Apple Unleashes the Video iPod Disney to Sell ABC TV Shows On iTunes

Groundbreaking Deal with Desperate Housewives, Lost and More Prime Series

Steve Jobs with Apple's new video iPod.

San Jose, CA – Apple Computer head Steve Jobs and Walt Disney Co. CEO, Robert Iger made history together Wednesday, unveiling the groundbreaking video iPod and announcing that key Disney television shows will be offered as $1.99 downloads via Apple's iTunes Store.

The Apple-Disney initiative gives viewers an unprecedented opportunity to stay connected to their favorite programs, and watch the shows again at their convenience. Consumers can watch TV show downloads on their personal computers as well as their video iPods.

Iger said that this is the "first giant step" in making programs available to "more people, in more places." TV shows on the menu will include ABC's hit Emmy-winners Desperate Housewives and Lost, and newcomer Night Stalker. Popular Disney Channel series That's So Raven and The Suite Life of Zack and Cody will also be available at iTunes.

New episodes of the network programs will be available one day after broadcast.  Consumers can download past shows anytime. "It's never before been done, where you can buy hit prime-time TV shows the day after they're broadcast," Jobs observed. "This is a real breakthrough."

The fifth-generation iPod plays video and can house up to 75 hours of programming.

While the deal does make some Pixar shorts available, Jobs and Iger clearly expressed that this an Apple-Disney partnership—not a Pixar studios deal.

A rift between longtime Walt Disney chief Michael Eisner and Jobs chilled the relationship between Disney and Pixar to a degree where Job's Pixar studios—who delivered such hits for Disney as Toy Story and The Incredibles—said last year they would not renew their distribution deal with Disney.

Wednesday's announcement, marking Disney as the first media company to step up and distribute network programming via iTunes, signals that newly-installed Disney CEO Iger is clearly interested dispelling the bad blood that developed between his organization and Jobs.

Though too early to rock-solidly predict a renewed Disney-Pixar pact, Iger did say the iTunes deal and video iPod release are "just the beginning" of what they believe will be a "long and prosperous relationship between Apple and Disney."

Bigger Screen, Thinner iPod—75 Hours of Video

This latest incarnation of the iPod gives viewers a sharp picture on a larger, 2.5" color screen. At $299, the 30-gigabyte model can hold 75 hours of video, 25,000 photos or 7,500 songs. A 60-gigabyte video iPod will also be on deck for $399 when they hit sales floors in the next week or so. These versions replace iPod's current 20-gigabyte model, are notably thinner, and can be bought in white or black.

Analysts note that while some consumers may find the screen too small for watching an entire feature-length movie, significant segments of the market—namely the X and Y generations— are going to "eat this up."  These consumers are used to consuming media on small screens of hand-held games, mobile phones and so forth, according to digital media analyst Ben Bajarin of Northern California consulting firm Creative Strategies.

With over 84% of the domestic legal music download market already in its hand, Bajarin noted that this new Disney partnership makes Apple the "digital distribution pioneer for content providers to make money where they've never made money before."

Other television networks will most definitely tune in to see if, and how strongly, viewers flock to iTunes to buy ABC and Disney shows.

- J.Bolden