that despite iPod's upgrade to video capabilities in October 2005, the device is still mainly used as an audio device.

The data could raise some profound questions about assumptions made regarding consumer behavior; specifically, whether mobile devices can truly encourage a mass audience to adopt mobile video consumption after generations of generally homebound, large-screen viewing habits.

 

Nielsen's take on video consumption is highly subject to interpretation. Worst-case scenario: The panel is an early indication that TV and movies have limited appeal on iPods. Best-case scenario: While adoption of video may be proceeding more slowly than the hype suggests, there is tremendous upside ahead. Either way, the results will be of interest to a media world intent on migrating video to wireless hand-helds, whether portable media players like Microsoft's new Zune or mobile phone market entrants like Verizon's VCast.

 

Nielsen's numbers are being examined closely by its clients, though looking at a snapshot of such a nascent market is like predicting what a baby will look like as an adult by scrutinizing a sonogram.

 

"It has big implications, but to a certain extent what you're looking at is the tip of the iceberg," Lindstrom cautions, noting that the panel will establish a baseline snapshot of the market that will be continually updated for years to come. A second panel is expected by year's end with a larger sample.

Apple, which declined comment, has been relatively tight-lipped about iPod usage with the exception of select statistics: The most current count pegs sales at 1.5 billion songs and 45 million videos (derived in part from 250 series from 40 networks). In its most recent earnings call, the Walt Disney Co. noted that about 500,000 movies have been sold in the two months since the company became the only major studio to strike a film-output deal (for 100 titles).

To some degree, a higher volume of music is to be expected: Users could conceivably listen to a favorite song hundreds of times, while it is unlikely that a TV episode would be viewed more than a handful of times. In addition, many iPod music playlists incorporate MP3 files collected from outside sources long before the iPod came around, while videos aren't as commonly collected and much less likely to come from outside the iTunes system.

But the dominance of music even by the time-spent standard is somewhat more puzzling given the average video file's duration dwarfs that of an audio file. That said, not all audio files are music -- podcasts can be as lengthy as a movie -- and even in musical form, songs are often digested in preset modes that generate countless plays.

Apple and its content partners may not necessarily be expecting video to go gangbusters. Is it possible that they have intentionally structured the business model for iTunes videos to be a fairly limited market, given that nearly all of the programming is essentially library fare because only in rare instances is a program made available online before its initial release so as not to interfere with the primary window.

Putting a price on video content also could be serving as an impediment to sales given the growing volume of free, advertising-based programming available online. That, too, could be intentional: iTunes is typically one of many digital platforms that content companies are experimenting with using a variety of business models.

 

Given the significant proportion of video viewing done on iTunes by users lacking video iPods, Nielsen expects to adjust future monitoring to account for users who don't own any form of iPod but use iTunes. Although the initial panel only observed 400 people, Lindstrom defended the amount as a valid sample. "We could double or quadruple that, but the bottom line is that's not going to change the story," he said.

 

However, Lindstrom acknowledged that the panel did experience technical problems with Nielsen's software that monitored iPod usage, resulting in some incomplete data. In addition, one subset of the panel, which was outsourced to another company, was characterized by Lindstrom as lacking an optimal cross section of iPod users. But while he acknowledged that Nielsen's initial iPod research is not as rigorous a sample audience as the one it assembles for television measurement, he did say the research could offer early insights to iPod usage.

 

"There is broad-stroke information you can get pretty reliably from this data," he said.