Small Screens, Smaller Audiences
Forbes 11/20/06

Small Screens, Smaller Audiences

Burlingame, Calif. -
Tiny screens abound, but consumers arenít watching--yet.

Thatís the status of the mobile video industry, according to an October 2006 study from Nielsen Media Research, which found that only 2.2% of files stored by users on Apple Computer's video iPods are actually videos.

Apple has been selling downloadable videos, as well as iPods with video capabilities, for more than a year. But it seems more focused on selling hardware than software. Chief Financial Officer Peter Oppenheimer said during the companyís fourth-quarter earnings call Oct. 18 that ď[Appleís] philosophy is to run [the iTunes] store a little bit over break-even.Ē Sales from the store were down about 1% from the third quarter to the fourth, bringing in just $452 million.

At a September event, Chief Executive Steve Jobs said 45 million videos had been purchased. The Walt Disney Co., which is the only Hollywood studio to sell full-length movies via iTunes, says it has distributed 500,000 films since September.
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