Wednesday, January 06, 2010

Watch Ads and Earn...

Apple received a bit of media attention recently for a patent that describes hardware-based verification that somebody has watched an ad on their computer or mobile device. There was some speculation at the time that the goal might be to give away free hardware, with users watching ads in order to keep (for example) a free iPod or iPhone unlocked and working. Then Apple acquired a music streaming service - ten cent songs. Then it acquired Quattro Wireless, a firm specializing in mobile ads.

Some have speculated that Apple may use its aforementioned patent to offer free or steeply discounted hardware, requiring people to watch ads to keep it unlocked. That's possible, sure, but I am not betting on it. I don't think it's much fun to have to keep unlocking your hardware, nor do I think it's particularly sensible to give away hundreds of dollars of hardware in the hope that people will actually watch ads as opposed to dumping it in a drawer, while also diminishing any sense of exclusivity among those who have (and would continue to) pay for the same hardware without the ads.

I suspect that what we're going to see is a set of products aimed at people who might otherwise be inclined to get their music through unlicensed sources. Rather than trying to find an mp3 file online or through P2P services, they can watch an ad on their iPhone or iPod to get access to the song, or possibly even access to a streamed library of music otherwise available by subscription. Advertisers are happy because the demographic they're targeting can be confirmed to be watching their ads. Record company executives are happy because they get more revenue. Apple is happy because it sells more hardware to people interested in 'free music' - and those customers are happy because, although they have to watch ads from time to time to access everything they want, they don't pay anything out-of-pocket. Meanwhile the very broad patent language warns other manufacturers (such as you known who) that they aren't allowed to implement the same feature on their products.

And for people who are happy with the status quo, nothing changes.

Then again, based upon my track record of trying to anticipate moves by Steve Jobs, I'm probably completely wrong. ;-)

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