Is Apple about to take on the video market?
Published: 21 Jul 2005 17:35 BST
The chipmaker also has built a digital home in Santa Monica, California, that showcases the latest in home entertainment technology.
"We want to show studio heads the state of the digital home and how digital-rights management works," Corbett says. "If somebody had shown this to the music industry six years ago, they might have been more proactive against piracy."
Hurdles remain, however. Apple created a digital-rights management technology called FairPlay when it launched iTunes three years ago. But FairPlay hasn't withstood attacks by computer hackers. "It took them roughly a day to crack it," one studio executive says of FairPlay.
While movie studios remain sceptical about copy-restriction technology, making enough money from movie downloads is the bigger concern, Corbett says. Profits from movie downloads, a business dominated by small companies such as CinemaNow and Movielink, are scant.
In addition, subscription-based movie downloads are limited because existing agreements between the studios and HBO, Showtime and Starz have locked up most of the Internet rights.
But don't underestimate Jobs, whose iPod took people by surprise and now accounts for one-third of Apple's sales. Years from now, a video service could make Apple more like Sony — a consumer-electronics giant that pipes digital music, music videos and movies into the living room or iPod-like devices.
"For the first time since the Mac," Homer says, "Apple has created an opportunity to reinvent their business well beyond PCs."
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