New IPods Debut And A Marketing Medium, Too - InformationWeek

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2/23/2005
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New IPods Debut And A Marketing Medium, Too

The boom in Apple Computer's portable audio devices is fueling a new way to get your message out, the podcast.

Apple Computer on Wednesday refreshed its iPod mini and iPod photo lineup, offering lower prices and more storage capacity.

Two new iPod mini models are available: a 4-Gbyte model priced at $199 and a 6-Gbyte model for $249. Two new iPod photo models were also released: a 30-Gbyte model ($349) and a 60-Gbyte model ($449).

More than 10 million iPods have been sold since the product's introduction in October 2001. Nearly half of those sales occurred during Apple's fiscal 2005 first quarter, which ended Dec. 25. Despite the efforts of competitors including Creative Labs, Dell, Gateway, Microsoft, Rio, Samsung, and Sony, the iPod remains the best-selling digital music player in the world. Apple's iTunes Music Store is the leading online music vendor, with 70% market share.

A recent phone survey of 2,201 people conducted by the Pew Internet & American Life Project found that 11% of adults, an estimated 22 million Americans, own an iPod or other MP3 player. Teens, a sizable demographic for such devices, weren't included in the survey.

The success of the iPod and the iTunes software that drives it has created a whole new channel for audio content delivery known as "podcasting." A podcast is simply an audio file made available by a podcaster. Using software such as iPodder, listeners can subscribe to podcasts and have the audio files downloaded to their iPods, just as an RSS reader polls sites that publish RSS feeds.

"Podcasting is just the audio extension to blogs," says Royal Farros, CEO of MessageCast Inc., a software company that makes real-time messaging tools. "Or maybe the other way to say it is, podcasting is the audio extension of TiVo." TiVo is a digital video recorder touted for its ability to save and serve video content to accommodate the device owner's schedule.

MessageCast on Tuesday updated its free LiveMessage alert service so podcasters can alert listeners when a podcast has been released. Farros considers podcasting to be as significant for audio delivery and consumption as the VCR was for video. "Podcasting is even more important than TiVo," he says, "because there was no equivalent service before it."

But, not everyone believes podcasting is the next big thing. "We're a long way from calling it a medium," says Josh Bernoff, an analyst with technology market research firm Forrester Research. "I think we'd have to call it a curiosity at this point. It's probably going to be years before this form of distribution makes a difference to people."

Others are more optimistic. "Podcasting is quite fascinating as a new communications medium," says Tim Bajarin, president of technology consulting firm Creative Strategies. "And it is very clear that at some point, podcasting, not only on an iPod but on other mobile audio devices, could catch on."

The next step, Bajarin believes, is aggregation. "The second phase is audio aggregators," he says. He describes these as similar to Bloglines.com, a site purchased earlier this month by Ask Jeeves Inc. that aggregates blog news feeds. "That's where I'd see the first level of advertising," he explains. "An aggregator would be the redirector for these audiocasts and would have advertising connected to that."

There are already many sites doing just that, notably iPodder.org, PodcastAlley.com, and Podcast.net. One of the more ambitious in terms of commercializing the medium is the Podcast Network, based in Australia, which debuted last week.

"We don't see podcasting as 'revolution,' but simply as an 'evolution,'" writes co-founder Cameron Reilly via E-mail. "Podcasting is a viable commercial medium because it has the same characteristics of more traditional mediums such as radio but with the added benefits of time-shifting, portability, user control, and global coverage."

The Podcast Network will carry three kinds of commercials in its shows: sponsorships, interstitials, and advertorials. Lengths will vary from short interstitials (5- to 10-second ads in the middle of a show) to longer sponsorships of 30-second ads at the beginning and end of the shows. Advertorials will be 10- to 45-minute interviews with product vendors.

"As analysts, all of us are watching podcasting pretty closely because it does represent another new digital medium," Bajarin says. "But again, this is not something that's ready for the mass market."

Just don't tell the mass-market advertisers. Heineken has been making a podcast available for months through www.heinekenmusic.com, a promotional site offering a mix of music and marketing. Volvo is sponsoring a podcast at Autoblog.com, and Gatorade another at Enduranceradio.com.

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