This article discusses the Disney-Pixar merger and its implications for Apple and the future of online media delivery. As a result of the merger, Steve Jobs solidified himself as one of the most powerful executives in the continuing convergence of media content and online delivery, especially as movie studios now look to extend their digital reach.

Apple stands to benefit from the ability to distribute Disney’s animation studio’s content as well as its array of broadcast networks, namely ABC and ESPN. However, video media has been available online in the form of Pixar short films and more recently since the merger, Disney animated shorts.

As Jobs has already proved the viability of the online delivery of music, video-on-demand makes sense as the next step in rounding out the iTunes platform. By now gaining access to Disney’s video content, it makes developing the video on demand stage easier. Before, Apple was dependent on apprehensive third parties for content, specifically the record labels who doubted the viability of a legal download market. Apple needed large scale support because iTunes would only be successful if there was a large collection of downloadable music. In contrast, the dynamics of video on demand are different in that Apple can start with Disney and add more networks further down the road.

If Apple pursues the video content road, it will likely replicate its revenue model with online music. The majority of Apple’s money is made on sales of iPods, not on sales of legal downloads. Thus, Apple’s strategy was to drive consumer demand for its iPod devices through the access to digital music media. In this vein, Apple will most likely launch a new device, most probably a home entertainment center, to deliver its online video content.

Importance to Thesis:

This article helps support my third argument, which is that Apple has become the example of how media companies should adapt to technological change. By developing the preferred user interface for access to online media content, Apple has positioned itself not only as a technology company, but now as a major player in the media industry. Where 5 years ago Apple wasn’t even involved in media, it now controls the future of content delivery. Thus, by seeing the peer-to-peer phenomenon as an evolution in consumers demanding online media content (both music and video), Apple has put itself in the position to take advantage of the this technological evolution.