Thursday, July 20, 2006
Think Secret: Apple to Announce iTunes Movie Rentals
Posted by Jason Dunn in "NEWS" @ 03:34 PM
"With three weeks until Apple's Worldwide Developers Conference, Think Secret has learned exclusively that CEO Steve Jobs will use his keynote address to announce the debut of movie rentals through the iTunes Music Store. While the announcement will undoubtedly be billed as a further extension of iTunes' dominance in digital media downloads, it represents a coup for the movie industry, which will have succeeded in standing its ground against Apple's pressures to offer consumers the option of owning movie downloads. Apple is said to have ironed out agreements with Walt Disney, Universal Studios, Paramount Pictures, and Warner Bros., and is currently in talks with other major movie studios as well. It's unknown to what extent content will be available come the August 7 announcement, or whether Apple will announce all of its studio deals at that time."
We've heard rumours about this for some time, but it looks like it's finally happening. I believe Apple will likely execute on this well enough: they've done a good job with iTunes and because it will likely be a part of iTunes, there are millions of people who already know how to use it. The real question for me though is the pricing: Apple has long dismissed the idea of a subscription-based music system, and the 1+ billion songs sold so far are a strong indicator that most people want to own their music. Although with Apple's DRM'd music, the term "own" is rife with irony. At any rate, one could argue that the inverse is true with videos: people are more apt to rent, or subscribe to a DVD rental service such as Netflix, then to buy DVDs (though certainly millions of DVDs are sold every year).
The question becomes, then, how will Apple price this system? Will it be only rentals, or will there be an option to buy & burn? I use Zip.ca, a Canadian version of Nexflix, and I really enjoy it - I can rent 11 DVDs per month for $24.95 + tax, which comes out to $2.40 per DVD as my hard cost. So when I have to pay $5+ at Blockbuster for a DVD rental, I feel like it's too expensive. Apple is charging $1.99 for 45 minute TV shows, but you get to keep those and watch them as much as you want. If they charge $2.99 for a movie rental that you can keep for 72 hours or something similar, I think they could really shake up the industry. Questions, questions. Any speculation on what their price point will be, and how it will all work?
We've heard rumours about this for some time, but it looks like it's finally happening. I believe Apple will likely execute on this well enough: they've done a good job with iTunes and because it will likely be a part of iTunes, there are millions of people who already know how to use it. The real question for me though is the pricing: Apple has long dismissed the idea of a subscription-based music system, and the 1+ billion songs sold so far are a strong indicator that most people want to own their music. Although with Apple's DRM'd music, the term "own" is rife with irony. At any rate, one could argue that the inverse is true with videos: people are more apt to rent, or subscribe to a DVD rental service such as Netflix, then to buy DVDs (though certainly millions of DVDs are sold every year).
The question becomes, then, how will Apple price this system? Will it be only rentals, or will there be an option to buy & burn? I use Zip.ca, a Canadian version of Nexflix, and I really enjoy it - I can rent 11 DVDs per month for $24.95 + tax, which comes out to $2.40 per DVD as my hard cost. So when I have to pay $5+ at Blockbuster for a DVD rental, I feel like it's too expensive. Apple is charging $1.99 for 45 minute TV shows, but you get to keep those and watch them as much as you want. If they charge $2.99 for a movie rental that you can keep for 72 hours or something similar, I think they could really shake up the industry. Questions, questions. Any speculation on what their price point will be, and how it will all work?
