Are movie rentals in iTunes' future?

We’re a little more than two weeks from Apple’s Worldwide Developer Conference, and already the rumors are flying about what Steve Jobs plans to announce during his August 7 keynote (besides the already scheduled OS X 10.5 preview ). The hot rumor this week: ThinkSecret’s report that Apple will start offering movie rentals via the iTunes Music Store. The prediction moved from the rumor sites to the mainstream media quickly, as the San Francisco Chronicle, the Houston Chronicle, and others all picked up the story.

So will it happen? We have no idea. But we do have two editors, Philip Michaels and Jim Dalrymple, with very strong opinions about the rumor willing to hash out their disagreements in public.

Philip Michaels on why it won’t happen

The “iTunes to offer movie rentals” rumor is the sort of nice, juicy tidbit that Internet can really sink its teeth into. That it’s unlikely to happen should in no way dampen anyone’s enthusiasm for speculation.

How can I be so sure that this rumor will join the Apple-made cell phone in the Things That Are Not To Be column? Three reasons—one logistical and the other two philosophical. Let’s tackle that logistical problem first…


The Worldwide Developers Conference is not Macworld Expo. The audience for one Jobs’s Expo keynotes is made up of a cross-section of people—VIPs, developers, the press, but mostly Mac enthusiasts who cheer each product announcement with ardent fervor. It’s a different crowd at WWDC—developers, as you might imagine, who greet each announcement with their own brand of fervor but have decidedly different rooting interests from us civilians. These are folks who want to hear about under-the-hood developments, not consumer-oriented offerings. And guess which category an online movie rental service falls under?

Put another way, Apple has spent a considerable amount of effort promoting the fact that this will be a coming-out party for Leopard. And that’s what the people paying top dollar to attend this event want to hear about. I can’t imagine Jobs making them cool their heels for the first half-hour of his keynote while he outlines the intricacies of the content deals he just struck with Universal, Sony, and Disney. At Expo? Sure. At a special press event? Absolutely. But at a developers conference? No way.

As to the philosophical problems…


Everything new is old again. Right now if I want to a watch a movie, my cable provider offers me plenty of video-on-demand options. Or I can sign up for a Netflix account and have DVDs delivered to my door. Or I can pursue any one of a number of other options for renting movies that do not require me to set foot in a video store. So what does a rental service through the iTunes Music Store bring to the table? With the caveat that there may well be a detail or two that I’m just not grasping, I’d have to say “not very much that isn’t already there.” And Apple tends to shy away from that kind of blatant “me-tooism” with its products.

There is the portability factor, I suppose. Presumably, a theoretical movie rental from iTunes would arrive in a form that would make it easy to transfer to a fifth-generation iPod (or some type of updated iPod not yet revealed). That’s convenient, I suppose, but I think I’d still prefer to just buy my own DVDs and use something like Handbrake to convert them to MPEG-4. After all, unlike a rental, I own those files. Which brings us to the last point…


Why rent when you can buy? Have you always wanted to own a copy of Convoy, C.W. McCall’s paean to the American trucking industry? You can buy it at iTunes for 99 cents. Heck, get the whole album for $9.99 if that’s what you want. Or buy yourself that episode of Monk you missed, that a-ha music video that caught your eye, or that beloved Disney cartoon from you childhood. You got the cash? It’s yours . One of the things that separates the iTunes store from subscription-based online rivals is the promise that when you pay for something, it’s yours to keep; I think that’s one of the factors that’s allowed the iTunes store to enjoy the success it has.

But now when it comes to feature-length movies, we’re supposed to expect Apple to turn around and say, “Oh no, you don’t want to buy that. Renting is a much better way to enjoy multimedia. Except for music. And TV shows. And pretty much everything else we offer at this store.” Doesn’t that strike you as the tiniest bit antithetical to everything the iTunes Music Store is about?

You want a WWDC rumor, one that stands a chance of actually coming true? How about a new high-end Intel-based desktop? It’s one of the last remaining pieces of the transition to Intel chips, you know that it’s going to happen sooner rather than later, and the last time a pro desktop made its debut—the Power Mac G5—it happened at WWDC. Maybe it’ll happen, maybe it won’t. But it’s far more likely to excite a roomful of developers than the announcement that they can pay a couple bucks to rent, not own, Basic Instinct 2 .

Jim Dalrymple on why it will

Those are some fine arguments against this rumor. Trouble is, each one can be refuted, which I’ll do on a point-by-point basis.

The timing Sure, different crowds attend WWDC and Macworld Expo, but look at this on a larger scale. The world’s press will be in San Francisco next month to welcome the arrival of Mac OS X Leopard, so what better place for Steve Jobs to lay out his long-awaited plans for an iTunes Movie Store (or rental store)?

The Macintosh developers I know are some of the most enthusiastic Mac users I’ve ever met—they have supported the company through thick and thin over the years and sometimes it was only their belief in Apple and the products that kept them going. These are people that want to know that the platform is on solid footing, and, more important, these are the people that will develop new applications for whatever is rolled out at WWDC. Whether it be a Widget tracking new movies or an application like Delicious Library adapted to track movie purchases from iTunes, the developers will help popularize any new technology.

Typically, iTunes-related products are introduced in the United States first, so that excludes September’s Apple Expo in Paris from an iTunes announcement. There is no summer Macworld any more, so that leaves WWDC until Macworld in January. While a special event would be an equally good time to announce a movie rental program on iTunes, why wait when you have the whole world watching?

The availability of comparable services You could say the exact same thing about television shows and look how popular they are on iTunes. It all comes down to convenience—do I want to order a DVD on Netflix and wait for it to be delivered? I do not. Instead, I could go to iTunes and rent or purchase a movie. I’ll put on some popcorn, grab a Heineken, let the dog out and then settle down for a nice enjoyable movie. I can even call up and ruin the ending of the movie for you, while you’re still waiting for that DVD to arrive in the mail.

Buying versus renting I only watch concerts on DVD more than once, so I’ll probably continue to purchase the latest OzzFest DVD when it gets released. However, I don’t waste my money buying a movie DVD because I know I’ll never watch it. Let’s assume you can buy a recent movie DVD for $20 (a nice round number). Now let’s assume that a movie rental from iTunes is $4. I would much rather rent 5 movies from iTunes than go out and buy one DVD that I will watch once.

I don’t disagree that iTunes is successful in part because you can own the music or TV show. But more than that, iTunes is successful because of the iPod combination and Apple’s ease. (Incidentally, Convoy was one of the first songs I purchased on iTunes; the other was Crazy Train from The Blizzard of Ozz. My wife threatened to cut me off soon after that).

Is it a teensy bit contradictory to tout the merits of owning media on one side of the store while pushing rentals on the other. I’ll give you that. However, there are other factors at work here that need to be considered.

First, I don’t believe Apple has been as successful in convincing the movie industry to sell movies as it has been with either the television or the music companies and their wares. Everything is a negotiation, and if the best Apple could do to bring feature-length movies to iTunes is rentals, then I say bring it on.

Being first is really important; it will allow Apple to dictate the market much the same way the company did with music and television. Its market share in those two markets is outstanding—it now has the potential to do the same thing for movies.

And for all we know, there are other unannounced products that will pair up with a rental service—a new video iPod, for example, or (the product I really want to see from Apple) a digital media center. It would be great to sit down with my Macintosh media center, buy a movie and sit back and watch all from the comfort of my favorite chair.

Subscribe to the Apple @ Work Newsletter

Comments