Sunday, September 24, 2006

Thoughts on Apple's movie strategy

Yesterday's story in the New York Post that Wal-Mart was threatening some movie studios with retaliation if they sold movies on the iTunes Store, and Wal-Mart's subsequent dispute of the allegations, got me to thinking again about Apple's move into the movie distribution business.

Some people were predicting Apple would start a movie download service, along with some sort of streaming device, as early as 18 months ago. And let's face it, it's probably going to be another six months before Apple starts selling its "iTV" device, by which time, the company will probably have a few more studios lined up to sell their wares through the newly named iTunes Store.

So, come next March or April, we Mac users will likely have a new operating system in the name of Leopard, a fairly good range of movies in the iTunes Store from which to choose and a way to get those newly purchased flicks onto our HDTVs (we'll overlook for the moment that these movies won't be in HD).

Now I admit I'm not the typical consumer of movies. I rarely go to the movie theatre and rent maybe two or three DVDs a year, mostly because the offerings are decidedly mediocre, and it's a PITA to drive down to Blockbuster (or wherever) to rent a DVD. That said, if I could watch a movie on Saturday night with a click of a mouse, I'd probably be much more inclined to partake of Hollywood's fine products. But a few things will have to change before I jump on this bandwagon (and assuming of course that movies will be available in the Canadian iTS before the turn of the next century).

First and foremost is that I'm not interested in buying movies. I have no desire to own a collection of movies like I own a music collection, and I suspect I'm not the only one. There are those who go out and buy movies at Wal-Mart, but most people rent movies; after all who wants to watch a so-so movie more than once, especially when Hollywood pumps out a seemly endless flow of them? So the lack thus far of a way to rent downloaded movies is a huge drawback for me. I just want to pay a few dollars to watch a movie once, and I might even pay a little extra to NOT have to drive down to Blockbuster to get it. Four or five bucks a pop would be about my threshold. More than that and I'm just not going to bother.

Which brings me to my other main hesitation: price. Even if I were interested in buying a movie, why would I pay $15 for an "almost DVD quality" movie when I can get the real thing at Wal-Mart for the same price and get more features to boot, AND, have the physical DVD (which I cannot have with movies from iTunes)? Ten bucks seems about right to me, so Apple's not that far off the mark, and there are some titles available for that price. I suspect that Steve Jobs agrees with me on this one but had to concede the argument to Disney or risk not launching before Christmas.

I also find the iTV unit a little pricey, but I can see it coming down in price at some point. The fact remains, however, that there are still a number of obstacles to this service becoming really ubiquitous, and I suspect that in my case it will be at least another two years before I'll be downloading any movies from the iTS. But then again, I bought my first iPod 18 months ago, so I'm hardly an early adopter. In 18 months, everyone will be clamouring for an iTV and downloading movies like crazy, and Apple and the movie studios will be making money hand-over-fist, so we'll all be happy as clams. Just you wait, Mr. Cringely. As usual, you're way ahead of yourself.

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