Apple hints at video rentals through iTunes

[AppleInsider]

Apple Inc. strayed from making any material announcements during its shareholders meeting on Thursday, but did hint that it will offer video rentals through iTunes at some point in the future.

"Timing of this is difficult to determine, but we would expect [iTunes video rentals] sometime in 2008," said PiperJaffray analyst Gene Munster, who attended the shareholder gathering in Apple's hometown of Cupertino, Calif.

No stock split

In a note to clients, Munster noted that an Apple stock split is looking less likely in the near term. "We do not expect a stock split in the next several months (previously we were expecting the company would split the stock)," he wrote. "Apple may be adopting a more Google-like approach (i.e., not-splitting shares and allowing the stock price to move out of historical ranges)."

No iPhone delay

Another key takeaway from the meeting, according to the analyst, was that the company's iPhone remains on track to ship next month. "There have been some rumors suggesting that the iPhone could be delayed," he explained. "Chief executive Steve Jobs confirmed iPhone will be in the market next month (June)."

AT&T won't buy out your existing cell contract

In one final tidbit, Munster noted that non-AT&T subscribers will need to make the move to the wireless carrier on their own if they seek an iPhone.

"The company indicated that Apple and/or AT&T will not 'buy-out' non-AT&T subscribers that are looking to purchase an iPhone, but are currently tied to a contract with another carrier (this is as expected)."

[ View this article at AppleInsider.com ]

[iPoster]

INCONCEIVABLE!!

Actually, that would be a GTI (Good Thing Indeed!), if it's HD, or at least full DVD quality content, and works with the AppleTV. (which I don't doubt it would)

[crees!]

Originally Posted by AppleInsider

Munster noted that an Apple stock splut is looking less likely in the near term.

[DaveGee]

Originally Posted by AppleInsider

"Chief executive Steve Jobs confirmed iPhone will be in the market next month (June)."

Glancing at the calendar... what's the last day of June again?

[DaveGee]

Originally Posted by iPoster

Illegal aliens aren't doing jobs Americans won't do...they're doing jobs Americans won't do without a decent wage and benefits.

So then I guess you'd be willing to pay 5 bucks for an ear of corn & 3.65 for a slice of watermelon this summer?!?!

[Ireland]

Originally Posted by crees!

[SpamSandwich]

I've never been more in favor of rentals than now.

[JupiterOne]

Originally Posted by iPoster

Actually, that would be a GTI (Good Thing Indeed!)...

I agree.

[SpamSandwich]

Quick note... there's a FREE demo of Ms. Pac-Man on iTunes games right now. Download it before it disappears!

[Dazabrit]

Video Rentals + Touchscreen WiFi iPod + Video Rentals = I'm actually in Heaven!

[BlackSummerNight]

I'm wondering if they plan on doing a iPod upgrade like this anytime soon. I for one, would pass on the iPhone if I could get a touchscreen iPod.

Originally Posted by Dazabrit

Video Rentals + Touchscreen WiFi iPod + Video Rentals = I'm actually in Heaven!

[ITFinanceGuy]

My wife and I have been waiting for rentals, especially for newer releases. I just hope they don't actually take until 2008 for them to launch. I can't wait to get an ATV 2.0 and be able to download rentals for these various shows. I would imagine they are looking to up them to HD as well, which will really leave Blockbuster and Netflix fighting an uphill battle.

-----------------
www.ITFinanceGuy.com

[Porchland]

The header says Apple hinted at movie rentals, but the story says an analyst projects it. Those are not the same thing.

[JCG]

Originally Posted by Porchland

The header says Apple hinted at movie rentals, but the story says an analyst projects it. Those are not the same thing.

From Mac Rumors, also on MacWorld:

"When a shareholder asked Jobs for high-definition video content on iTunes and asked if his Apple TV could allow him to rent movies, the CEO smiled. 'One never knows,' he said cryptically."

The comment came in reference to a shareholders comment, the speculation (from the analyst) is that he was referring to rentals and not just HD content and the timeframe that Apple could launch a rental service. Take it with a grain of salt, we all know that HD content is coming sooner or later and that Apple could probably make a lot of money as well as add a lot of value to the Apple TV by adding a rental service. I would buy one today if they had a rental service and I'm sure that a lot of other people would as well.

[EruIthildur]

Originally Posted by BlackSummerNight

I'm wondering if they plan on doing a iPod upgrade like this anytime soon. I for one, would pass on the iPhone if I could get a touchscreen iPod.

So smart Apple won't put out that iPod yet... In hopes you will double-buy on an impulse. :P

[JavaCowboy]

Blockbuster charged me around CDN$5 for movie rentals. I can keep the DVD for two days if it's a new release, or a week if it's an older release. It's a huge scam because sometimes the DVD is damaged enough that I can't watch entire sections of the movie. Needless to say, I don't rent movies at Blockbuster anymore.

Seeing as many DVD's are below CDN$10, they'd better not charge 5 bucks for a two day rental, otherwise, I'll just go out and buy the DVD. For a self-destructing DRM'd movie file that has a chance of failure, they'd better not charge more than 2 bucks. It had better be viewable on FrontRow and the AppleTV, and be as convenient as possible.

Only then would I make pay for the service.

[Bageljoey]

Originally Posted by JavaCowboy

For a self-destructing DRM'd movie file that has a chance of failure, they'd better not charge more than 2 bucks.

I can't see higher quality movies going for $2. Even self destructing DRMed things. I personally think $4 would be the sweet spot for me, but we'll see...I'm not holding my breath!

[iPoster]

Originally Posted by DaveGee

So then I guess you'd be willing to pay 5 bucks for an ear of corn & 3.65 for a slice of watermelon this summer?!?!

Wrong thread!
Edit - Time for a new sig anyway!

[@homenow]

Originally Posted by Bageljoey

I can't see higher quality movies going for $2. Even self destructing DRMed things. I personally think $4 would be the sweet spot for me, but we'll see...I'm not holding my breath!

going rate for a rental through a brick and mortar store is $2-$3.50 per movie. Online rental services have a subscription for between $10-20/month. For online delivery one would expect a price on par to better than those prices. $2/movie or $10-$20 a month. Depending on the deal for a monthly fee service they might be able to get away with $30/month, but on a per movie basis $3 for a new release is about as much as they could charge and be competitive.

[heaven or las vegas]

Originally Posted by @homenow

going rate for a rental through a brick and mortar store is $2-$3.50 per movie.

Here in the Boulder-Denver metro area, we have redbox rentals which are $1 per night (due back the next day by 7 pm). You can walk-up or check inventory on-line, rent online and then pick up later that day at a redbox (which are located outside McDonald's or inside some Walmart's).

Totally cheap and easy.

[Bageljoey]

Originally Posted by @homenow

going rate for a rental through a brick and mortar store is $2-$3.50 per movie. Online rental services have a subscription for between $10-20/month. For online delivery one would expect a price on par to better than those prices. $2/movie or $10-$20 a month. Depending on the deal for a monthly fee service they might be able to get away with $30/month, but on a per movie basis $3 for a new release is about as much as they could charge and be competitive.

Maybe so. And that would be nice.

But I wonder about the bandwidth/infrastructure costs for delivering these higher quality movies. Everyone wants true DVD quality if not some sort of HD. Apple, meanwhile can barely scratch a profit with $1 songs that are, what, .1% as big? .01%? I know, I know--it is all about the hardware sales. But they cannot get hosed on the rental...

And what will drive the studios to agree to super low prices? I wonder what they get for a movie sale from ITS right now? Right now you have gobs of people buying DVDs for $10-20 in stores and some paying %10 through ITS. Sure you can rent Netflicks or drive to blockbuster but both of those require a wait or pre-planning. I imagine that if people can get $2-3 high quality rentals on demand without budging from the couch DVD sales (download and physical) would be in great peril. I'm sure that thought makes studio bean counters' bloods run cold.

Sure--instant download on demand of any movie is coming; there is no doubt it is the future. But I can't see it beeing so cheap just yet...

[@homenow]

Originally Posted by Bageljoey

...what will drive the studios to agree to super low prices? I wonder what they get for a movie sale from ITS right now? Right now you have gobs of people buying DVDs for $10-20 in stores and some paying %10 through ITS. Sure you can rent Netflicks or drive to blockbuster but both of those require a wait or pre-planning. I imagine that if people can get $2-3 high quality rentals on demand without budging from the couch DVD sales (download and physical) would be in great peril. I'm sure that thought makes studio bean counters' bloods run cold.

The thing that will get the studios to agree is the money, copy protection, and savings over the cost of producing DVDs. DVD sales and rentals coexist, even within the same store, today very well, and the will in an online distribution model as well. I'm sure that the studios are making money off of Blockbuster rentals, and they would on an iTMS model as well.

Apple will need to have the storage space for the movie file one way or another, so that is paid for. Rentals will add to that revenue, or in the case of a subscription model such as NetFlix Apple gets a steady monthly income to help pay the bills. The only thing to work out is the price and amount of additional infrastructure that will allow Apple to maintain the same profit margin for themselves and the studios as they have for movie sales. Also, lets face it, Apple does a lot less advertising for iTMS than Blockbuster and NetFlix and they would have need of less "Physical" space for their business as well as fewer employees so they should be able to match or beat their pricing models. At the high end of the price scale they would at least have to come in lower than the cable companies do for their ondemand services.

[caliminius]

iTunes movie rentals and (potentially) TV show rentals might actually get me interested in buying an AppleTV. Sure I could use Handbrake or other programs to rip my DVD's for AppleTV, but that has always struck me as sort of pointless with the DVD player still sitting there next to the TV anyway. I ripped one movie with Handbrake and it took about as long to rip the video as it would have taken to watch the movie. Multiply that by all the DVD's I already own and it could easily take until all of my non-work time until the end of the year to rip all of them (not to mention several hundred dollars in external hard drives to store them). Much more practical to just skip the whole ripping process and buy a bigger shelf unit to hold my DVD's.

Can anyone answer this question for me: If you purchase a video from iTunes, can you start watching it immediately (or virtually immediately) on the AppleTV or does it need to be completely downloaded before the AppleTV can start playing it? For rentals, I see it being necessary for them to be bought directly from the AppleTV and quickly playable on the AppleTV as well. If I have to wait an hour or more to watch a movie I rented, I'm just as well off going to Blockbuster or wherever and renting the DVD. And if there is that kind of delay, Apple needs to follow the Amazon Unbox methodology and allow remote purchases over the internet to be directly downloaded to the AppleTV for viewing.

[@homenow]

Originally Posted by caliminius

Can anyone answer this question for me: If you purchase a video from iTunes, can you start watching it immediately (or virtually immediately) on the AppleTV or does it need to be completely downloaded before the AppleTV can start playing it? For rentals, I see it being necessary for them to be bought directly from the AppleTV and quickly playable on the AppleTV as well. If I have to wait an hour or more to watch a movie I rented, I'm just as well off going to Blockbuster or wherever and renting the DVD. And if there is that kind of delay, Apple needs to follow the Amazon Unbox methodology and allow remote purchases over the internet to be directly downloaded to the AppleTV for viewing.

I think the answer is no, at least right now. Apple does have streaming capabilities built into Apple TV and uses them for movie previews and to stream video from iTunes, but at the moment you cannot buy a movie via the iTMS on your computer and start watching it on your Apple TV immediately. That could change as the distribution model changes.

[Porchland]

Originally Posted by JCG

From Mac Rumors, also on MacWorld:

The comment came in reference to a shareholders comment, the speculation (from the analyst) is that he was referring to rentals and not just HD content and the timeframe that Apple could launch a rental service. Take it with a grain of salt, we all know that HD content is coming sooner or later and that Apple could probably make a lot of money as well as add a lot of value to the Apple TV by adding a rental service. I would buy one today if they had a rental service and I'm sure that a lot of other people would as well.

Thanks for filling in the blanks. As usual, AI only half-reported it.

[JCG]

Originally Posted by Porchland

Thanks for filling in the blanks. As usual, AI only half-reported it.

I think that the exact quotes took a while to get on the web and AI was just reporting what the analyst told them. Hopefully the smile was about some form of alternate to purchasing video content and not just about 720p content becoming available on iTMS. I think that for Apple TV to really make a dent in the market they need more options than there currently are by October at the latest, possibly with a hardware update by then as well. If they ink some kind of deal to link to the networks "advertised" streams as well as some news sources then it really does start to become an alternative to Cable and DVD. Whether this is realistic in the near future or not I don't know, I think there could be some major streaming lags with todays technology.

[Robre]

Originally Posted by Porchland

The header says Apple hinted at movie rentals, but the story says an analyst projects it. Those are not the same thing.

I was at the meeting. When the question was asked about video rentals, Steve Jobs responded with "You never know what's coming." That's all he said. My interpretation - AppleTV 2.0...