New report claims 24-hour, variable price iTunes rentals

Hmmm.... if variable pricing can work here, surely it should work with music too?

apple will not price rentals at more than $1.99 which is way to much i think. why?? because they have netflix and others compete with. $5 is the price of a new release DVD on ebay and amazon used in nearly perfect condition

Here in the UK you'd never pay $5 for a new rental, so I hope that if the service comes here Apple don't do their usual pricing strategy...

MGM is a Sony subsidiary, why the different policies?

/Adrian

I would absolutely go for $2 rentals. I don't care if it's one play and 24 hours to play it. I don't watch movies that frequently, so this would make much more sense for me than Netflix or anything like that.

If these are still SD, though, I will have difficulty justifying much more than $2 a movie. HD movies for $3-4 would be okay, but not for SD. I really hope Apple doesn't think they can still justify selling standard def movies for anything more than bargain basement prices in 2008.

LOL. $5 for a rental. Sounds like wishful thinking on the studio's part to me. Maybe the $2 a day thing might work, but you're gonna need HD content soon.

For me: $2.87 per movie.

I'm interested in what other people are paying. Anyone else want to do the math?

NOTE: To calculate that number, I pulled up my Netflix history and counted how many movies I had actually received during 2007: 77 movies. Then I added up my yearly cost for my 3-at-a-time plan including tax ($18.39 x 12 = $220.68) and divided that by my 77 movies for an average of $2.87.

How about you?

I've decided I'm only buying from iTunes, and any of the studios or music labels who want to try to screw Apple can find other customers. I know they're trying to break Apple's distribution monopoly by selling only to Amazon so they can raise prices later, and I'm not going to fall for it.

$2 for 24 hours? With the Walmart RedBox at only $0.99 per day, it won't be very appealing except maybe for the older movies that have moved out of the RedBox.

Not leaving your home could be a slight advantage I guess, but Walmart for me is less than a 5 minute drive.

For me, it was 78. Of course, since the iTunes price always includes tax, I based it on the actual paid NetFlix price of $18.34 a month. So for me, $2.82 a rental.

Of course, if you had 24 hours to watch it after you began watching it, I'd totally pay that price. The other day I bought an older $10 movie on iTunes for the kids to watch with a moments notice instead of going to the store, hoping that had it, etc. I would LOVE to have been able to rent it.

As much as I love NetFlix, if I could just rent virtually anything at the drop of a hat for $2-$3, I would definitely cancel my membership and do that. NetFlix makes it easy to queue things, but I will routinely find myself with 3 movies I'm not in the mood for right this. iTunes rentals would solve all of that.

Sign me up.

I personally think that the DVD era will end. Do you remember video tapes?
I don't know anyone who uses VHS anymore. If we could be able to rent movies
off of iTunes or maybe put them on Apple TV, life would be just perfect. No more waiting for DVD's in the mail or driving to the store. Rentals right in your home, when you want it.

What do you think?

Gosh you're a genius.

Don't expect DVD's to die anytime soon though. Or DVD players for that matter, given that most people on this planet have at least a small collection of them.

This is fine if I want to view a movie during my commute, but what if I want to take a few films on a trip? I guess it means I have no choice but to go the illegal route and rip...

It's not DVDs that iTunes rentals would compete with. It's the cable companies' Video On Demand services and Amazon Unbox (TiVo) that are the immediate competition. The last time I even looked at VOD prices, Time Warner VOD rentals were 24 hours and range from $1.99 for old low-demand movies, to $3.99 for the latest releases. Those releases tend to be SD, not HD, locally.

You're right on that, though Sony doesn't appear to be the sole owner, I really don't know the specifics. Maybe they're just testing the service? That doesn't seem to make sense as they can probably choose what movies to release to the service.

I currently pay $2.99 for two physical DVD rentals. One is a new release for one day, the other is a "catalogue" movie for 7 days. Regular catalogue movies by themselves are 99¢ for 7 days. I can be at my local video store and back in under 10 minutes. iTunes rentals would have to come in a lot less than than two for $2.99 (or one old one for a buck) considering how long it takes to download them, AND I don't get the extra content from the DVDs.

While the DVD era will end someday, it won't be for decades. The DVD is still inferior to the VHS in many ways. It takes forever for a DVD recorder to turn on and they all have incredibly frustrating inconsistency. Sometimes they record, sometimes they don't. Sometimes they record and then when I try to watch it, the recorder says the disc is blank and wants to format it. I've bought 4 DVD recorders (Lite-On, Sony, Zenith and Samsung) and I have had the same problems with all of them. I can't rely on them. No, only a VHS will turn on instantly, record instantly (don't have to format, can pause - flip channel and continue to record without a 3 minute delay, etc.) and never lose the image it recorded (unless you record over it). I long for the day when DVD recorders are as reliable and instanteous as the VHS VCR!!!

Although, I suppose DVD's could die from a lack of a good DVD recorder if Apple turned the MacMini into a VCR-like DVR, elimintating the need for a monthly fee (like TIVO)! I would buy three of those tomorrow!!! All I want is a VCR-type device with a hard drive instead of a tape. Let me program it and use it like I want.

This doesn't sound right, 24 hours is not long enough. And what would be the motivation for keeping it so short? I remember renting videos from Blockbuster back in the day, and their new releases were just 24-hr rentals, because they wanted them back so other people could rent them. What's the point of limiting a digital download to 24 hours?

Why is everyone comparing iTunes Store video rentals to Netflix and making price comparisons of the two? The most direct and obvious comparison is your cable company's On-Demand video. Mine charges me $4.99 for new releases and as low as $1.99 for children's movies and classics.

Ever try a HHD plus DVD recorder? it records the programme to HDD then when you are sure you have a viable recording that you want to archive you burn it to DVD. Panasonic do a few of these, as do Sony and Samsung.

Alternatively the Elgato EyeTV will record to your mac mini.

24 hrs as reported seems very uninteresting. But, here's a guess:

What if you get to download and the 24 hrs starts AFTER the 1st attempt to play? Now, that's a great way to rent!

Movie lovers would download movies they're interested in (by the dozen if they wish). And then hold them in a library for as long as they wanted! Think of it. This would be huge for people and aapl's share price. Woudn't you'd love to have 10 movies available to view (with each of them fully downloaded in pristine HD readiness)?

WOW!

(I'm very lone aapl stock.)

Not a bad option.

I don't know about you folks, but I have rental a movie locally, and not got around to watching it - more then once.

I will say 24 hours is what you get from DirectV - and that's fine, seeing most of the time, I only pirchase it, when I'm going to sit down and watch it, but the $3.99 HURTS a bit.

Hell I got some gift certificates to Best Buy, and I'm heading there shortly, to purchase a few DVDs to watch this afternoon (going to get the Serinty & Firefly series).

I think the buttom line is this - what ever they do, and what ever they end up charging, will likely have an impact and what the others charge later on down the road, and if that leads to lower prices that's a good thing for us, the consumer.

Skip

I know it's been said before but I won't purchase or rent movies from iTunes until they increase the quality from "near DVD".

I've been ripping all my DVDs with Handbrake for TV playback (on a 51" HDTV) and without doing a side by side comparison nobody has been able to tell the difference between the DVD and the rip. Last week I downloaded a movie from iTunes for the first time (Enemy of the State) and was slightly disappointed in the quality. It wasn't horrible but it was noticeably worse than any of my ripped movies.

Because of that I don't plan on any movie downloads until quality goes up. HD would be awesome but DVD quality or better will probably do just fine.

I'm sorry about your frustrations, but that is only one way DVD might be worse than VCR. You didn't say what else about DVD is inferior.

I don't use real-time DVD recording, it's often a waste of a DVD anyway.

Maybe that's because Netflix is what many of us use? Why compare it against something we don't use if that thing isn't competitive with what we're using? Ideally, like-for-like may be more valid, but here, it's not a realistic expectation for consumers to accept. If we think On-Demand is priced unrealistically, then what's the point of considering Apple's service if it's only comparable to an unrealistic option? That's stretching the argument too far.

I think the 24 hour issue is going to bigger than most expect. Americans, at least, have become used to the renting of movies and watching at their convenience; Blockbuster came to find that out when they were forced to expand their rental periods and drop late charges. Netflix offers the best time/rental solution.

I think the inconvenience of one, having 24 hours only to watch a rental, and two, the subsequent apprehension of renting multiple movies because of time constraints, will be the thorn in using iTunes rentals.

The limited catalog I see as much less of an issue because you're using your computer in front of you to search. It's much more of a pain to drive to the rental store and not find your primary selection or have Netflix delay a couple of days until stock returns. Cost, likewise, is still within reason and I figure the common person doesn't worry about HD nor is willing to wait for such download times to get it.

/

I don't agree with your line of thought. You're assuming that since you use Netflix, that iTunes rentals should be designed as a challenge to Netflix. They're two totally different business models.

Netflix is a queued request hard copy delivery service, which means it takes at least one full day to receive your content, and more likely 2-3 days.

iTunes (as well as Amazon Unbox, Microsoft's XBox rentals, and Cable Company VOD ) are ON DEMAND DIGITAL COPY delivery services. Almost instant gratification if you're on any kind of broadband service. iTunes model is also designed to give you multiple playback options (aTV, iPod/iPhone, computer). Your rentals when and where you want them, even in your pocket.

If the pricing of iTunes rentals is at all competitive to other DIGITAL delivery methods, it stands a chance of being successful, Netflix and BlockBuster notwithstanding. If they offer a large enough catalog with some improvement over the other digital content providers in either the form of higher quality video or lower prices for same quality, then they will be a force to be reckoned with.

A clear advantage to an iTunes model over DVD rental is that an offering in the iTunes catalog is always available, whenever you want it. I can remember many trips to the BlockBuster where the movie I wanted wasn't in stock, and I remember last year a Netflix item that sat at the top of my queue for months and never came available. With iTunes, there's no limit to how many copies can be checked it. No waiting, no queues. Brilliant.

If you're happy with the longer delivery times and cheaper prices, and often unavailable status of rarer or more popular movies with the DVD bases system, then press someone to try to do it better, but don't expect Apple to cater to the old school way of doing business.

Apple are innovators, looking to change the way we think of using our hardware and getting our content. They're not going after Netflix per se, they're going after you and the way you think about getting your content. When you try their model, and love it, you'll use it more and more. This may or may not affect Netflix for many years to come. After all, even with the explosion of email and text messaging, people still mail things the old fashioned way via USPS and other postal delivery services.

Plenty of Americans are doing the 24 hour rental thing right now with their cable company's VOD pay per view rentals. $3.99 for a 24 hour rental, with the 24 hours starting as soon as you hit the rent button. The business model must work, or the cable companies wouldn't keep expanding the service offerings in this field. Before I found alternative free methods of getting my video content, I much preferred the VOD model to get what I wanted when I wanted it vs. the drive to the video store or wait a day or two for Netflix/BB to deliver my desired DVD.

As broadband cable or other fiber optic services penetrate more and more households, download times become a non-issue, even for HD content. Isn't Verizon FIOS something like 50 times faster than DSL? You can suck down a lot of bits in a very short time at those speeds.

Too many people in this thread are upset over a service we don't even know the details of yet, and angry that it doesn't meet their needs. Just because it doesn't meet your specific needs/desires doesn't mean it won't be a huge hit and big $$$ maker for Apple...

You make some good points and for use with AppleTV your thinking is fine. However, what about iPods? It is generally accepted that Apple use iTunes to sell iPods. Surely Apple would not want to go to the trouble of setting up a video rental system where you cannot take an iPod on a trip with a rented movie? If it really was the case that you had to watch it within 24 hours of download, there would be a major problem for iPod video users (unless they are the iPod touch with Wifi download capability themselves!). This suggests to me that there is more to come to light than we know already from these 'leaks'!

I really don't care about the distinctions and semantics on the business model.

I don't want Apple to kill Netflix, that's not my point, I was hoping to see somthing that's competitive to that. I never said Netflix was perfect, I'm just saying that's what I use. If Apple doesn't want to compete with Netflix, that's clearly their business, I won't dispute that or begrudge them that choice. But I would see little point in taking much of my money to their service. At best, it would be to fill in the holes left by Netflix's disadvantages, but I doubt that as I often need closed caption / SDH tracks to be able to pick out some lines.

As far as I'm concerned, the convenience of something like this on-demand is pretty harshly negated by the reputed 24 hour limit. All of this is based on rumor, so we'll have to see how it turns out.

I think the jury is still out on the success of VOD. It's really the only card the cable companies have to play in the video market. So its success is measured by its necessity. It's why movie channels like HBO and Showtime have turned so hard to original programming; the rental market is besting their movie selections. VOD is how cable companies are trying to lure customers to maintain their high cable fees and often why you see it bundled to more attractive options like sports packages and HD programming.

But I do respect your analogy on the similarities. I just think people would be more apt to use iTunes rentals if the rental period were longer. If you think about it, it goes against one of the principle features of iPod video, the ability to transport your video with you. Granted, I think all of this is geared towards the advancement of the Apple TV; once again, the content sale is not Apple's primary goal, but the instrument on which to use it.

Your final point rings the truest. All of this is just speculation until MacWorld shows up...no use getting all flustered until the real details come out.

Happy New Year, everyone!

/

I think that apples pricing strategy will be in the same format as songs,,, there will be two price points, a 1.99 and a 3.99 price point, in my opinion for a 24 hour rental,,, if this is the time frame, im wondering about the video content providing, teh download will have to be relatively quick,, but,,i think the apple tv is gonna get an upgrade,,,,,, and were gonna see more from the magic box,,

Anyone else notice the growing trend of 'worst case' scenario rumor press over the past three or four years leading up to major special events?

This wreaks of testing the waters to see the test the range of reactions based on the price options they themselves have no doubt tested in closed groups that include Apple corporate employees.

Interesting. The way you describe it it isn't "bait and switch" but it would a way of "testing the waters." I have no knowledge of marketing dynamics but it seems to me that judging customer reactions to rumoured pricepoints and configuration options would be a surefire way of getting real data for a product that would far outweigh the bias of a forced survey.

I am quite certain that the iPod/iPhone will never be left behind in any kind of rental scheme. Those are Apple's bread and butter products, and short term video content (ie, video podcasts, movies and TV shows while on the road, etc) are the small video based devices' forte.

I can think of any number of methods Apple could implement to enforce short term rental periods that work with iPods. Several mentioned in this very thread. Movie plays on your iPod until you sync again? Or, keeping in mind that Video iPods are now OS X based devices, there's certainly a way to put some kind of calendar based DRM scheme right in the iPod's operating system that gives you the 24 hours to watch once you start watching it scheme that is most likely the model we'll see.

The iPhone/iPod-touch is Apple's premier non-Mac product line right now. An interesting thing about those products that many seem to be forgetting is that they are SD (Standard Definition) or lower quality only products. iPhone's max supported video format is 640x480 on it's native screen, and the TV-out mode is 480i. (see this link to verify: http://www.apple.com/iphone/specs.html). You're not going to be watching HD content on your pocket device any time soon.

The iPhone/iPod compatability argument shoots a very big hole in all the demands/arguments that HD quality must be available for people to use the iTunes rental service.

Perhaps movies will be offered in both formats, for the consumer to choose...or maybe automatic downscaling of video to fit the iPod on sync? Given iTunes (and even Quicktime Pro's abysmal conversion speeds (compared to Visual Hub or Handbrake), using iTunes to down convert video will be a painful experience at best.

I'll concede the other poster's point that TimeWarner/ComCast VOD services may be less successful than I think and may be only desperate attempts to keep subscribers, but I don't think so. They may not be the ultimate provider of our content in the not-so-distant future, but it's clear that content-on-demand is what the forward-thinking public wants, and they will flock to whatever service provider and media format provides that with the most convenience and best value. (Notice that I said best value, which is subjective, not lowest price. Many people will pay a premium for a better experience.)

One other point, those of us who read blogs like this tend to be the technorati or geek types who love technology and want to wring every last bit of performance and value out of our hardware. We're a very small, though maybe very vocal, portion of Apple's consumer base, and of the video-content market as a whole. For mom and dad, or Joe Average consumer, none of this matters. They're going to buy the APPLIANCE that they can plug into the wall that gives then what they want with simple menus and little thought required about what it is and where it came from. We in these groups don't fit that category and sometimes have a tough time reconciling that for consumer products to be successful, they often have to be dumbed-down to the lowest common denominator. :-(

I don't know how many users on this forum bought a movie off of iTunes for their Apple TV. Many seem to think that the service is instantaneous - well it's not. When you purchase a movie iTunes takes about 1.5 hours to download it to your computer and then a few more minutes to download it to your ATV, if you're not watching YouTube. If that movie happens to be High-Definition, like many are demanding, I would only imagine it taking 3 hours or more, depending on your connection speeds of-corse, my numbers are based on a 10Mbps Cable connection.

Unless Apple figures-out a way to stream the media, instant service or especially HD movies on your ATV are not convenient at-all. However, the current quality of iTunes movies (non HD) are not bad, the demos you might've seen at Apple stores where TV shows such as South-Park looked very low-res are in reality much higher quality if you've purchased them from the iTunes store.

Realistically: If you arrived from work at 6:00 and immediately started to download a HD movie, you might finish your download by 9:00, then you must get off of YouTube - if you were on it - for at-least another 0:05 (3GB upload). By the time you finish watching your two hour movie, the time would be past 11:00. Remember you started at 6:00!

Ah, but it's not semantics, it's the reality of two different business models, and Apple does care about the difference, they are a business after all. They have to have something very special, or very different from the "big boys" that are already out there to be successful.


It's subjective. I think short-term low-priced instant gratification on-demand services are competitive to Netflix's model. I cancelled my Netflix a year ago because their model didn't work for me. Not enough value for me. It was hit or miss on what I'd get from my queue, and hit or miss on how many days it took to arrive. It works for some, not for others. If Netflix isn't the perfect solution, and enough people think so, a market for something that is better competition for it than were speculating iTunes will be will emerge soon enough. We're really in the infancy of this video stuff. Lot's of ways to get movies now.

There's a service called Jaman (http://www.jaman.com/ that offers a very palatable rental scheme. $1.99 for rentals ($4.99 to purchase). The rentals last for one week, with unlimited viewing during the week long rental period. Is that more competitive to Netflix? The problem with Jaman, right now, is that their catalog is primarily foreign and inde stuff that don't appeal to the mass market. Check them out.

Good points. No reason Apple can't find a way to stream it, though. Bandwidth hit on them is the same whether you stream or download, unless they start using some kind of BitTorrent technology (with consumer's consent) to distribute content. (That's how Jaman I mentioned in prior method works if you set it up to allow it.)

It's still more convenient than a mail-order DVD scheme. Pick tonight's movie before you go to work, it's ready and waiting when you get home...would that work? But agreed until FIOS speed bandwidth is widespread, it's not even a threat to a cable providers VOD service.

One minor correction, no need to transfer the file to your aTV once downloaded. Why bother with that? Just stream it from iTunes when you're ready to watch.

The 3GB figure is on the upper end, I think iTunes movies can be as small as 1.5GB.

You can stream to AppleTV from your computer, no need to copy the entire file over. On a computer, the user can start watching movies before it's done downloading. You'll want a connection that's faster than real time though. If Apple hasn't already done it, then they need to allow the user to start playing the download before it's done. The part that I know they need to add is to allow buying & renting through AppleTV. Otherwise, it's not really a video on demand system at all, so it's the worst of both worlds, the expense of VOD, but without the same level of convenience as a real VOD.