Link This | Email this | Blog This | Comments (0)

Apple's Rental Cart
January 8, 2008

Despite his penchant for the theatrical, Apple CEO Steve Jobs may not have all his studios in a row in time for MacWorld Conference & Expo next week to unveil his master plan to organize Hollywood under the iTunes digital tent.

While Jobs is expected to unveil iTunes movie rentals with 20th Century Fox at the annual event, BusinessWeek reports that Jobs is still hammering out agreements with several other major studios. A major sticking point is holding up the process.

Jobs wants the titles on iTunes available for download and rental on the same day and date as their physical DVD release, which usually precedes pay per view and electronic rental by a 30-day window. To gain the concession, Jobs may agree to pay higher wholesale prices than he would like, closer to the $17 paid for physical DVDs by Wal-Mart and other retailers.

Warner Bros. already allows some movie downloads to be offered day and date with DVD release through Microsoft's Xbox video service, according to BusinessWeek. But Disney, of which Jobs is the biggest single shareholder, and which is the only studio to allow new movies to be sold through iTunes, is said to have balked at allowing day and date downloads of its movies.

Citing unnamed sources, BusinessWeek reports that Apple is close to sales and rental agreements with Warner Bros. and Paramount. Lionsgate may agree to rental, while Sony may agree to sell movies on iTunes.

Currently, iTunes sells recently released movies from Disney (DIS) for $14.99 and older titles from studios such as Lionsgate for $9.99. Businessweek reports that Apple plans to charge $3.99 for 24-hour rentals.

Getting more movie titles to iTunes would invigorate its digital movie service, which account for a fraction of the iTunes business. At last count, Apple has sold 2 million movies, 100 million TV shows and more than 1 billion songs.

Movie rental and sell through would also boost sales of iPod video players and Apple TV, which plays iTunes content on digital television sets. Currently, Apple TV streams content to the TV from a computer. Its sales have lagged. Poor audio and visual quality, lack of content and the inability to browse and download video content directly from a TV -- are all issues that will have to be addressed.

Posted by Ned Randolph on January 8, 2008 | Comments (0)