Report: Apple, Fox sign movie rental deal for Macworld

[AppleInsider]

Apple is likely to use Macworld as the venue for an announcement which will see 20th Century Fox license its movies for an iTunes on-demand rental service, according to an article by the Financial Times.

The report -- which cites only a "person familiar with the situation" -- alleges that the deal will follow the pattern of similar rental services, which allow users to download a complete copy of the movie that only lasts for a set amount of time before it becomes unplayable.

As an exchange, Fox DVDs will include a copy protected version of the movie that can be transferred to a computer and, ultimately, an iPhone or iPod. This will help users watch the movies in portable form without having to break the DVD's copy protection, which occupies a legal gray area, the Times says.

No mention is made of whether either the rentals or DVD copies will sport enhanced quality. Apple has not increased the resolution of videos on iTunes since fall 2006, when it began selling videos at NTSC television resolution (640x480) or lower. Viewers have complained that image quality suffers when viewed on HDTV sets and that the iPod maker is underusing the Apple TV, which can play back video at an HD-grade 720p (1280x720) resolution.

Other studios are said to be in talks for similar deals, but may not strike their agreements in time for Macworld's mid-January keynote speech.

Regardless of the output quality, the business model is expected to help drive sales of Apple hardware due to the lower cost to watch videos. It will "help Apple sell a load more video iPods," a studio executive has purportedly told the paper.

Expectedly, neither Apple, Fox, nor other studios have been willing to comment on the matter.

[ View this article at AppleInsider.com ]

[Galley]

I really like the idea of a portable version of the film included with DVDs. DVD ripping is a huge pain in the ass.

[ifiredmyboss.com]

I still say Apple should buy Netflix and TIVO with some of their cash and roll it all into iTunes and Apple HDTV

[SpamSandwich]

It's not a rumor, it's a story on MarketWatch... here .

Oh, nuts... it is a rumor. It cites the FT article also. Oh, well.

[Wiggin]

Aren't current iTunes video downloads running about 1 GB for a movie? That's going to take out a chunk of available space on a DVD. If they downsize it to iPod/iPhone screen resolutions it would save space, but then I'm right back to having to rip the DVD for Apple TV playback.

It will be interesting to see what compromises they make. For $3 I'd be willing to occasionally rent at iTunes current resolutions for movies that don't have a lot of action and visual/special effects. But they'll need to up the resolution and provide 5.1 surround for to make the "blockbusters" watchable (at maybe $4). Sure the file size will be bigger, but it's only temporary since it's a rental.

[solsun]

Originally Posted by Wiggin

Aren't current iTunes video downloads running about 1 GB for a movie? That's going to take out a chunk of available space on a DVD. If they downsize it to iPod/iPhone screen resolutions it would save space, but then I'm right back to having to rip the DVD for Apple TV playback.

It will be interesting to see what compromises they make. For $3 I'd be willing to occasionally rent at iTunes current resolutions for movies that don't have a lot of action and visual/special effects. But they'll need to up the resolution and provide 5.1 surround for to make the "blockbusters" watchable (at maybe $4). Sure the file size will be bigger, but it's only temporary since it's a rental.

$3 or $4 sounds great, but I'm guessing it will be more like $4.99, which is still cheaper than most on-demand services.

[palegolas]

Finally. Sounds pretty good. The user should then be prompted with an alert saying "Your rental movie "x" expires today. If you pay $y today you may keep it. ( Pay ) - - ( Expire ). Still waiting for this movie business to happen internationally though... it's just bla bla over here until the service arrives for real.

[ncee]

Originally Posted by ifiredmyboss.com

I still say Apple should buy Netflix and TIVO with some of their cash and roll it all into iTunes and Apple HDTV

I agree. Not only does it get them a jump / add to their customer base, but gets rid of some part of the competition.

Of course getting Netflex, then would mean, changing it completely, as Netflex does the mail thing, and I'm reasonablely sure Apple doesn't want to get into that.

Skip

[macnut222]

I don't think we should be surprised to see the Disney catalog as part of this deal also.

[edunaway]

It seems that many people prefer rentals but I prefer to buy so hopefully Fox movies will also be available to buy via iTunes, especially if the rental price is $3-4. Rentals would need to be closer to $1-2 since it seems more cost effective to just buy it if you plan to watch it more than once at $4-5. This smells of a desperate attempt by Fox to drive DVD sales which continue to drop.

[e1618978]

I would rent at $3.99, which is the cost of new releases at my local video rental store. $4.99 seems a bit dear. I think that they will get a lot more rentals at $3.99 than $4.99.

[ecking]

Originally Posted by ifiredmyboss.com

I still say Apple should buy Netflix and TIVO with some of their cash and roll it all into iTunes and Apple HDTV

I don't know about tivo, apple could probably make strides in that market on their own if they tried hard enough, but I think buying netflix would be awesome, that'd be a game changer.

[digitalclips]

Sounds great ... I have to think ABC and Disney will be on board too for obvious reasons and also .... fingers crossed it is 720p

[e1618978]

Originally Posted by digitalclips

Sounds great ... I have to think ABC and Disney will be on board too for obvious reasons and also .... fingers crossed it is 720p

I would rather have 480i, actually - how long would a 720p download take? I don't want to wait 5 hours to watch my movie, and on a 50" plasma 480i is fine. How about $2.99 for 480i rentals and $4.99 for 720p rentals?

[melgross]

Buying either Netflix or TiVo is a really bad idea.

There is not one thing Apple would gain from either purchase, other than to saddle itself with the deals both companies have made already, which Apple can't break out of, without destroying those businesses.

Since what those businesses do is something that Apple isn't interested in doing, there is no point in destroying those businesses for—what, exactly?

[backtomac]

Originally Posted by Galley

I really like the idea of a portable version of the film included with DVDs. DVD ripping is a huge pain in the ass.

My thoughts as well.

Handbrake is nice but it takes so damn long to encode video.

[caliminius]

Originally Posted by e1618978

I would rather have 480i, actually - how long would a 720p download take? I don't want to wait 5 hours to watch my movie, and on a 50" plasma 480i is fine. How about $2.99 for 480i rentals and $4.99 for 720p rentals?

Do you watch your 50" plasma TV from the other side of a football field? 480i looks fine?

I only have a 37" 1080p LCD and anything standard def from the cable company looks pretty darned crappy. I know that's partially the cable's fault, but even watching a DVD without anamorphic encoding is equally painful (but thankfully a rare thing).

Having already invested in Blu-Ray, I'd rather just spend the extra $15 and own the movie in 1080p. I pretty much know what I want to own or not, and really at $5 a rental, I only ever need to watch the disc 3 more times and it's money well-spent.

[melgross]

Originally Posted by caliminius

Do you watch your 50" plasma TV from the other side of a football field? 480i looks fine?

I only have a 37" 1080p LCD and anything standard def from the cable company looks pretty darned crappy. I know that's partially the cable's fault, but even watching a DVD without anamorphic encoding is equally painful (but thankfully a rare thing).

Having already invested in Blu-Ray, I'd rather just spend the extra $15 and own the movie in 1080p. I pretty much know what I want to own or not, and really at $5 a rental, I only ever need to watch the disc 3 more times and it's money well-spent.

Of course, with a 37", and Blu-Ray, you can't sit more than five feet away and still see all of the 1080p resolution.

[e1618978]

Originally Posted by caliminius

Do you watch your 50" plasma TV from the other side of a football field? 480i looks fine?

I only have a 37" 1080p LCD and anything standard def from the cable company looks pretty darned crappy. I know that's partially the cable's fault, but even watching a DVD without anamorphic encoding is equally painful (but thankfully a rare thing).

Having already invested in Blu-Ray, I'd rather just spend the extra $15 and own the movie in 1080p. I pretty much know what I want to own or not, and really at $5 a rental, I only ever need to watch the disc 3 more times and it's money well-spent.

12 feet away. I actually have a $2500 video scaler that I don't use for cable, because if I go to a higher resolution than 480i my "stretch the edges of 480i to fit widescreen" function no longer works, and I hate black bars more than I like the slightly better picture quality.

[melgross]

Originally Posted by e1618978

12 feet away. I actually have a $2500 video scaler that I don't use for cable, because if I go to a higher resolution than 480i my "stretch the edges of 480i to fit widescreen" function no longer works, and I hate black bars more than I like the slightly better picture quality.

If you sit that far away, don't bother with the video scaler. 480 is all you're seeing clearly anyway. 10 feet is the furthest you can sit to see the full 720p rez.

[aegisdesign]

This was on the BBC news this morning too.

http://news.bbc.co.uk/1/hi/business/7161609.stm

We've not got movie sales yet here in the UK on iTunes. Rental for movies always struck me as a better idea though.

Tivo doesn't exist in the UK btw. It was totally outgunned by Sky+ here which coincidentally is owned by News International as are Fox.

I'm not sure buying TiVo would do anything for Apple here when they could just implement a Freeview DTT tuner and the Freeview Playback PVR spec in AppleTV.

[TenoBell]

Buying either Netflix or TiVo is a really bad idea.

Apple should allow Netflix to use AppleTV. AppleTV needs a DVR about as much as a DVD player needs a DVR. They perform two different functions and DVR is being dominated by the cable industry. DVD's don't need a DVR because it has easy access to a wide variety of content. This is what Apple TV needs and Apple Inc. has not secured.

[e1618978]

Originally Posted by melgross

If you sit that far away, don't bother with the video scaler. 480 is all you're seeing clearly anyway. 10 feet is the furthest you can sit to see the full 720p rez.

I agree - I really noticed the effect of the video scaler with my CRT front projector (and 120" screen - being sold with house), but not so much with a 50" screen.

I still use it as an hdmi switch though, at least until I buy a new house and get a new front projector.

[melgross]

Originally Posted by TenoBell

Apple should allow Netflix to use AppleTV. AppleTV needs a DVR about as much as a DVD player needs a DVR. They perform two different functions and DVR is being dominated by the cable industry. DVD's don't need a DVR because it has easy access to a wide variety of content. This is what Apple TV needs and Apple Inc. has not secured.

Yeah, Apple will make its own service do whatever Netflix could. Apple doesn't want to get into the business of sending DVD's through the mail, and I don't blame them. It's a perilous business.

Apple's only problem is cooperating with the studios, Netflix does that. So, if Apple did buy the service,it would be stuck with two methods it has resisted, and is trying to move away from.

But, now the word is out that Apple is now cooperation with the studios more, which is why Fox might be aboard, if the story is true.

If it's also true that there is a Fairplay copy aboard every DVD Fox will be making, that takes care of the "buy" part. Let Fox determine the price of the DVD and you get a digital file for free.

I said that Apple must cooperate, and I hope the story is true. It's the only way Apple can do this.

Forget the DVR.

http://arstechnica.com/news.ars/post...-fairplay.html

[digitalclips]

AAPL holding at over $200, got to think this news has helped

[melgross]

Originally Posted by e1618978

I agree - I really noticed the effect of the video scaler with my CRT front projector (and 120" screen - being sold with house), but not so much with a 50" screen.

I still use it as an hdmi switch though, at least until I buy a new house and get a new front projector.

Most people don't seem to understand this, and get really pissed when I tell them, but it's true. My friend Carlton is well known in the industry and has this very good site explaining it:

http://www.carltonbale.com/

We sit 13" from the screen and need slightly over a 100" diag. screen to appreciate Blu-Ray at 1080p.

[melgross]

Originally Posted by digitalclips

AAPL holding at over $200, got to think this news has helped

I'm pretty sure it's the cause.

[Haggar]

Will these videos display unskippable FBI warnings, copyright notices, etc? Will they prevent you from skipping chapters or scrolling to any part of the movie that you want?

[melgross]

Originally Posted by Haggar

Will these videos display unskippable FBI warnings, copyright notices, etc? Will they prevent you from skipping chapters or scrolling to any part of the movie that you want?

How are we supposed to know? You read the same stuff we did.

[mrjoec123]

Originally Posted by palegolas

Finally. Sounds pretty good. The user should then be prompted with an alert saying "Your rental movie "x" expires today. If you pay $y today you may keep it. ( Pay ) - - ( Expire ). Still waiting for this movie business to happen internationally though... it's just bla bla over here until the service arrives for real.

I think expiring files would be a big mistake. It's the most offensive and intrusive form of DRM. One of the reasons Netflix ended up kicking Blockbuster's a$$ originally was the elimination of timed rentals. Charge a monthly fee and let users keep files as long as they want to. Then you avoid putting a price tag on a single rental, which is bound to upset people, anyway. Some say $3.99 is too much. Others think $1.99 would be too much. Heck, people are still complaining about $.99 for owning a music track, which is beyond my comprehension. But $10, $12, even $15 or $18 a month doesn't sound so bad to most people, when you consider how many movies you could watch within that time frame.

Then, if you want to offer discounts on movies already rented, just offer a flat $1 or $2 discount on purchases for anyone with a monthly rental account.

I'm sure Apple would be fine with all of this. Whether or not Fox, or any other studio, would allow it is a different story. We'll find out in a couple of weeks.

And as far as resolution goes, don't look for anything beyond what can be played on the current crop of iPods. Apple isn't going to have multiple versions for different devices, and it isn't likely to force people to buy an Apple TV just to watch rentals. Not yet, anyway. They'll want to push the portability as much as anything else as a major advantage over Netflix.

Everyone owns a DVD player. Almost everyone owns an iPod. Not too many people own Apple TVs. Rentals are sure to help Apple TV sales, but not if the Apple TV is the only way to watch those rentals. In that case, the rental scheme will simply fail.

The iPod nano is the lowest common denominator. Which means 640 x 480 for the time being. People have been crying about this for a while now, but I honestly can't see why. The vast majority of the video watching world watches standard def DVDs, which aren't really noticeably better. And with the heavy compression on most HD TV stations, my iTunes TV and movie purchases actually look just as good as anything else I watch.

[breeze]

Universal- Take note of what is happening. 20th Century Fox gets it.

Anyone who uses iTunes will go out of their way to keep it as their software and download vehicle of choice, no matter how hard Universal tries to destroy it.

What Universal does not seem to get is that the iTunes experience is second to none and goes far beyond being a vehicle for downloading only. It is comprehensive in integrating and managing music and media for all it's users after the purchase and download in a way that no retailer can ever compete with. The user experience it provides is nothing short of excellent. Software...

The day will come when Universal will get back with iTunes and most probably in much the same way Disney did...Michael Eisner who butted heads with Steve Jobs over Pixar, was ousted by the board of directors and that's how Disney and Apple became best of partners and Pixar was ultimately bought and merged with Apple, in addition to being a solid and model supplier of content to iTunes.

Universal artists will rise and sue Universal for stifling their careers and acting against their interests. They will also have legitimate ground for breaking their contracts and suing for damages incurred as a result of iTunes lost sales. Ultimately Universal will be cutting their nose to spite their face and loosing out by not being with Apple and this will probably result in the ouster of Doug Morris, which will pave the way for reparation of the Apple Universal relationship.

Though Amazon is solid, it is just a retailer and can never provide the user support and experience that Apple can.

Universal will soon find out that iTunes is it's most profitable outlet.

Eat Crow Doug Morris you arrogant, ignorant, greedy bastard.

[TenoBell]

I said that Apple must cooperate, and I hope the story is true. It's the only way Apple can do this.

Yes hopefully everyone is coming to an agreement that works for all parties.

[melgross]

Originally Posted by mrjoec123

I think expiring files would be a big mistake. It's the most offensive and intrusive form of DRM. One of the reasons Netflix ended up kicking Blockbuster's a$$ originally was the elimination of timed rentals. Charge a monthly fee and let users keep files as long as they want to. Then you avoid putting a price tag on a single rental, which is bound to upset people, anyway. Some say $3.99 is too much. Others think $1.99 would be too much. Heck, people are still complaining about $.99 for owning a music track, which is beyond my comprehension. But $10, $12, even $15 or $18 a month doesn't sound so bad to most people, when you consider how many movies you could watch within that time frame.

Then, if you want to offer discounts on movies already rented, just offer a flat $1 or $2 discount on purchases for anyone with a monthly rental account.

I'm sure Apple would be fine with all of this. Whether or not Fox, or any other studio, would allow it is a different story. We'll find out in a couple of weeks.

And as far as resolution goes, don't look for anything beyond what can be played on the current crop of iPods. Apple isn't going to have multiple versions for different devices, and it isn't likely to force people to buy an Apple TV just to watch rentals. Not yet, anyway. They'll want to push the portability as much as anything else as a major advantage over Netflix.

Everyone owns a DVD player. Almost everyone owns an iPod. Not too many people own Apple TVs. Rentals are sure to help Apple TV sales, but not if the Apple TV is the only way to watch those rentals. In that case, the rental scheme will simply fail.

The iPod nano is the lowest common denominator. Which means 640 x 480 for the time being. People have been crying about this for a while now, but I honestly can't see why. The vast majority of the video watching world watches standard def DVDs, which aren't really noticeably better. And with the heavy compression on most HD TV stations, my iTunes TV and movie purchases actually look just as good as anything else I watch.

I don't like that idea, and a number of others have expressed that same opinion.

If they do that, then they would also have to offer a rental per movie as well.

[quinney]

Originally Posted by melgross

We sit 13" from the screen and need slightly over a 100" diag. screen to appreciate Blu-Ray at 1080p.

13 inches. You must have short legs and remarkable wide-angle vision.

[JeffDM]

Originally Posted by e1618978

I would rent at $3.99, which is the cost of new releases at my local video rental store. $4.99 seems a bit dear. I think that they will get a lot more rentals at $3.99 than $4.99.

For me, it would have to be less than that, even if local rental shop was my only other option. I have high speed internet, but sometimes it's not quite fast enough to start an iTunes movie within an hour, at which point it's quicker to go to the rental shop. I watch maybe an average of eight movies a month on my $16/mo Netflix 3-out plan, so I have a small variety of stuff to watch and I can pick which of them I want, at half that cost.

[GregAlexander]

Originally Posted by e1618978

I would rather have 480i, actually - how long would a 720p download take? I don't want to wait 5 hours to watch my movie, and on a 50" plasma 480i is fine. How about $2.99 for 480i rentals and $4.99 for 720p rentals?

Why stay with Interlaced? It's time to at least make that jump. Our laptops, iPods, iPhones, and plasma/lcd TVs are all progressive. iTunes widescreen movies are currently 360p.

Different pricing MIGHT be worthwhile, it depends on whether Apple wants to push people forward (like the removal of the floppy drive), AND on whether the backbone can handle everyone on 720p.

It'd be nice if a single 720p AVCHD file could also contain a 360p version without increasing the file size (much like Apple's professional video codec). Download the 360p movie first then optionally download the 720p.

Originally Posted by TenoBell

AppleTV needs a DVR about as much as a DVD player needs a DVR. They perform two different functions and DVR is being dominated by the cable industry. DVD's don't need a DVR because it has easy access to a wide variety of content. This is what Apple TV needs and Apple Inc. has not secured.

Apple is trying to change the model for watching TV, but they may need to play with existing systems in order to do that. I think for now that AppleTV PLUS DVR could replace cable entirely for a significant number of people, where AppleTV on its own could not. I wonder what Apple will choose.

[ebrunn]

of course their gonna be drm'd. Its gonna be the same as what you can buy from iTunes now except with expiring drm on it.

[melgross]

Originally Posted by quinney

13 inches. You must have short legs and remarkable wide-angle vision.

Heh. You know what I mean.

[pt123]

Originally Posted by Haggar

Will these videos display unskippable FBI warnings, copyright notices, etc? Will they prevent you from skipping chapters or scrolling to any part of the movie that you want?

You would think the movie studios put the non-skippable FBI warning on the DVD's because they believe it deters piracy so they would put it in these videos also.

[e1618978]

Originally Posted by GregAlexander

Why stay with Interlaced?

So it downloads twice as fast, and works with more equipment.