The Financial Times’ Matthew Garrahan has this scoop today about Apple’s plans to launch an online movie rental service, which aims to go head-to-head with cable’s growing VOD business.
The films will supposedly sell for $2.99 for a 30-day rental period (this price has to apply to older films…my guess is that newer movies would be priced much higher and a 30-day rental window seems kind of nutty). The video will come embedded with DRM technology but customers will be able to transfer the downloaded material to at least one other device, such as an iPod or iPhone.
Apple’s iTunes service already sells films for downloading, but the selection is pretty thin and rarely includes recent blockbusters, with the possible exception of films from closely-aligned Disney, because studios fear cannabalizing their lucrative DVD business. The iTunes rental service, supposedly slated for launch this fall, could include top box office hits from all the major studios, much the way traditional video rental stores do.
In a sign that Hollywood has officially moved past its instinctive distrust of all-things-Internet, the studios are “excited” about Apple getting into VOD, although why that might be the case isn’t clear to me. Aside from the traditional concerns over the effectiveness of Apple’s DRM technology, Apple under Steve Jobs has a notorious reputation as a hardball negotiator (just ask the record companies).
Moreover, the portable video-capable device market is dominated by Apple today through the iPod, a level of power that will only intensify wildly if the much-awaited iPhone proves to be an unstoppable success. Giving consumers the ability to watch movies on their iPhones will, in turn, help propel sales of the costly gadgets, further cementing Apple’s status as top dog in the gear-oriented entertainment era.
Apple’s power should give the studios great pause before they agree to hand over their crown jewels to the Cupertino-based giant. However, reading between the lines of Garrahan’s piece, it sounds like Apple is willing to give Hollywood a bigger revenue split than the film industry has been getting from cable’s VOD service. That alone could explain the studio’s sudden warmth toward Apple.
There’s no doubt cable figures prominently in the calculation. Apple’s new service will “compete against cable companies and anyone else offering VOD into the home,” a studio exec is quoted as saying.
All of this hubbub may be premature. The WSJ is splashing a bit of cold water on the idea. According to the Journal, Apple is “aggressively pitching” the idea and some studios, such as Unversal, are opposed to it. “The service is far from a certainty with several details to iron out,” one insider said.
Posted by Cynthia Brumfield at 11:31 PM | Print | Comments (0)
Two arms of the U.S. legal system took diametrically opposed approaches to online privacy this week. First, a federal judge requested that P2P service TorrentSpy begin creating logs of its users’ activities in order to create a record for the MPAA, which is suing TorrentSpy.
One key problem is that this order violates TorrentSpy’s privacy policies. But the more troubling ramification is that the order could set a precedent for other courts, which could in turn force other Internet-related companies to track user activity to create a record for lawsuit plaintiffs. As EFF’s Fred von Lohmann said “We shouldn’t let Web site logging policies be set by litigation.” TorrentSpy is appealing the judge’s order and the user tracking is on hold for now.
On the other end of the privacy spectrum is a spyware bill passed by the U.S. House of Representatives this week. The Securely Protect Yourself Against Cyber Trespass Act, which passed the House on Wednesday by a vote of 368 to 48, would, among other things, make it illegal for web sites to take control of computers to send unsolicited information and would further make it illegal to collect personal information without first gaining the user’s permission.
The Direct Marketing Association and other business groups have decried the bill as overly restrictive claiming that its scope would make such things as targeted advertising or cookies illegal by requiring web sites to get a user’s permission every time a user’s history is tracked. (If this in fact is how the legislation would play out, we’re all in trouble because I don’t know any web site that doesn’t use cookie-based tracking programs to quantify, at the minimum, visitor traffic.)
The EFF, on the other hand, doesn’t like the bill because it’s not as strong as some state-level privacy laws and it would take away the rights of private citizens to sue spyware companies.
Posted by Cynthia Brumfield at 10:07 AM | Print | Comments (0)
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