New video iPod's secret sauce?

From: David Carnoy
To: Steve Jobs
Re: Upcoming video iPod

Dear Steve:

Back in June 2003, I wrote imploring you to create a video iPod. Never heard back from you but was glad to see that you finally softened your anti-portable-video stance last year when Apple proudly delivered the iPod with video. What was amusing was how you kept telling everyone that you didn't think video on small devices made sense--then, suddenly, it did! For the record, I saw right through your little smoke screen about video on the iPod being a "suboptimal" experience. What you were really saying was that once you got it to be an acceptable experience, you'd put it out. And so you have.

Now, I've been itching to buy one of the iPods with video, but I decided to hold off because (a) I already own an iPod Photo and feel a little burned for buying it just a few months before the iPod with video came out for the same price, and (b) I know the iPod with video is really an interim product--a temporary stand-in for the real thing. Rumor has it that a "true" video iPod with a wide-screen display is coming out in the next month or so, and I'm waiting for that.

Speculation is that the new video iPod will have a 4-inch screen and possibly a virtual touch wheel. Bunk? Maybe. But any way you look at it, I'm betting the next-gen video iPod has to be a whole lot more appealing--for video, anyway--than the current iPod with video. For starters, the battery life should be better. I was hoping you'd get it up to four hours from the two that today's iPod with video offers. And who knows, if there really is a touch screen involved, maybe we'll see some additional PDA functionality. I wouldn't want to evoke the dreaded Newton, but its devoted followers are still pining for the equivalent of a Newton Mini.

Of course, as you've intimated all along, the hardware's only half the battle when it comes to portable entertainment. It has to be easy for the consumer to get media--whether it be music, photos, or videos--onto the device. You've also said that people want to own their media. The only problem is that I think people want to own their media but don't necessarily want to pay for it. I can't tell you how many friends ask me how they'd go about transferring songs from their friends' iPods to theirs. Even if I decline to answer, it doesn't take a genius to figure out how to input a few keywords into Google and get the answer.

You've obviously had some success selling songs on iTunes, though a billion songs sold sounds more impressive than what the actual profit numbers might otherwise indicate. As for the early numbers on selling TV episodes, they too seem pretty promising. But I think people are gradually coming to the conclusion that when it comes to music and movies in this fast-paced digital world with ever-changing formats and standards, buying to own really isn't the way to go. For example, I have almost 30GB of music on my hard drive at home, almost all of it ripped from store-bought CDs (the CDs continue to live in a Sony CD jukebox in my A/V rack). Having all that music on my iPod makes for a great portable jukebox that I can connect to my home stereo--or anyone else's home stereo. But the truth is, I'm kind of bored with my music and wish there were a way to get a nice selection of new tunes each month without paying a bundle (and yes, I still think 99 cents is too much to pay for a single).

I also have a pretty sweet DVD collection that I've built up over the years. It's stored in a hideaway cabinet in my living room and contains hundreds of discs. Sometimes I show the collection to friends, who seem impressed. But honestly, I rarely watch any of the movies; they just sit there, a few still in their cellophane. Some people say your DVD collection is a reflection of who you are. I used to sort of believe that. But now that I've moved on to Netflix, I sometimes forget I even have a collection.

The point I'm trying to make is that it's really time for Apple to move to a subscription service--both for music and video. Close to three years ago, I wrote:

"Moreover, despite the challenges of dealing with such large file sizes, downloadable video might ultimately prove to be a more lucrative and less complicated business model than downloadable music. After all, people are willing to rent movies--imagine a digital version of Netflix--rather than buy them."

I believe the same holds true today. And not that I ever like siding with the studios or anybody who's overzealous with copy-protection schemes, but they seem to prefer the rental/subscription model as well, especially when it comes to movies. Ideally, users would have the option of renting a title or buying it to own (I could see users wanting to own a handful of favorite flicks or Pixar-esque titles that they expect their kids to watch over and over). There are rumors you've been testing the waters with some market-research surveys, and you recently fired up a $9.95 subscription-based service for Comedy Central's The Daily Show and The Colbert Report. I'd like to see a whole Comedy Central package that includes a few other shows for that price. But it's a start.

Of course, I'm just one dude who owns three iPods. Others may feel differently. And that's why I'm asking CNET readers to weigh in on what they'd like to see in a new video iPod--and whether they'd prefer a subscription-based system for downloadable video. I'd be willing to pay $14.95 a month for that. I might even think about $24.95 if you threw in an all-you-can eat music subscription to boot.

Once that's taken care of, we can move on to the wireless Bluetooth headphones, the built-in Wi-Fi, and the satellite-radio options--but that's a matter for another fake letter.

What features would you like to see in a next-gen video iPod? And would you prefer to own your videos or rent them? And how much would you pay? Get your two cents in by clicking the TalkBack button now.