Business/Economic Supplementary Material (Mike Fischer)

Though Apple is competing with different companies like Wal-Mart and BitTorrent in the online movie downloading market, many believe these competing companies do not have strong enough products to actually become a threat. The dismissal of Wal-Mart is quite simple. The first problem with Wal-Mart’s service is that if you can easily purchase the DVD of a movie you can put that file onto your computer much easier than it would be to wait until the movie was downloaded onto your computer. Secondly, people who want to watch a certain movie on an iPod don’t realize that Apple has protections to prevent movie files from being played that were not purchased through Apple. Finally, even if you have another media player like Zune, it takes forever to download movie files through Wal-Mart’s service. If you are lucky you might be able to get a movie in an hour or two, but it is not unlikely to have some movie take up to six or seven hours.

Similarly, BitTorrent has some problems with their service that will ultimately not allow them to compete with Apple. BitTorrent simply has protections on their files to really make them appeal to consumers. For example, buyers are not able to watch the downloaded movies on a TV and they limit the number of computers the particular DVDs can be played on.

However, just because BitTorrent and Wal-Mart do not have the ability to directly compete with iTunes, that does not mean there will never be an easy Internet movie downloading cite. In fact, in “Apple's P-to-P Movie Downloads To Eclipse Wal-Mart and BitTorrent”, we are given a simple outline of what iTunes provides that enables it’s customers to download movies easily. iTunes has a critical mass of users, it is very simple to use, it works with TVs and portable devices along with PCs, and it provides user accountability and billing.

References:

Howe, Carl. “Apple's P-to-P Movie Downloads To Eclipse Wal-Mart and BitTorrent”.
http://media.seekingalpha.com/article/21433. 2/28/07.
Singer, Michael. “Apple to Open Tiger”. http://www.internetnews.com/dev-news/article.php/3486261. 3/1/07.
Choi, David. “Online Piracy and the Emergence of New Business Models”. http://www.sbaer.uca.edu/research/sbi/2006/pdffiles/papers/cases/016.pdf. 3/3/07.