Tuesday, January 15, 2008

When is a Theoretical Market not Theoretical Anymore?


I'M GOING TO go out on a limb here and say, "Oh, About five minutes after Steve Jobs announces it from the stage of Friggin' Macworld."

"It's too new! We don't know how to make money!"

From Today's San Jose Mercury News -- "Apple Makes a Big Bet on the Digital Living Room."

SAN FRANCISCO - The digital living room has been a tough nut to crack, but Apple is giving it another try.

As expected, CEO Steve Jobs announced a new digital movie rental service today at the company's Macworld conference here. Unexpectedly, the company will offer movies - including some in high definition - from all the major studios. And consumers will be able to order the movies directly from their TVs using an updated version of the company's Apple TV device.

Consumers will be able to start renting movies through the company's iTunes store by the end of February, Jobs said. The company will send out a software update to Apple TV products in two weeks that will make it compatible with the new service, he said.

At launch, the rental service will offer 1,000 movies, including 100 that will be available in high definition. Movies will be available 30 days after they come out on DVD. Apple will charge $3.99 for a new movie and $2.99 for older ones - and $1 extra each for high-definition versions.

The reports and rumors surrounding the rental service in recent weeks had Apple signing up one, maybe two of the major studios to the service. That Jobs was able to get all the studios on board is "staggering," said Tim Bajarin, president of Creative Strategies, a tech consulting firm. Few digital video services to date have found such widespread support.

"What Steve did today is show he is the master broker," Bajarin said.

But they can't make a deal with the people who create the content.

"Pffffffft."

3 comments:

Matt Neffer, Boy Spotwelder said...

well, wait now, denis... do people really want to "download" this sort of "content" onto their "computers" rather than renting a DVD or watching it on TV?

oh, wait, they do? oh, fuck me then...

Unknown said...

Apple and the studios are going to wake up to a cold shower in a few years.

It's great that the studios and 'steve' dream of a digital future where they collect $4.99 every time someone wants to watch their favorite flick... unfortunately they will (in a few years) wake up to a cold shower called "Your ISP".

Whether it's Comcast in the US or Videotron in Quebec, ISP's are slowly closing down the 'unlimited' bandwidth we have been enjoying.

Videotron not only abolished unlimited downloads, but slaps a surcharge of $7.95 per gig if you download more than 20 gigs/month.

20 gigs, that's roughly 4 DVDs worth. So if you rent 2 movies/week, around mid-month, you'll have to fork out 4 x $7.95 extra (excess bandwidth) + $4.99 (itunes rental cost) = $36.79 to rent (not own) a film.

Once people realize this, expect the number of on-line rentals to be lower than expected.

At those prices, I would certainly be more inclined to BUY Blueray discs that I'll own rather than rent an on-line movie that will become useless 24h after I watched it. :)

DMc said...

Yeah, Canada's rather behind the curve about data. That's why we don't have the Iphone yet. I have doubts that in the great regulatory clusterfuck that's coming that anyone will side with the people with the pipe. I guess we'll see.