Wired: Apple Reinvents the Film Download Business – What it Means For Everyone from MovieBank to the Major Studios

by Michael D. Sellers Here it is. We knew this was coming. It’s unclear yet whether this is a breakthrough opportunity or a threat to us here at MovieBAnk, but whatever it is — it’s news and it gives a big boost to internet downloads as a concept whose time has come. Apple’s entry, and its deals with all the major studios, is very signifcant.  We’ll be analyzing and have some comments soon. Hang on ….   By Eliot Van Buskirk 01.15.08 | 3:30 PM WiredApple CEO Steve Jobs announces the new iTunes movie rental service.Apple is about to turn the movie rentals business on its ear.The new iTunes movie rentals service, announced Tuesday by Apple CEO Steve Jobs during his Macworld Expo keynote, is powered by deals with all the major film studios and stands to reinvent the way people rent and watch movies, analysts say.”They really nailed it,” Jupiter Research Vice President and Research Director Michael Gartenberg said of Apple’s move into movie rentals. “This is going to be extremely disruptive, doing for movies what the iTunes music store did for music.”The new service will let anyone with iTunes or an iPod rent DVD-quality movies with stereo sound for $3 ($4 for new releases). HD movies with 5.1-channel sound cost a dollar more. The “completely reinvented” Apple TV — sporting an upgraded user interface at a lower price — allows viewers to place orders from their couches. Unlike Amazon Unbox, which doesn’t allow movies to play until they are totally downloaded (generally taking a matter of hours), Apple’s new service allows movies to begin just seconds after an order is placed.Gartenberg said he sees Apple’s online movie distribution plan as a likely success due to the ease and flexibility of Apple’s content/hardware ecosystem, as well as Jobs’ ability to strike deals with the movie industry where other manufacturers have failed.Jobs changed the music business forever when he unveiled the iTunes Store in 2003, and he hopes to do the same for movies. This is a massive market: The Digital Entertainment Group says rentals and sales of DVD discs in the United States totaled $23.4 billion in 2007. As movie rentals and sales migrate online, the stakes are high. Someone will win big, and that winner could be Apple, despite some stiff competition.Apple says it plans to add more than 1,000 films by next month; the company will likely continue scrambling to increase its catalog. Apple’s ability to add films quickly will be crucial to its success in this area, because when people decide they want to see something, they’ll search for it where they know it is available — not where it might possibly be in stock.If you’re a consumer, are you thinking about buying HD-DVD or Blu-ray, or are you thinking of going through iTunes, renting the stuff you want and linking with the rest of the iTunes ecosystem?” Gartenberg said. ” Over the longer term, this is going to be very important.”With iTunes movie rentals, customers can view rented movies on their iPod, iPhone, computer or television, and the service can be used without a computer, since Apple TV can now download videos on its own. Once a title has been downloaded, the renter has up to 30 days to watch it. Movies expire 24 hours after being played for the first time.In order for consumers to add another box to their entertainment systems — even a box as nicely designed as the upgraded Apple TV – they need one that combines the convenience of on-demand cable with the breadth of Netflix. Jobs, who has run out of charm as far as certain record labels are concerned, will need to keep the movie studios on board long enough for the Apple TV to catch on. Certainly, 1,000 titles from all the major studios — including 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer, Lionsgate and New Line Cinema — is a great start.Even though the studios have granted Apple the wide, deep licensing it needs to succeed, Jobs won’t be able to dominate online movies the way he has music. The iTunes music store launched into a vacuum; no other e-tailer had previously succeeded in signing deals with all the major labels. But these days, movies are distributed online not only by Amazon Unbox, Netflix and Movielink, but by massive cable companies and retail giants.

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