How Apple could deliver workable iTunes video rentals

“Apple is reportedly considering an expansion of its iTunes offerings to include video rentals. How can Apple succeed in a market where so many other online media outlets have failed or are struggling for relevance? By taking an new approach that follows what works in the real world, and respects the existing culture rather than trying to overturn it,” Daniel Eran Dilger writes for RoughlyDrafted.

“Rather than renting one-use access to media rentals that are timed to explode, it seems more likely that Apple will deliver a slot-based media offering, where users could buy a certain number of slots on a subscription basis. When finished with a movie, the user returns it to the slot and can replace it with another download. This would copy how Blockbuster and Netflix run their DVD rentals, within the virtual realm,” Dilger writes.

“The difference for consumers is that they would decide when they are done with a title, rather than it expiring or limited them to one play on one device, as is the case for Microsoft’s Windows Media rentals for the Xbox 360 Live service. It would also be possible to sync iTunes’ slots to mobile devices, as iTunes already manages their library sync. Those devices would “loan out” the item in slots, and return them to get new items,” Dilger writes.

Dilger takes a look at what’s involved in the complex world of digital rentals and how Apple could deliver workable iTunes rentals in his full article here.

[Thanks to MacDailyNews Reader “Billy” for the heads up.]

16 Comments

  1. Actually, I rather like my scheme for it:

    $1 a day movie rentals, up to the cost of the movie.

    Rent the movie, watch it, and “return” it the same night, it’s $1. After 24 hours, it just bills another $1 to your credit card. And so on and so on until you either “return” it or you reach the cost of purchase (at which point, you own the movie).

    No changes to FairPlay necessary.

  2. The problem with that is there’s no delivery time to place a natural limit on how many movies you could watch. One could watch a hundred movies a month, even on 2 slots. I have a better way. You get a movie a day per month. If you rent two in one day, it gets taken from a future day, but if you don’t rent one day, it doesn’t get credited to a future day, but rather you simply lose it. I have a 3-movie at a time subscription to netflix, and if you time it, you can watch a movie a day for 15 a month, which is basically 50 cents a rental. Not bad a-tall.

  3. I like Peter’s idea. @Derelict: of course, you could watch 100 movies a month, but you’d have to pay $100. How would that hurt the consumer or Apple? My only problem with Peter’s idea is that I don’t think the movie studios would agree to that plan, considering that most people would probably be sure to watch movies when they get them and they’d only make $1. A more practical proposal might be $2 or 3 for the first day and $1 extra from then on.

  4. Obviously, if Apple does video rental, it will be the 100% online version of NetFlix. But the main advantage will be not having to wait several days for the U.S. Mail to return and deliver movies.

    I’m not sure if the concept of “slots” applies. Users can still set up a queue of movies they want to watch so that several are pre-downloaded. iTunes can simply not allow access to the next movie until the previous movie is marked as “returned” (and is therefore no longer watchable). If the movie was further sync’ed to an iPod, that iPod would have to be connected in order to “return” the movie, or if Apple can negotiate some flexibility from the studios, that movie on the iPod would remain watchable until the next sync. I don’t see the point in making things more complicated by being able to have three movies at a time, when the next movie is accessible immediately. That’s just a feature to account for the time it takes to mail the disks.

  5. All great ideas. But for video rentals to be successful, two criteria must be met:

    1) Quality must be excellent on a normal big screen TV. (Most people don’t watch rented videos on their computer monitors).

    2) Time to download a rental of the quality required in #1 must be less than the time to get off my ass and drive to Blockbuster and back.

    If you can meet criteria 1 and 2, Apple’s got a winner; assuming, that is, the studio boneheads don’t screw it up.

  6. @ 84 Mac Guy

    > Most people don’t watch rented videos on their computer monitors

    For many folks, the resolution on their computer monitor is significantly better than their TVs.

    And #2 won’t be an issue. iTunes can pre-download the top few movie files on the user’s queue and simply control when each file is accessible. Therefore, if the studios will agree, the movies can be HD quality, which will resolve #1.

  7. ” But the main advantage will be not having to wait several days for the U.S. Mail to return and deliver movies. “

    The other advantage would be not having a movie ruined 3/4ths of the way thru it because the disk is so damaged that all three of your dvd players cant play it to completion.

  8. “Oops. Lost my iPod with a video rental… There goes a rental slot permanently.”

    Do you honestly think they couldn’t figure out how to overcome that in the software? I mean, are you serious?

    If you sell a computer that is currently using an iTunes license and you forget to deauthorize it, all you do is deauthorize all, and then reauthorize your remaining computers.

    See how easy that is?

  9. Peter,
    Your idea would place a stiff penalty on forgetful people.
    As a busy, procrastinating and yes, forgetful person myself, I really like Dilger’s idea of a keep-it-until-you-swap-it system.
    Cheers,
    DG

  10. I’m wondering what will happen to my neighborhood cable bandwidth when everyone is downloading movies. I can already see a
    performance drop during peak usage periods. Probably have to get dialup again to check my e-mail. Arrrgh!

  11. We’ll all encounter a conflict-of-interest with cable-based Internet services, that also sell PPV movie rentals. This will become a big problem. They already are positioning themselves to cash in and control the Internet for this use. Comcast Internet (6 Mbits p/s service) puts a monthly bandwidth download cap on accounts and cuts off users whose data downloads exceed a “norm.” Comcast refuses to define the actual bandwidth limit in writing though because it varies with each spectrum-starved franchise they operate, but it’s based on the percentage of overall bandwidth you use compared to others. Surewest Digital, a competitor that operates a regional, but more advanced FTTH (fiber to the home) Internet/TV/Phone service in the Sacramento area has the following Internet bandwidth (download) caps:

    SERVICE/CAPS
    1 Mbits: 40GB
    3 Mbits: 40GB
    10 Mbits: 75GB
    20 Mbits: 150 GB
    50 Mbits: 400 GB

    The cable companies plan to cast aside net neutrality and take a piece of the pie if you opt to purchase movies from someone else. So, I’m trying to figure out what other Internet service would be a better fit in the future to eliminate this conflict of interest.

  12. I love the idea of online rentals and have been an advocate since the beginning of AppleTV. But I agree with people here–I’m not sure we have enough bandwidth at this point to make it work. Especially if you want to make it HD (720p). Somehow you have to be able to download it fast (like less than an hour as opposed to *hours*) and not clog up the ISPs. Is this even possible? Anyone know?

    If Apple can solve these issues I’m all over it.

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