2008: iTunes Movie Rentals?

I've been saying for some time that Apple needs to offer iTunes Movie Rentals.  I am not the only one.

Recently, a college student noticed that with the release of iTunes 7.5, there are clues burried in the code that movie rentals may be coming soon. 

Related to this is the ongoing struggle with TV content and digital distribution.  Yet, despite the fears of the TV networks, viewing TV content online or via iPods and iPhones through iTunes, is not the cause of the decrease in TV viewership. 

There has been some hope that Movie Rentals would come before the holidays. 
While I would love to see movie rentals before the holidays, I don't
think will happen until January 2008 at the Macworld conference.  With the holiday shopping season due to kick off next week and the iPhone launch in France on November 29th, Apple will probably be quite content to sit on Movie Rentals until MacWorld. 

Of course, I could be wrong.  In just the past two weeks we've had a MacBook update without a press release and a significant upgrade to Final Cut Express with a simple press release.  Anyone who has been following Apple for some time knows that back in 2001 to early 2003 both of these would have been fuel for at least an "Apple Special Event". But, ever since the "MacWorld NY controversy",  Apple has announced products on its own time table and in a tiered manner - "low key" announcements (press release - generally speed bumps to existing products), "medium key" announcements (special events - usually at the Apple Town Hall or at industry functions), and "high visibility" (macworld, wwdc,  any special event held at Moscone).

So, why does this matter?  Well because Movie Rentals would have to fall into at least the "medium" category.  That would require at least an Apple Special Event which means that invitations would need to go out to the press.  In the past, Apple has given at least 2 weeks notice as to when these events would occur (sometimes more, and I believe, on one occasion, 1 week notice - but I could be wrong on that one).  But, I would argue that a Movie Rental announcement would be "high visibility".  With the holidays approaching any Apple Event would need to happen the first week in December (since, due to the Thanksgiving holiday, next week is out and Apple would not want to steal the thunder of the iPhone France launch on the 29th).

But, the next "high visibility" event is already on the calendar and only 8 weeks away - MWSF on January 15th.  So what's on tap for MWSF?  Well, the scuttlebutt says some sort of portable tablet.  And that's about it right now.  We know there'll be no OS X announcement since Leopard was just released.  Ditto for iLife and iWork.  The iPod line was just completely refreshed so that's probably a zero (with an outside chance of a storage bump/price cut). 

So what does that leave in Apple's product line to announce?  New displays?  Maybe, but that's been anticipated for a while (and still hasn't happened).  New iMacs? They were refreshed recently too.  MacPros?  Ok, well they are due for a refresh but, they are not really "consumer" machines and Apple likes to target Macworld with consumer products.  So, other than the ultra-portable and laptop line, the only thing that is due for a needed redesign is Apple TV.  How much sense would it make to announce Movie Rentals along with a new Apple TV with say, an integrated DVD player and maybe DVR capabilities?  (Yes, I know there's the iPhone, but I've gone on record already as saying iPhone 2 is not happening the first half of 2008). A lot of sense I think.

So, despite the speculation, I don't think we will see iTunes Movie Rentals until MWSF.  I expect that the iTunes portion of the keynote will include both Movie Rentals and the Beatles.  Until then, keep that Netflix subscription going. 

iTunes Needs Movie Rentals

With the exception of the iPod Shuffle, all of Apple's iPods and the iPhone support video playback. Yet, the movie and TV sections of the iTunes store have become stagnant with little new content. While iTunes has millions of songs for sale, it has less than 1,000 movies. The Apple TV, Apple's "hobby", appears to be going nowhere. Apple needs to do something soon to step up its video content market. But what? 

Well one of the things Apple seems to be doing is to go after short films. But this is not a viable long-term solution. Apple needs video content soon to help fill up all of those iPods and iPhones that will end up in stockings this Christmas. Many of those iPods are going to be replacing ones that can't play video. Come the end of January, unless Apple has something up its sleeve, people are going to start asking why there's no content. 

Apple's position seems to be that the iTunes movie and TV sections are still young:

“We’re really at the beginning stage in the movie space,” said Eddy Cue, Apple’s vice president for iTunes, adding that iTunes had sold more than four million movie downloads...but still had fewer than 1,000 titles for sale.

But this is simply not a reasonable argument when all of your products support video playback.

To further put the heat on Apple, the infamous NBC-Apple feud has apparently ended badly for Apple as talks between NBC-Universal have broken down. Thus, come December 1, all NBC shows, many of which are iTunes top sellers, will be pulled from iTunes.

Unlike the music business, Movie and TV producers seem to have Apple's number:

NBC Universal spokesman Cory Shields said his company's programs help drive the sales of iPods. "The iPod is only as good as the content on it," he said.

I suspect NBC's challenge to iTunes will eventually fail. Although (unlike the music business), NBC does not get any significant portion of its revenue from iTunes sales, it does get buzz among the people it most wants to attract with its shows. Not to offer it on the iTunes store is just foolish. But, the fact that NBC can even think it is possible to challenge Apple and the reason Apple's movie selection is so meager can probably be pinned on one person: David Porter of Wal-Mart. 

It seems Mr. Porter has clubbed the movie studios into submission in order to protect Wal-Mart's multi-billion dollars in DVD sales. As a result, digital movie sales are stuck in the mud with limited selection and insistence by the studios on high prices and ridiculous digital rights management (DRM) restrictions. 

But there may be a way out for Apple: Movie Rentals.

Apparently studios that had been reluctant to make their digital content available for sale through Apple are considerably more enthusiastic about video-on-demand (VOD) rentals because they wouldn't compete directly with Hollywood's own DVD sales operations.

There has been some speculation that Apple will soon be ready to roll out movie rentals. If true, then expect Movie rentals to be the main attraction at January's Macworld.