Apple Taking On Movie Rental Industry
Posted: Tuesday, January 15, 2008
by Stephany Springer
Apple is attempting to turn another industry on its ear. The always innovative electronics company is taking on the movie rental business.
Steve Jobs announced today in his keynote address during MacWorld 2008 that beginning today movie rentals will be available through the iTunes Music Store. The movies will cost $3.99 for new releases and $2.99 for library titles. Renters will have 30 days to begin watching the movie and 24 hours once they begin before the download goes away. The deal is similar to how OnDemand works through cable and satellite companies.
Most of the major movie studios are on board, including Fox, Disney and Warner Brothers. It's not a surprising move since Apple has rarely been wrong recently as evidenced in the almost 20% market share they now hold in the Smartphone market with the iPhone.
Rumors are that Apple began working on the video rental model for two reasons. Their foray into movie sales was not a success. Even Jobs admitted that during his presentation today. And their video-to-TV gadget, the appleTV was not as successful as they had hoped. The availability of inexpensive movie rentals plus music and TV shows for sale directly through the appleTV should boost sales of the device. I've seen an appleTV and without the ability to access content directly from the internet limited its appeal greatly. The availability of HD movies will also enhance its appeal.
While I like the move toward video rental, I don't really understand the business model. Most rental companies are moving to a subscription-based service, similar to NetFlix. I don't doubt that Jobs and Apple know what they're doing, but charging per movie is a risk. We'll see if it pays off.
What do you think? would you be willing to rent a movie online and download it directly to your computer or other device, through iTunes, NetFlix or some other service? Or do you like having the actual disc in your hand when you leave the store or return from your mailbox?
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