Will new iPod incite a video revolution?

Got a desire for "Desperate Housewives" while on the "L"? Then Apple Computer Inc. has something for you: a video version of its hot-selling portable digital music player.

But in unveiling its new video iPod on Wednesday, the company did more than show off its latest gadget. It also highlighted, in dramatic fashion, the seismic shifts taking place across the media spectrum. The days when what we hear or see is pre-determined by a static program schedule are going by the wayside.

Instead consumers, more than ever before, are firmly in control of their media, choosing content that is "liquid" and can flow through multiple devices.

But that freedom comes at a cost: $1.99 per video from Apple's iTunes site. That's a dollar more than Apple's highly successful music downloads--a business that reshaped the traditional music industry almost overnight.

"I think this is going to be a real ground-shifter," said Carl Goodman, director of digital media at the Museum of the Moving Image in New York. "It could completely alter the relationship consumers have with their video media. If you're talking about the DVD player or the VCR, those are toast. "

And that has huge implications for everything from television and advertising to movies and videos.

In fact the ABC television network wasted no time jumping aboard Apple's bandwagon. Episodes of the network's hit shows "Desperate Housewives" and "Lost" will be available for download the day after they air on television, Apple and ABC announced Wednesday.

"It's a huge deal," said Andrew Swinand, an executive vice president at Chicago-based Starcom USA, which buys advertising for several Fortune 500 companies. "It's the tipping point" for content.

"Consumers are demanding options," he said. "They're going to get the content in an environment that fits their schedule. So if I can TiVo it and watch it at home, or if I'm mobile and don't have that luxury, I'll get it in another format. If I watch it every week and I happen to miss it this week, I'll download it."

Although there are other portable video players on the market, the limited selection of programming available on the Internet, coupled with slow download times and complicated file formats, has kept them from widespread popularity.

Apple, which remade the music business by making high-quality digital files available on the Internet and offering seamless downloads to the iPod, now believes it can take the same route with video.

Apple noted that the iTunes store catalog has grown to 2 million songs since its launch in 2003. More than 600 million downloads have been recorded.

"We've gained a lot of credibility in the industry in the past 2 1/2 years with what we did with songs," said Eddy Cue, Apple's vice president of applications. "And that's what we're trying to mirror in the video space."

The new iPod, starting at $299 and available next week, will allow consumers to download thousands of music videos and other content.

"This is the first giant step in making content available to more people in more places more often," said Robert Iger, chief executive of The Walt Disney Co., which owns ABC. "It is the future as far as we're concerned."

Disney and ABC share a long relationship with Pixar Animation Studios Inc., which is also headed by Apple chief Steve Jobs and will offer short films via the iTunes store.

TV shows offered on iTunes will be free of advertisements. Other kinds of entertainment may soon be sold this way, too, analysts said.

"The TV deal is just the beginning," said Jim Grossman, who helps manage $63 billion and owns Apple shares at Thrivent Financial in Appleton, Wis.

With morning commuters catching the local news, friends sharing views about the latest videos around the water cooler and parents seeking to entertain children on long car rides, the iPod could help reshape the video landscape.

John Collins, a manager at Prosound car audio in Chicago, said Apple has sounded the death knell for the car DVD player, beloved by parents everywhere.

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Apple fans all agog over new video iPod

The telephones were ringing almost nonstop yesterday at the Apple Computer store in Shadyside. Consumers wanted the latest incarnation of the iPod, the new video version of the portable digital music player that's taken the world by storm.

Just a day earlier, Apple unveiled the much-anticipated video iPod, which now is available only online and won't show up in the stores for weeks.

"It's on my gift list," said Nate Huwar, 10, of Indiana Township, outside the store. He is one of Apple's increasingly broad audience, which takes in baby boom executives and stay-at-home moms along with their music-loving children.

Nate already has an earlier version of the iPod, which holds music he likes, such as the bands Green Day and AC/DC. He said he would enjoy downloading his favorite TV shows and videos as well.

"It's really neat," he said.

The introduction of the video iPods, which come in two versions selling for $299 to $399 and are capable of holding at a minimum 7,500 songs, 25,000 photos or 75 hours of video, coincided with Apple's agreement with Walt Disney Co. that will let users download commercial-free TV shows offered by Disney's ABC network, including the popular "Desperate Housewives" and "Lost."

The video player is the latest iteration of popular iPod technology that has helped to transform Apple from an also-ran computer maker into a cutting-edge entertainment and communications giant that is one of the world's biggest sellers of digital music. Some observers even can see a day when the iPod acts as an all-in-one entertainment system.

Fueled by record sales of the iPod and strong back-to-school computer sales, Apple this week reported record fourth-quarter earnings that surged more than 300 percent to $430 million on sales of $3.68 million, and annual earnings of $1.335 billion on sales of $13.93 billion. Both the quarterly and annual sales and profit figures were the highest in the history of the company that started the personal computer revolution.

"Apple has scored a huge home run with the whole iPod product line," said Bill Pearce, a former marketing executive who has done work with Apple and now chairs the marketing department at La Roche College in McCandless.

Mr. Pearce expects the new video player to change the movie and television industries much as Apple's online iTunes music store -- which allows users to download songs for 99 cents a pop -- is helping to change the way the music industry reaches consumers.

Imagine, he said, what similar technology could do to the neighborhood video store. The current deal with Disney allows iPod video users to pick only among five ABC commercial-free shows, a day after they are broadcast, for $1.99 per episode. It also allows users to select from some 2,000 music videos from various bands at the same price.

"You're looking at the front end of a whole new delivery system," said Mr. Pearce, who envisions businesses video-conferencing as well as movie fans carrying film libraries in their pockets that can be watched on the go or shown with adapters on larger TV screens.

"I would buy one tomorrow if I thought I could download 'West Wing.' I'm a 'West Wing' fanatic," said Mr. Pearce, who is working on making his courses available for iPod users. "What this does is it opens up media on demand, personalized media, if you want to look at it like that."

But unlike the Apple's previous iPod models, the iPod video will have to demonstrate whether or not if it has the universal appeal of its music players.

Apple's latest version of its music player, the small and sleek iPod Nano, was an instant bestseller because it combined just about everything that previous versions lacked.

Carrying the storage space of its larger forbears, it's small enough to be held during exercise. The color screen and Apple's signature easy-to-use software and generally accessible price tag ensured it's success.

Mr. Jobs was confident that the video player will enjoy similar success. "Because millions of people around he world will buy this new iPod to play music, it will quickly become the most popular portable video player in history," he said.

Avowed Apple-lover Oscar Huber, 39, of Pittsburgh, isn't sold. He loves music, not videos, and said he doesn't figure he needs to upgrade to Apple's latest darling.

"I'm not much of a TV person," he said. "I'm happy with what I have."

And while Mr. Jobs told reporters on Wednesday that he is convinced the people will buy the iPods because they are "the best digital music players in the world," what really matters is if the consumer public agrees.

Dr. Jim Sequin, professor of communications at Robert Morris University, thinks consumers will buy them. He imagines kids using them to watch comic book animation and travelers cooped up in airports or on municipal buses turning to videos just as they now tune into iPods, CD players and portable FM tuners.

"I think it's an idea whose time has come," said Dr. Sequin. "I think it's going to be a huge success."

Clearly, the buzz surrounding the iPod and Apple generally is welcomed by the folks at the Cupertino, Calif., company, which despite its pioneering status and Mr. Jobs' reputation was by the mid-1990s, a seeming has-been lost in the shadow of software behemoth Microsoft and a flood of cheaper Windows-based PC knock-offs.

But the iPod -- and a jazzed-up computer lineup led by the colorful iMac that Mr. Jobs introduced shortly after he came back in 1997 to run the company -- has helped to change all that. The pocket-sized jukebox single-handedly transformed Mr. Jobs and Apple into comeback kids, leading the charge to land consumer entertainment into the palm of your hand.

"I think Apple sees themselves as a communications and lifestyle facilitator more than just a computer company," said Kurt Schimmel, a marketing professor at Robert Morris University.

Students view the iPod in all its various forms as an extension of the computer, he said. They already use computers to e-mail their friends and family around the country and as a storage place for their music and video collections.

"This is just an extension of that, providing the consumer with a portable service that is based on the technology they already had," Dr. Schimmel said.

Apple is an example of successful companies that are introducing new products more oriented toward what consumers want rather than just evolving existing technologies, said Peter Boatwright, co-author of the book, "The Design of Things To Come."

"You might have thought of them pre-iPod as Apple computer and lo and behold, they didn't bring out the next computer, they brought out something [else] that consumers wanted," said Dr. Boatwright, an associate professor of marketing at Carnegie Mellon University.

"They are transforming not just Apple, but the iPods have really helped people recognize a better definition of innovation. It is not about advanced technology, but increasing consumer value.

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