Report: Apple nearing iTunes video rental deals with Warner Bros, Paramount, Lionsgate

“It has been Hollywood’s worst-kept secret: Steve Jobs is starting to win over the film industry,” Ronald Grover reports for BusinessWeek.

“Jobs and most of the big studios are nearing compromise on key sticking points that have prevented iTunes from offering most of the new and old movie titles consumers see at Blockbuster, Netflix, and Wal-Mart Stores. Studio executives, forced into silence by Apple’s ultra-uptight nondisclosure agreements, aren’t talking, and neither is Apple,” Grover reports.

BusinessWeek has learned that Apple is close to nailing down agreements with most of the big studios, though not all may be ready to announce by the time Jobs takes the stage on Jan. 15 at the annual Macworld Conference & Expo in San Francisco,” Grover reports.

“A breakthrough with the movie studios could provide a badly needed boost for Apple TV, which has been roundly criticized for shortcomings beyond iTunes’ limited film selection. The device, which streams video and music on a home computer’s hard drive to a TV or home theater, suffers from poor audio and visual quality compared with rival products,” Grover reports.

MacDailyNews Take: Wrong. Apple TV’s so-called “shortcomings” stem from Hollywood’s refusal to allow iTunes to offer higher resolution content. Apple TV is capable of high definition video (H.264 and protected H.264 (from iTunes Store): Up to 5 Mbps, Progressive Main Profile (CAVLC) with AAC-LC audio up to 160 Kbps (maximum resolution: 1280 by 720 pixels at 24 fps, 960 by 540 pixels at 30 fps) in .m4v, .mp4, and .mov file formats, MPEG-4: Up to 3 Mbps, Simple Profile with AAC-LC audio up to 160 Kbps (maximum resolution: 720 by 432 pixels at 30 fps) in .m4v, .mp4, and .mov file formats) and supports audio formats AAC (16 to 320 Kbps); protected AAC (from iTunes Store); MP3 (16 to 320 Kbps); MP3 VBR; Apple Lossless; AIFF; and WAV. Feed today’s Apple TV with high quality content and that’s what you’ll see on your big screen.

Grover continues, “The Financial Times reported on Dec. 26 that Apple has already signed an agreement with at least one studio, Twentieth Century Fox, to offer rental downloads of its movies. Now sources tell BusinessWeek Apple is nearing deals with Warner Bros., Paramount Pictures, and Lionsgate to allow movie sales, rentals, or both through iTunes.”

“Sources say Apple plans to charge $3.99 a pop for 24-hour rentals,” Grover reports.

“Sources say Warner Bros. and Paramount are mulling agreements that would allow both sales and rentals. Fox has already agreed to offer both, but only the rental deal is set to be announced Jan. 15; the two sides are working out final details on the sales arrangement. Lionsgate, meanwhile, is considering a deal to let Apple also offer its films for rental. Even Sony, a longtime Apple rival in consumer electronics, is said to be contemplating a deal to sell its movies through iTunes. Among the major studios, only Universal, whose parent company NBC (GE) has yanked its TV shows from iTunes over a pricing dispute, is not discussing a movie deal with Apple, according to sources,” Grover reports.

“Jobs wants new movies available for download ‘day and date’ with DVD releases so that iPod users can rent them the same day the DVDs become available at… other rental venues,” Grover reports.

More details in the full article here.


  1. To be honest I don’t see anything moving me from my netflix type deal. Unless 24hr rentals are less then a quid it just isn’t worth it. If I wanted to see films urgently I would go to the cinema but I don’t, I wait for them to come on dvd and watch them at my leisure.

  2. 3.99 for movie rentals is way too much. If the resolution of TV shows is increased and writers go back to work I might start buying season passes. Otherwise, I’ll stick with Netflix for all.

  3. ” . . . only Universal, whose parent company NBC (GE) has yanked its TV shows from iTunes over a pricing dispute, is not discussing a movie deal with Apple . . .”

    It’s their loss.

    And a rental for $3.99 for 72 hours would be more reasonable.

  4. What’s happening with the market you ask? Presently AAPL is down $7.56.

    That’s right, MAC sheep, Bill Gates’ CES keynote clearly demonstrated Microsoft’s ability to innovate and deliver top quality, customer focused products is destroying any chance for Apple to succeed. Again. The market and 97% of computer users get it, I don’t know why you MAC lemmings don’t get it.

    Your potential. Our passion.™

  5. What many tech writers don’t realize it this only works with HD TVs. I was going to buy one until I read the specs and noticed it will not work with my good old standard TV.
    Until I and many others upgrade to HD TV, this is of no use. Once the tipping point of new TVs is reached, then this will sell.

  6. Really hoping this “24 hour rental” business is bunk. I should think it would not be too hard for Apple to create some kind of “queue” system along the lines of Netflix- keep 1, or 3 films as long as you like ’til you “return” them in iTunes. D.E.G. over at had a nice article recently about how it might work.

    Given how many hours it can take to download a film, 24 hours sucks. It seems very un-Apple to dictate such inflexible terms.

    Magic word: ball. “That which is now in Apple’s court.”

  7. Zune Tang®:

    So, why do your bosses at Microsoft feel it is so important to finance your Apple disinformation (and dirty tricks) campaign?

    Copying Apple’s hardware and software isn’t enough?

  8. Remember, once Apple’s downloads take off, your ISP (especially cable company Internet services) will be raising rates and/or enforcing caps on monthly download bandwidth. That $3.99 movie rental will cost more…

    It may be time to dump cable companies as Internet Service Providers…

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