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Disney Does Well through iTunes, But…

Chuck Salter of takes an extensive look at the results of Disney/ABC’s deal with Apple’s iTunes, and Disney’s post-Eisner doings in general.

Breaking ground on iTunes was a risky strategy, one that could have alienated advertisers and local affiliates. "It wasn’t something you expected Disney to be the first to do, given its historically conservative operating principles," says James McQuivey, a principal analyst with Forrester Research. "But what that did was set off a chain reaction that leads all the way to Wal-Mart selling TV shows and movies online, and NBC and News Corp. announcing they’re starting a new video site." (Disney was also the first studio to sell movies on iTunes.)

The extensive article is a must for anyone interested in the big picture.  On the flip side is Kenneth Li, who cites a study that says iTunes and similar businesses will peak this year as more advertising-supported distribution methods distribute programming.

Sales of movies and television shows are expected to almost triple from an estimated $US98 million ($118 million) last year to $US279 million in 2007. But unless the consumers begin paying for their online video en masse, growth in sales is likely to peter out next year, according to Forrester Research.
"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They’re already coming," said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a "dead end".

"Free is going to win," Mr McQuivey said.

According to this piece, is undermining iTunes.

Led by, US TV networks including News Corporation (publisher of AustralianIT) ‘s Fox are offering some hit shows online for free.

News and NBC Universal also launched a joint venture to distribute a combined archive of shows over the internet.