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From digital music to digital video

A study of the MP3 revolution and the future of online video

This is a small project I wrote as part of my ongoing studies for a MSc in IT at the IT University of Copenhagen in 2005.

It was written under the supervision of Peter Olaf Looms, external lecturer at the ITU and senior consultant at Danmarks Radio. Any errors and faulty conclusions are of course mine.

Following is the introduction and problem statement, the whole paper is available as a pdf (270 KB) and is published under a Creative Commons Attribution 2.5 License.

Introduction

There have been many interesting developments in our use of media and technology in the last few years, and evolution in this field just seems to speed up more and more. The combination of the MP3 format and the Internet appears to be permanently changing the way consumers approach music and the Apple iPod is changing how they listen to it. In the world of video and television changes on an even larger scale seem to be imminent with the emergence of digital television and as the options for broadband connections to the home open up.

These developments pose many questions. Is this simply a linear evolution from the days of the vinyl record and black and white television, or are the changes more dramatic than that? Is the iPod really changing our lifestyles or is it just a marketing ploy to sell us a new toy? Is it possible to predict how we will use the Internet to distribute video, based on the experience from music files? Is the Internet just a jungle without rules or are there business opportunities for sales of digital content in spite of content being available for free? Questions of this kind are the background for this paper, leading to the following problem statement.

Problem statement

In the last few years the combination of digitized music and increased use of the Internet has dramatically changed the way consumers acquire and use music (and other audio). What elements/characteristics of this "music revolution" can be described as most important from the end user perspective, and what can be deduced from these about the development of consumers´ use of digital video in the next few years?

More specifically I will try to answer the following questions:

• The Apple iPod has been called "the Walkman of the 21st century", is it possible to describe it as a direct descendant of the Sony Walkman or has some evolutional leap taken place?
• Can the fascination of having an iPod be rationally explained, and what elements are underlying the apparent affection of iPod owners towards their digital music player?
• What new opportunities are there for distributing music on the Internet that were not available before, and is there money to be made on music online despite peer-to-peer file sharing?
• What are the similarities and differences between a handheld device for playing music and one for playing video?
• What parallels can be drawn between the sharing and marketing of music online, and doing the same for video content?
• Is the handheld digital video player likely to become as popular as the MP3 player?

Methodology

This paper is based on desktop research of existing research and business literature, including news stories and press releases. An attempt is made to detect patterns and present a holistic description of the research area with focus on answering the questions presented in the problem statement.