“Apple Chief Executive Steve Jobs’ tiny iPod has turned his company into a category killer for the digital era–first wiping out music stores and now, potentially, the corner video store,” Brian Caulfield writes for Forbes.
“Starting in mid-January, the Cupertino, Calif., computer and gadget maker will take on Blockbuster and Netflix by renting movies from Fox on its iTunes digital media store, according to a report first published in the Financial Times earlier this week,” Caulfield writes.
Apple’s iPods “now have a proven record of disruption,” Caulfield writes. “Amazon rents movies to users of PCs and TiVos via its UnBox service [and] Microsoft is even offering digital movie rentals on its XBox 360 game console. Neither company, however, poses the same threat to DVD rental companies as Apple, which has an installed base of more than 100 million digital media devices that consumers carry in their pockets… Video rentals could surely revive [the company’s Apple TV] effort.”
Caulfield writes, “Despite Apple’s movie rental push, Blockbuster and Netflix won’t disappear tomorrow… Still, their days might be numbered: The iPod has killed before. It will kill again.”
Full article here.
Not Netflix. The “video shop down the street”, they’re outta here, but Netflix will stay for a long while.
ID Argyll
Most people are not going to watch FULL-LENGTH rental movies on an iPod. Apple’s advantage here is not the installed base of iPods, but the installed base of iTunes software. If Apple does release an iTunes video rental service at MacWorld, Apple TV is sure to become much more prominent in Apple’s product line-up and marketing.
In addition, Apple has the most elegant and graceful foundation for allowing most of us to access content. These days I seldom go upstairs to the living room to watch television or a movie on the giant flatscreen HDTV.
Instead I watch it on my computer. I’m always downstairs working. So I have work up on one monitor and video up on another.
I believe though that Netflix compliments my lifestyle. A movie comes in the mail, I pop it into the machine, rip it, put it back in the envelope and send it back to Nextflix.
Someday I might even get around to watching it.
In a few years, Apple will be selling the *real* AppleTVs. They’ll be HDTV’s with hardrives.
@ ken1w.
Good point
I agree with G Spank, however, I think that at a certain point, even the HD won’t be necessary. The video will be stored on massive Apple servers and simply streamed to the masses of hungry eyes out there.
The majority of the “100 million digital media devices” that Apple has in there “installed base” is older iPods that don’t play video. (MDN should have caught that)
Still, I do agree with their future predictions.
there/their – is/are?
not my day I guess
ken1w,
While I agree that “most people” won’t watch full length movies on an ipod…I think you’d be quite surprised at how many
1. Watch them while travelling or in transit
2. Watch them on a television with some simple cables
3. Watch them through Apple TV
4. Watch them on an iPhone
5. WILL watch them on their computer and/or Apple Tablet
My dentist for example has a PC laptop and an iPhone. He travels all the time (his bills to me are high!)…and watches movies on his iPhone. It’s actually not a bad experience (the audio makes a huge difference).
It’s really not about “most people” in a fractured media environment. After all most people won’t do a lot of things that seem to do incredibly well financially. It’s about ENOUGH people.
Netflix has already killed the corner video store.
The question is, will Apple kill Netflix?
Not until the network to the home gets much faster. And for many of us, the network is provided by the cable TV companies.
The fight shall be interesting.
Not a chance until they have the same selection. Which they won’t.
The decline of the video store at the corner happened long ago. It occurred when the small mom and pop shops got put out of business and stores like Block Buster started littering the landscape and pasteurizing the content of the classics and new releases by eradicating scenes they deemed to be not PC or unfit for consumption by the “Moral Majority”. For my money…a pox on those guys and their selective use of content. They never gave people a choice. If Apple does do this rental deal , I suspect they will continue with the format of giving the customer a choice of “Explicit ” or “Pasteurized”. Just once I’d like to rent a video and see it as it was actually released, warts and all.
And a report on the news tonight has said that Walmart is pulling the plug on their rentals
Here’s some fun reading:
http://abcnews.go.com/Technology/ZDM/story?id=3800270
Who else is TiVo in bed with these days?
I just don’t get it when people say the network to the home needs to be faster before Netflix has to worry about this. My movie downloads from iTunes average about three hours or less on a cable modem.
How long does it take for Netflix to mail a DVD to your house? Can they do this in three hours? What am I missing here?
But what happens when and if Apple movie rentals are as successful as some of us hope?
Who owns and controls the bandwidth that will be necessary?
I would not do a 3 hour download even if the bandwidth was available. I would still just get it at the corner franchise movie store. 5 minutes to pick it up, 30 seconds to drop it off.
It’s really pretty simple, and Einstein said it best: “Technological progress is like an axe in the hands of a pathological criminal.”
WHO WRITE these stupid articles… ?
Mp3 players hit the market long before iPod.
Palm and Blackberry were browsing the web before iPhone.
Piracy of video and music HAPPENED long before; during the NAPSTER days. Besides, hacking is not the business. Digital media business was not truly established.
The old formula / model for business is the problem. Digital media business is just shaping up… Apple is leading the way not killing it because THEY are the only COMPANY that UNDERSTANDS it!!!!!!
Apple should be accredited the successful model, yet crying competition rather then innovate – even review their business practices… just chooses to whine….
Funny, Apple not only makes innovative products but knows how to innovate on business too.
Apple is simply getting us over the hump. They see through the fog… this is why Macrosloth is coping Apples DRM methods and now simulates by placing it’s own proprietary spin to the business plan.
iPOD is not to be blamed. Apple has killed NOTHING.
Only offered choice and enhanced the experience.
LONG LIVE STEVE JOBS
iCON… not only is he the best second act…
but Steve did ok with the NEXT, better at PIXAR, then returned to APPLE, and is shaking up Wally World too!!!!
THERE are many people at Apple we should thank as they are the reason for redefining OUR whole digital universe and the way North America shall do business!
NOT KILLING IT…. leave that to WALMART.
thx
Dougless
Why does everyone focus on the Netflix mail order program while completely ignoring their online Watch It Now service? It might be off to a slow start but they sure as hell won’t abandon the idea like Walmart did.
I bet we see a major expansion of the Watch It Now catalog around the same time iTunes starts the movie rental service.
Excellent post Dougless. You get it.
It’s apparent English is a second language for you but even through the haze, your message is coming through loud and clear.
Couldn’t have said it better myself and I’m second-generation American!
the install base isn’t the ipod install base, its the itunes install base ’cause we all know that regardless of the generation of the ipod itunes will be the delivery method. it’s already well known that the latest itunes contains code that mentions rental. come macworld ’08 we’ll see exactly how this code will work.
mw “moment” as in now is the moment!
As for TV and hobbies, let’s not forget Pixar was another hobby of Jobs.
Jobs was smart enough to give Ed, Alvy, and especially John all of the creative space they needed, while ensuring business-smart people kept them all afloat, even as they hemorrhaged money.
Everyone, including Lucas, never gave that company much of a chance and by some twist of fate, it was Pixar that gave Disney animation a new lease on life and it was Jobs who insisted Lassiter take the helm.
Is Jobs Midas? Perhaps, love him or hate him, but don’t bet against him.
> I would not do a 3 hour download even if the bandwidth was available.
@ kenh
NetFlix and Blockbuster use this thing called a queue. This is a list of movies you want to see next, in order of priority. Apple could do the same thing. In Apple’s case, the queue would be used to pre-download the next three (or whatever number makes sense) movies in the background, or during a time you designate (like when you are sleeping or at work). The movie files sit inert on your computer until you decide to watch the movie; the rental charge takes place when the movie file is watched; the files is deleted when watched or if you take the movie off your queue. And iTunes controls it all.
That would solve the download delay issue, without an increase in available bandwidth. I think it will also overcome the issue with offering HD quality movies. Apple could offer both regular DVD quality and HD quality, at two different rates. In one step, Apple may make the HD DVD format war irrelevant for many customers.
100M iPods – 400K AppleTVs
99.6M short on the video players
100M short on HD quality video players
Even at 6 Mbps (Elite DSL or Cable), it just takes too damn long to download an HD quality movie (1080p). I didn’t pay $3000 for my new HDTV to watch crap quality downloads.
Maybe when broadband achieves at least 10 Mbps then this business model will work.
>>”I just don’t get it when people say the network to the home needs to be faster before Netflix has to worry about this. My movie downloads from iTunes average about three hours or less on a cable modem.
How long does it take for Netflix to mail a DVD to your house? Can they do this in three hours? What am I missing here?”
What you will be missing is a HUGE difference in the quality of the video you will be watching. It will not be HD and even now is described as “near DVD quality” (read NOT DVD quality). Not to say it won’t change in the future, but right from the Apple TV specs page:
iTunes Store purchased video, 320×240 or 640×480
>>”I think it will also overcome the issue with offering HD quality movies. Apple could offer both regular DVD quality and HD quality, at two different rates. In one step, Apple may make the HD DVD format war irrelevant for many customers.”
You will not be getting FULL HD quality movies anytime soon. Yes – bandwidth matters and a queue is not going to help that. Are MILLIONS of people going to be queued-up to the iTS 24/7? Again, bandwidth matters – big time.