As Macworld has reported, Apple has failed to meet their target of 1000 standard definition rentals and 100 HD rentals, that they claimed would be available by the end of February. While the number of HD titles available via Apple TV is pretty close to the promised figure, 91 according to Macworld, not all of these films offer DD 5.1, which was one of the hyped HD features.As for regular rentals, by Macworld's calculations, around 400 titles are available (my own calculations show 417), which isn't a substantial increase from my own calculations back in January. The total number of available films, for rent or purchase, available via iTunes is teetering around 800 by my calculations. Clearly, this is well short of 1000 titles.
So the question becomes, why is there a delay? Some of the editorials that have appeared online seem to take the position that Apple failed to meet predictions in part because of delays with the Apple TV software. While I could see how that might affect the number of available HD titles (and remember, HD titles are much closer to meeting expectations than regular rentals), this just seems too convenient.
It has also been inevitable that parallels be drawn between the number of available movie rentals and the delays with the iPhone SDK, as if there is some sort of pattern in Apple not meeting expectations. To me, this makes absolutely no sense. As far as I can tell (and granted, I'm no expert), the iPhone SDK is wholly unrelated to iTunes and the iTunes rentals. The fact that both systems have had logistical problems with roll out is unfortunate, but I can't see how they are either related or indicative of a trend.
So what's the real story? While I doubt we will ever get a definitive answer, I think Ars Technica has the most plausible theory: licensing issues with the movie studios. It's no secret that the studios have been reticent to fully embrace digital distribution. Personally, I think the fear that digital rental sales could cannibalize home video sales is understandable. Home video attributes for a huge amount of the studios return on investment and embracing one model at the risk of another must be scary.
Plus, it is clear that Apple had to cede to the studio demands just to get the rental agreements in the first place. True, all the major studios are represented, but certain production companies still have the right to refuse to appear on iTunes. Apple also conceded to flexible pricing and a 30-day exclusive DVD window (if the studio chooses to invoke it). Apple does not possess the power they have in music sales in the video space, as such, I find it more than plausible to believe that they are more at the studio's mercy for when films will be available and on what terms.
Undoubtedly a large library was one of the keys to iTunes' success in music. It is crucial that Apple achieve something similar if they want rentals to succeed. It's easy to blame Apple for dropping the ball, but in this case, I really think this is something that is out of their control.
[via Ars]
Reader Comments (Page 1 of 1)
3-04-2008 @ 1:15PM
atuck said...
"As far as I can tell (and granted, I'm no expert), the iPhone SDK is wholly unrelated to iTunes and the iTunes rentals."
Woah now, the iPhone SDK is embroiled with iTunes, as it is the system through which Apple plans on distributing (and charging for) these Apps. It could very well be that factors on both ends are causing mutual delays. It could simply be a payment problem, security issue, etc. Now, I too am guessing that studios are not helping this process along, but to say that the SDK couldn't be related to iTunes-based problems seems a bit negligent. There has been quite a bit of speculation to the contrary (that the distribution system that is contributing heavily to these delays.)
I gotta say that the two delays based around iTunes, the nearly missed deadline of Time Capsule, the oddly late iphone updates and notebook refreshes that really should have all been present at MacWorld, speaks of a problem with getting things done on time (not to mention our delay with OSX 10.5).
Just my 1 cent
Reply
3-04-2008 @ 6:18PM
Scott Reynolds said...
What, precisely, is a "nearly missed" deadline? Either you make the deadline or you don't... or am I just being naive?
3-04-2008 @ 1:18PM
ThinkDfferent said...
Why have the UK been left out of movies? who cares in britain if they are not HD, we just want to buy some!!
Think Mark
Reply
3-04-2008 @ 1:20PM
Christina Warren said...
Oh that's totally the studios! The semantics of international buying/renting agreements are really, really complicated.
3-04-2008 @ 1:34PM
ThinkDfferent said...
Utterly Ridiculous. International buyers get the burn from everything. Moving to Cupertino, CA lol
Think Mark
Reply
3-04-2008 @ 1:44PM
David Chartier said...
Sorry to nitpick, but it's Ars Technica. :)
Reply
3-04-2008 @ 1:57PM
Christina Warren said...
D'oh! There goes my shot at "proof reader of the day" -- thanks David!
3-04-2008 @ 1:49PM
JD said...
The first rule of Steve Jobs is, if you can't do it right, don't do it. So far, it looks like they should have held off until they could do it right.
Reply
3-04-2008 @ 2:55PM
David Chartier said...
That rule can't always apply. Apple, and any company who wants to offer a digital delivery store like iTunes Store, is at the mercy of the content creators and owners. Considering that these studios more or less rule the world of entertainment (at least in the US), that means there's a lot of politics involved.
Wal-Mart—the world-wide leader in DVD sales—was able to exert pressure on the studios to force Apple to raise the base price on many movies available for sale. The studios themselves also aren't ready to cannibalize the lucrative sales of DVDs either, and they simply aren't comfortable with digital distribution just yet.
Sometimes products like the iTunes Store are more akin to an experiment than a polished, "finished" product. The studios were perfectly happy to stick with optical media like CDs and DVDs, and Apple is helping to drag them into the 21st century models of digital distribution. That isn't easy, and it can't happen all at once.
These things take time, and a lot needs to be proven to these studios before they make a larger commitment to these new models. After all, rampant piracy of music and video on the web isn't exactly an incentive to offer up entire catalogs to the iTunes Store, no matter how secure DRM may be or how willing consumers are to start buying 1s and 0s (going further, the constant "DRM doesn't work cuz we can just strip it out!" rants don't help either).
For now, Apple's stuck with what the studios are willing to provide. At that point, it's more of a "do what you can *with* what you can, or go home." As happy iTunes Store customers, I think we can agree that it's a good thing Apple chose the former option.
3-04-2008 @ 10:06PM
JD said...
So when does the rule apply? At time X, when one has a semi-good product that is ready to go, why not just release that product instead of waiting until the product is fully polished? That's what Microsoft always does, as a matter of policy -- better to start now with something unfinished, they reason, since the momentum outweighs the bad publicity. Had Apple followed that logic, we would have gotten a crappy iPhone two years ago, along with quite a lot of other semi-good products.
I'm actually not asking rhetorically; I'm interested in what you think the underlying principle is. Is it something about digital media, that requires starting now before the content is actually in place? And why is this different from physical products? Either way, Apple's gloss is marred.
(And speaking just for myself, I thought that the iTunes music store started out quite nicely, full of content, unlike this movie limp-start.)
3-04-2008 @ 1:52PM
Galley said...
I blame the movie studios and the record companies for the downfall of society; oh, and Microsoft, too.
Reply
3-04-2008 @ 1:58PM
Hugo Chavez said...
"It's easy to blame Apple for dropping the ball, but in this case, I really think this is something that is out of their control."
Nonsense. If Apple felt studio reticence would materially effect the ability to execute, they should not have concluded an agreement. Give the studios record, who would believe them?
Don't expect to sleep with swine and not smell like pig shit.
Reply
3-04-2008 @ 3:00PM
NutMac said...
To me, fear of cannibalizing video sales is unwarranted. If anything, DVD rental is more detrimental to their bottom line (illegal ripping of rented DVD).
Reply
3-04-2008 @ 4:03PM
YodaMac said...
Clearly any delays with movie rentals on iTunes HAS BEEN and will continue to be from the Studios. For all the above mentioned reasons they have no incentive to whole-heartedly back online rentals/purchases anytime soon. (unfortunately for the consumers)
Apple has FINALLY managed to forge a deal with the unwilling Hollywood Execs. and have gotten their "foot in the door" with AppleTV rentals. Just how far they can push forward from here will determine whether AppleTV Take 2 is a success... or an AppleTV "Strike 2!" failure.
But the desire for a complete online library of all media is surely Apple's goal, and any delay getting there is obviously the fear and greed of those who hold tightly to the power they have today.
Here's to the future... :)
Reply
3-04-2008 @ 4:21PM
matthew said...
"Apple has failed to meet their target of 1000 standard definition rentals and 100 HD rentals, that they claimed would be available by the end of February "
Seriously. Put up another strike for "Obvious and uninteresting Apple Posts" on TUAW.
Apple's iTunes Store is a conduit for media. Period. Address complaints to the owners of the intellectual property if you think someone has failed.
I'd also add that iTunes is not a new experiment. It's too early to draw any conclusions about the future:
Music inventory had a slow build up when it first launched. Some music genres had a slow build up.
Movie inventory had a rather slow build up.
Rentals are having a comparatively slow build up.
All drew criticism.
Apple is in media for the long-term. iTunes Store is not a promotion. It's an integral piece of Apple's business.
Direct the discussion towars the owner(s) of the intellectual property, if you must, but at least give the process several years to reach its potential.
Reply
3-08-2008 @ 3:42PM
Scott Reynolds said...
Did anyone check the "All HD" category from an Apple TV Take 2, to verify the HD count? I remembered seeing 17 rows (plus a handful more) on February 15th. This weekend I decided to double check and sure enough, counted 17 rows of 7 + 5. That's 124 HD movies.
My question is: did Macworld use iTunes to try to answer this question, an Apple TV Take 2, or some other method? I don't have much confidence in their numbers.
Reply