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Apple to announce movie rental download program weeks after Wal-Mart cancels similar service for lack of consumer interest

Movie fans know going to the movie store isn’t always convenient and late fees are a pain.  So why haven't downloadable movie rentals caught on yet?  Even the infamous Enron had plans to produce infrastructure for video-on-demand libraries as early as 2000.

With the recent demise of Wal-mart's downloadable services, the time might be ripe for new blood. According to the Associated Press Apple will announce the new movie rental service next month that will work on top of its iTunes infrastructure.

The new service is not to be confused with existing movie and TV downloads on iTunes.  The new service would increase content several times over, with titles from several different studios.

Apple has a much stronger user base for its iTunes service, which allowed Apple to attract its first major movie studio for the rental deal -- Twentieth Century Fox. Apple also agreed to license Fox its copy-protection scheme FairPlay, already built into Fox movie releases. This will allow Fox DVD films to be transferred to computers and iPods for playback.

For many movie fans the real viability for download services like this comes in the price per movie. If Apple can provide fast downloads of first run movies at a price within a few dollars of what the same film rents for in stores, the service should be a hit. However, if Apple and Fox price the download rentals too high the vast majority of movie fans will continue to make the trek to the movie store.

Rumors that Apple was considering a movie rental service surfaced in June of 2007. At that time the rumored price was $2.99 for a 30-day rental of a movie via digital download. If Apple offers new releases at that price the program would likely be very successful.
 
Wal-Mart recently nixed plans for its download movie program after it failed to meet expectations. This cancellation left those who had bought digital movies from Wal-Mart’s service hanging. The flicks can be viewed after the service was shut down on December 21, 2007, but they cannot be transferred to another PC.

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Several reasons this will fail.
By Mitch101 on 12/28/2007 6:10:55 PM , Rating: 4
I dont watch movies on a PC. Come on kids crowd around the computer doesn't work.

I cant imagine video output with the Apple Ipod will do a movie justice. I don't think I could sit through a movie on an iPod.

Its seems like a step back to the black and white era. We take movies from the big screen and now think that watching them on a 2.5-3.5" screen does any justice to the movie? No thanks.

I would much rather get an X-Box 360 or PS3 for downloadable movies that can do HD output and is made for my HDTV.

Even if the comparison were of a movie in DVD quality the 360 and PS3 were made for the living room. I'm not sure enough Apple TV units were even sold to make any difference to standard definition.

I hope Fox is smart enough to make deals with other video download distributors.




RE: Several reasons this will fail.
By Some1ne on 12/28/2007 6:29:38 PM , Rating: 3
Much as I hope this will fail (or at least, Apple's version of it, as I don't see any reason why the concept of downloadable movie rentals itself should fail), I don't think it will be for any of the reasons you list. First off, as the article states:

quote:
This will allow Fox DVD films to be transferred to computers and ipods for playback.


...Apple isn't trying to force users to watch movies on tiny little ipod screens. Second, while people may not gather around a PC to watch a movie, getting a PC to play movies on a standard TV is typically about as simple as hooking up the S-video cable that came with your video card. Just because the movie is played on the PC, it doesn't mean that the PC can't render it on a more "conventional" movie-watching device.

Despite that, I do hope Apple's service flops, if only because I can't stand Apple due to their tendency to put sexy wrappers around proprietary platforms and then sell them (at a premium, no less) to people who aren't educated enough to understand exactly what the implications of that proprietary platform would be if it were ever to achieve a dominant position in the marketplace. Some real reasons why it might fail could be DRM restrictions being too strict (which was the problem with Walmart's system), or that it seems to be following a defunct pricing model ($3 per movie to rent a title for a month).

I think the first successful movie-download service will be the one that follows a more Netflix-like pricing model, where users pay something like $15/month and can download as many movies as they like, provided that they only have no more than 3 (or however many their specific plan allows) on their PC at the same time.


RE: Several reasons this will fail.
By MADAOO7 on 12/28/07, Rating: 0
RE: Several reasons this will fail.
By Some1ne on 12/28/2007 7:02:43 PM , Rating: 3
quote:
I think that's a pretty ignorant and narrow minded view of what Apple does.


Yes, because you cut my statement off in mid-sentence when you quoted it.

quote:
To say that people are dumb for purchasing an Apple because the sum of it's parts isn't priced the same as a Dell is just ridiculous.


Yes, it is, but I never said that. I said/implied that people who purchase Apple products (and I'm not talking just about their PC's) generally:

1. Do not know or care about the potential implications for the industry if a proprietary platform ever achieves a dominant market position.
2. Purchase the product as much for image/status/sexiness as anything else.

...and that Apple:

1. Deliberately puts attractive wrappers around proprietary junk to create an image to sell to people because they wouldn't otherwise bother to buy Apple's proprietary junk (and I'm not saying that it's not a good busniess tactic...it obviously is working quite well for Apple).
2. Charges what is essentially a "sexiness markup" on their products, because they know people will pay it anyways.


RE: Several reasons this will fail.
By MADAOO7 on 12/28/2007 7:27:39 PM , Rating: 3
Ok, I got you now. It's a valid point.


RE: Several reasons this will fail.
By ebakke on 12/28/2007 11:40:51 PM , Rating: 2
I still feel as though your frustration is directed at the wrong people. It seems you are (or maybe, should be) irritated with the consumers, and not the company. After all, the company is just doing what the (majority of) consumers want.


RE: Several reasons this will fail.
By doctat on 12/29/2007 1:57:23 AM , Rating: 1
while i'm no apple fanboy (i dislike macs for purely technical reasons), i don't think your arguments hold much water, and are a guise for covering up some sort of fanboyism of your own.

quote:
1. Do not know or care about the potential implications for the industry if a proprietary platform ever achieves a dominant market position.


what, like ms windows, sun solaris, hp hpux, ibm aix, etc. etc? apple is pretty much just operating a business like the rest of the planet, but doing a much better job of it.

apple coming up with the ipod/itunes combo is what i would call innovation. you can call it 'proprietary', but it's no different than anything else that ms, sony, hp, sun, or a thousand other companies are doing. are we truely worse off now as a species, than we were 20 years ago before apple released these major industry changing products to the world somehow?

quote:
2. Purchase the product as much for image/status/sexiness as anything else.


i suspect most people (rabid mac fanatics aside) buy apple stuff because it actually is better, vs. just because it has an apple sticker on it.

i think most of the planet would agree that apple has the best portable music player platform out there. apple hardware is generally top notch, their OS is OK (some people will argue that it's better than anything out there, and for them, it probably is), and apple has led the market in getting music, tv and now movies into people's hands at completely reasonable prices.

quote:
Deliberately puts attractive wrappers around proprietary junk to create an image to sell to people because they wouldn't otherwise bother to buy Apple's proprietary junk


what, like sony, microsoft, sun, ferarri, virgin, or any of the other million 'premium' vendors do? i'm curious who you think the other 'non-proprietary' businesses are that are out there, coming up with the same quality product, that people should be buying from?

quote:
2. Charges what is essentially a "sexiness markup" on their products, because they know people will pay it anyways.


i'd argue that apple charges a markup, in order to actually -put- some sexiness into their products, and to advance the status quo, and develop new markets. they're no different than any other company that vends premium quality products.

some people are hip to buying no-name white box stuff from wal-mart, and others would prefer a more advanced, shinier, premium quality product, and don't mind paying a couple extra bucks for it.


RE: Several reasons this will fail.
By Some1ne on 12/29/2007 2:55:32 AM , Rating: 2
quote:
i don't think your arguments hold much water, and are a guise for covering up some sort of fanboyism of your own.


Depends on what you consider to be "fanboyism". I don't support any specific team or side, I just very much dislike Apple, though I make no attempts to cover up that personal bias.

quote:
what, like ms windows, sun solaris, hp hpux, ibm aix, etc. etc? apple is pretty much just operating a business like the rest of the planet, but doing a much better job of it.


The difference I see with Apple is that not only is the software proprietary (which I agree is par for the course, and not something to worry about), but so is the hardware on which it runs. You cannot go out and buy a copy of MacOS and then run it on any system you choose (from an "official" point of view anyways, I know that third parties have released hacked versions of MacOS that can run on any platform, but they are far from being sanctioned by Apple)...you *have* to run MacOS on hardware that is purchased from Apple. It's like if Microsoft were to say "you can only run Windows on PC's that are purchased from Microsoft", and in my opinion this is a dangerous approach (from the perspective of the industry) if it ever gains too much traction (can you imagine how awful it would be if Microsoft *did* only allow Windows to run on PC's purchased through MS, and charged an extra premium for said PC's? People would either be forced to pay MS's inflated prices, or to undertake potentially even more costly migrations to alternative platforms).

quote:
apple coming up with the ipod/itunes combo is what i would call innovation.


I wouldn't. An effective way to grow and maintain a userbase for iTunes, sure, and perhaps an "innovation" from an Apple marketing standpoint, but it's certainly not the good kind of innovation (which benefits the public at least as much as it benefits Apple). Many users (myself included) would prefer to have filesystem-style drag and drop support for managing an ipod playlist, and while there are third-party apps that enable this, there's no official support for it from Apple. I'm sure they could easily provide it, while at the same time maintaining the exact same compatibility with iTunes, but they don't because doing so could weaken their userbase, and obviously (at Apple at least) giving consumers what they want takes a backseat to maximizing the software userbase. Again, it's the same pattern of trying to tie a hardware and software platform together, even when there's no technical need to do so. I just think the potential implications are dangerous over the long-term.

quote:
what, like sony, microsoft, sun, ferarri, virgin, or any of the other million 'premium' vendors do?


I think my point was more that Apple puts so much focus into the image associated with their products specifically to appeal to people who will buy something solely/primarily for the image that comes with it, and in order to sidestep people with concerns about their tendency of trying to lock together hardware and software platforms in a highly exclusive way like they do.

There's nothing wrong with making a sexy product, but when you're making a product sexy on the outside specifically to conceal the rotten platform underneath, it smacks at least a little bit of dishonesty/deception, at least to me.


By retrospooty on 12/29/2007 12:43:30 PM , Rating: 5
"quote:
tendency to put sexy wrappers around proprietary platforms and then sell them (at a premium, no less) to people who aren't educated enough

I think that's a pretty ignorant and narrow minded view of what Apple does"

Thats pretty much exactly what Apple does.


RE: Several reasons this will fail.
By herrdoktor330 on 12/28/2007 11:29:39 PM , Rating: 2
I'd like to add a note to this conversation; Apple does have the AppleTV appliance which streams content from whatever you have in iTunes. I don't know how many of those they sold. But if they have a good installed base of them, they could put content on a person's tv with no problem.

Anyone out there know how well the AppleTV sold? That should give us a clue as to how well this could do based on the installed base of that appliance (that didn't hack it and put linux or whotnot on it).


RE: Several reasons this will fail.
By Doormat on 12/29/2007 12:12:05 AM , Rating: 2
Not very well at all.

I think Apple will take a two pronged approach to this problem of movie rentals on your TV - one is the AppleTV and the second is to let you load movies onto your iPod Touch and then use the component TV out cable plus a dock to play it on your TV. The AppleTV model is good for people who are going to watch a lot of rented movies. The iPod Touch model will be good for those who want to occasionally watch movies on their TV.


RE: Several reasons this will fail.
By othercents on 12/28/2007 6:41:52 PM , Rating: 2
quote:
I dont watch movies on a PC. Come on kids crowd around the computer doesn't work.

Really I'm sure kids crowded around my computer which is connected to a 52" plasma TV would be just fine. I actually watch all TV using the computer TV Tuner and utilize the TV recording features of Media Center. I welcome downloads which will be closer to instant gratification without having to drive to the Movie Rental place.

Granted you can always get them for free, but wouldn't that be unethical?

Other


RE: Several reasons this will fail.
By Chaser on 12/28/2007 6:52:53 PM , Rating: 3
And how many mass consumers, enough to make downloadable movies succeed are using Media Center connected to a 52 inch Plasma?


RE: Several reasons this will fail.
By bigboxes on 12/28/2007 7:10:42 PM , Rating: 2
quote:
And how many mass consumers, enough to make downloadable movies succeed are using Media Center connected to a 52 inch Plasma?


One.


RE: Several reasons this will fail.
By anotherdude on 12/28/2007 9:14:14 PM , Rating: 2
Ditto.

I got fabulous output from my Nvidia 8800 to my HDTV and surround sound too, but I know I'm one in a million. Not even my other geek friends are doing this. Too many steps, too many parts, for your average Joe who can't even hook up his HDTV to a cable box. And families are not going to gather round the PC, not even with a 32" High Def monitor

I see a much better chance for the xbox 360 model here.I'd love to see it too, being an xbox owner.


RE: Several reasons this will fail.
By Shlong on 12/29/2007 1:43:33 PM , Rating: 2
It's not really that difficult, all you need is a dual DVI video card (most are these days). A DVI to HDMI cable (cheap on monoprice). And a Stereo to RCA Audio cable (cheap on monoprice). You just go to control panel and either use clone or dualview & your set. For surround sound it varies depending on how you want to set it up.


RE: Several reasons this will fail.
By bigboxes on 12/29/2007 5:09:49 PM , Rating: 2
Yeah, it's really not too difficult... for the geeks on here. For the everyday consumer has problems setting his VCR clock let alone set up a HDTV or HTPC. I built my own HTPC this last year, hard wired it to a gigabit network (internet and file server), added a RF keyboard and arcade quality joystick, DVI out to tv, and digital audio out to my Denon. Now, this obviously doesn't phase many on here, but 95% of the public would get a headache just reading the above.


RE: Several reasons this will fail.
By bangmal on 12/29/07, Rating: 0
RE: Several reasons this will fail.
By Shlong on 12/29/2007 1:39:09 PM , Rating: 2
I don't like watching movies on my PC (with 22" monitor). However, I get around this by buying a DVI (back of video card) to HDMI (input on TV) cable along with stereo out (back of sound card) to RCA converter (red & white to TV). After running some filters on FFDShow & upconverting the image, it looks great on a 46" LCD screen.


RE: Several reasons this will fail.
By afkrotch on 12/31/2007 11:13:34 AM , Rating: 2
Get a TV that has a DVI connection. From there, all you need is a nice set of 7.1 speakers to connect up to your computer.


RE: Several reasons this will fail.
By afkrotch on 12/31/2007 11:02:45 AM , Rating: 2
quote:
I dont watch movies on a PC. Come on kids crowd around the computer doesn't work.

I cant imagine video output with the Apple Ipod will do a movie justice. I don't think I could sit through a movie on an iPod.

Its seems like a step back to the black and white era. We take movies from the big screen and now think that watching them on a 2.5-3.5" screen does any justice to the movie? No thanks.

I would much rather get an X-Box 360 or PS3 for downloadable movies that can do HD output and is made for my HDTV.

Even if the comparison were of a movie in DVD quality the 360 and PS3 were made for the living room. I'm not sure enough Apple TV units were even sold to make any difference to standard definition.

I hope Fox is smart enough to make deals with other video download distributors.


Watching videos on a portable 2.5 to 3.5" screen is a step back to black and white? Huh? What portable devices did we have before PMPs? I remember those big honking like 10" CRT TVs that took like 4-8 D cell batteries and were only black and white. All they would do is pick up airwaves.

Also sounds like someone doesn't know much about computers and what they can do. I can tell you, a computer is more capable than your 360 or PS3.

http://www.newegg.com/Product/Product.aspx?Item=N8...

Then connect your computer up to a nice TV. HD on your TV in blu-ray, hd-dvd, download, or any format that you feel like. Computer has been HD well before anyone even used the term HD.

A computer is designed by whoever built the computer. You can build it for office work, gaming, multimedia, whatever. You aren't locked down into anything, when you decide to build your computer.

I personally don't have my comp connected to my TV. I use a 21" LCD as the monitor and my HDTV is only 26". Just my PS3 and 360 are connected onto the TV. My monitor didn't have the inputs needed for either consoles. I'll make sure that my next monitor has them.


The main reason it will fail
By FITCamaro on 12/28/2007 7:14:00 PM , Rating: 3
Netflix and Blockbuster. Who wants to pay $3 or more to watch a single movie for up to 30 days when you can play $15 and get 3 movies at a time. Even if you only got new movies once a week (i can get up to 9 a week) that still 12 movies a month. Or a $1.30 a movie. And thats DVD, HD-DVD, or Bluray. But some crappy quality download that Apple is likely to provide.




RE: The main reason it will fail
By anotherdude on 12/28/2007 9:19:09 PM , Rating: 2
Netflix is great but its lacking one thing - instant gratification. And that's a big enough thing to leave the door open for another way. Plus, you pay the monthly if you rent or not.

I think the future is clearly going to be:

1. Turn on your TV
2. Play

Or as close as we can get to it.


RE: The main reason it will fail
By Some1ne on 12/28/2007 11:29:07 PM , Rating: 2
quote:
I think the future is clearly going to be:

1. Turn on your TV
2. Play


They have that already, it's called On Demand. The problem is that for most titles, you still have to pay per view/rental (typically $3 to $5 depending upon the title). It would be great if I could just pay an extra $15 on my cable bill every month for unlimited access to On Demand, but unfortunately they don't do it that way (yet).


RE: The main reason it will fail
By gradoman on 12/29/2007 7:08:30 AM , Rating: 2
Tried the iTunes service once, got two movies and was quite disappointed there were no subtitles or closed-captions for hard of hearing folks.

Wasn't worth the gift card that I didn't pay for nor the time I spent actually finding those movies, since I couldn't enjoy them with my girlfriend. If all there content is going to be like that, well, screw that.


The key is movies that are in the theaters...
By Webreviews on 12/28/2007 11:07:16 PM , Rating: 2
... not the old second run stuff I can get from the video store, Netflix, fIOs on-demand, or from my grandma.

I want to be able to pay money to watch a first run movie, one that is in the theater without having to find a baby-sitter and traipse down to cineplex garage.

I am willing to pay real money for a in-release movie. For example, I really would pay right now to see Book of Secrets on my TV (or MacMini attached to my TV) but I don't care enough to make the effort to go down to the movie theater to see it. If I could rent it right now, I'd see it. So that is revenue that could be captured right there.




By gplracer on 12/28/2007 11:22:19 PM , Rating: 2
I do not think i would download a movie from apple unless it came in 5.1 surround and was the same video quality as a dvd or hd dvd or blue ray dvd. I use Blockbuster and i get 3 movies at a time for $17.95 a month. I can return them to the store down the street and get three more while i am waiting for the next three to come in. I agree that the market for people who watch movies on their computer is very small. I have a 24" monitor but i would rather watch movies on my 65" tv with surround sound instead as would most other people. Will these movies be encoded in dolby digital or DTS? Also there is comcast and other services to compete with. I can get a lot of first run dvd rentals on comcast on demand in HD. There is a market for this product but it is really small so it better be real good and hit all of the customers who would use the service.


Let me do what I want with my media!
By josebl on 12/29/2007 1:04:32 AM , Rating: 2
I think the real question is letting people do what they want with their media. Do we buy the media or the package it comes on? Well, in the court of public opinion that's been decided. Users feel they buy the media. I don’t think that’s going to change. If Publishers (movies, music, even book publishers with e-books) continue to disagree with this they stand to be sorely disappointed. Case in point PSPs and UMD.

I think Apple's system is a step in the right direction -maybe no more so than Movielink, CinemaNow, or Unbox. The only thing keeping pirates from moving full quality HD content across the net is bandwidth (OK, it IS happening but it’s a pain!). The 1) bandwidth, 2) device infrastructure, and 3) most importantly buying habits might not be in place to make online media delivery an instant, mainstream smash hit TODAY, but I’m confident that it will someday, say within 10 years?. Why not, erm, uh, well, “train” consumers to get online media legitimately today, so that when technology catches up we choose legitimate media sources out of habit.

I’ll say it again, we want to do what we want with our media! We’re going to. If you want to make money off it, make a system that makes sense.

P.S. I’m no Alan Greenspan, but I bet it makes more long term financial sense to invest in designing reasonable media delivery rather than paying lawyers…

P.P.S. Also, please stop only offering your crummiest content for online download!

P.P.P.S. I won't even get into the "barriers to entry" argument here!




Apple TV
By mbene14 on 12/29/2007 8:24:48 AM , Rating: 2
This movie rental service has to be tied to an expansion (software) of capabilities of the Apple TV service. I know people will say that no of them have sold (>600k in actuality) but maybe this will move some more.

I bought one when they bumped the hd to 160gb. It was a HUGE hit over the holidays. Family photos on display, xmas music at instant recall (plus a few quick downloads for tunes we didnt have), and watching movies that had been downloaded or Handbraked to it.

Adding a rental service to it would make this a real viable mass market product. I do think that the other studios will freak though and try to fight this by looking for competitors like Netflix and Amazon. They dont want the same thing happening to video that happened to music. What was that? Oh yeah! Apple gave all the file sharers a viable alternative and the Music companies made some money instead of none. The only thing stopping mass rampant video piracy is the bandwidth to do so is still fairly marginal for most people. If you could pull down a feature length production from one of 20 sites in 2 minutes...

I know lots will say "I dont need to pay Apple to get content to my TV I can do it via (insert random approach)". Often you get what you pay for, and I have to say installation was slick especially not having to have wires running from my office to the family room.

I am sure I will get crucified on these boards, as the rabid anti-Apple sentiment knows no bounds (although always couched as impartiality), but have fun and let fly.




apple
By harsaphes on 12/29/2007 10:46:31 AM , Rating: 2
My PC is connected to my 50 inch plasma so we have been watching Itunes and Amazon downloads for awhile now..I for one am looking forward to this.




By mondo1234 on 12/29/2007 12:40:09 PM , Rating: 2
That alone is a big reason why this failed. You needed WM in order just to play it and it the movies could not be transfered to another player. At least with this (Apples) you can move the content to your Ipod or play it on a Windows box with quicktime. I think this has more flexability than with the Walmart solution. Atleast apple has crossplatform solutions. MS limits the transferability with the Zune software or the now discontinued Plays Fore Sure....




movies are not ready for online.
By pomaikai on 12/30/2007 12:51:41 AM , Rating: 2
The quality of playing a video from ipod on TV is pathetic. Streaming video from a PC to a TV is not main stream enough. Walmart tried this and jumped ship. Video online will not take off until we start seeing streaming media players at a reasonable price that can read all the standard WMV, DIVX, XVID, etc. Very few people have a PC dedicated to the TV. I know several people who would purchase a combo streaming media/dvd player if they were user friendly and around $100. Until this happens all attempts at online rentals will fail.

Hopefully apple will not use proprietary DRM like they do on itunes. They will never suceed if there rentals can only be viewed on an apple product or with apple software.




By boobot on 1/15/2008 3:25:41 PM , Rating: 2
Newsflash
By Gholam on 12/29/2007 2:48:04 AM , Rating: 1
There already are two hugely successful online movie distribution systems: BitTorrent and Overnet. Among their strong points, in addition to huge catalogs, fast releases, and no DRM, is accessibility from any country in the world - not just USA. Let's see Apple match that.




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