Apple (NASDAQ: AAPL)'s iTunes just got a new video partner in News Corp (NYSE: NWS)'s Fox movie studio. The deal is the first of its kind, allowing iTunes subscribers to download Fox movies and watch them for a limited period.
According to The Wall Street Journal, "sales of video through Apple's iTunes Store have failed to grow at the same pace as the site's music downloads, analysts say." So, perhaps offering rentals will be a better model than selling content outright.
But the theory makes little sense. Short-term rentals are unlikely to trump sales. Movies sold on iTunes cost as little as $9.99, a visit to the Apple site shows. How much less can a rental be? And what is the incentive for having something that can only be used for a few days?
Nice partnership, but no reason it will increase video revenue at iTunes.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-27-2007 @ 8:49AM
djh said...
I find fthe Mcintyre comment here (and another one by him on Market Place) to be offbeat. In the Market Place piece he says iTunes rents movies for 12.99 (untrue as far as I can see) and that no one wants to watch movies on a 2x2 screen. Well, that's true but you can either use Apple TV or slap a cable from a laptop to a TV in about two seconds.
In this post he says: "Movies sold on iTunes cost as little as $9.99, a visit to the Apple site shows. How much less can a rental be? And what is the incentive for having something that can only be used for a few days?"
We must live in alternate universes. I almost never rewatch a movie. And, while I love Apple TV I refuse to pay 9.99 to see a movie. So somethimg cheaper than 9.99 is for me a home run.
12-27-2007 @ 11:00AM
Wonkey the Monkey said...
"How much less can a rental be? And what is the incentive for having something that can only be used for a few days?"
That's the most idiotic thing I've heard today (though to be fair, I've only been awake for about half an hour). Is McIntyre seriously calling into doubt the whole concept of video rentals? In case you've been asleep for about twenty years, here's how they traditionally work. The customer pays a fee to take home a video or DVD of a movie they want to watch. After a few days, they return the movie to the distributor.
Did you catch that? They pay for it, then they return it after only a few days! Revolutionary! Often, the price is somewhere around 99 cents per day. Quite a bit less than the $9.99 required for a permanent copy.
I personally do not buy movies from iTunes. I don't trust the DRM currently in use, and I don't like that I can't transfer them to DVD. I would definitely buy a movie rental, though, because it's supposed to be temporary anyway. The ability to instantly rent and watch any movie or TV show without traveling to a rental store or kiosk is very appealing, especially with the added bonus of having nothing to return.
12-27-2007 @ 11:22AM
mark said...
Why does MacIntyre twist the original WSJ article, which speculates that Apple will charge $2.99 for a 30-day rental? Because he can't help himself when it comes to casting negative aspersions onto AAPL.
Moral: Go elsewhere to find out more.
12-27-2007 @ 11:42AM
douglas mcintyre said...
The original article was in the FT. The WSJ piece picked that up