WWDC surprise: Apple to announce iTunes movie rentals
By Ryan Katz, Senior Editor
July 18, 2006 - With three weeks until Apple's Worldwide Developers Conference, Think Secret has learned exclusively that CEO Steve Jobs will use his keynote address to announce the debut of movie rentals through the iTunes Music Store. While the announcement will undoubtedly be billed as a further extension of iTunes' dominance in digital media downloads, it represents a coup for the movie industry, which will have succeeded in standing its ground against Apple's pressures to offer consumers the option of owning movie downloads.
Apple is said to have ironed out agreements with Walt Disney, Universal Studios, Paramount Pictures, and Warner Bros., and is currently in talks with other major movie studios as well. It's unknown to what extent content will be available come the August 7 announcement, or whether Apple will announce all of its studio deals at that time.
Because the movies will be rented to consumers and not sold, people familiar with the situation report downloads will be coded with a date stamp that will restrict playback. It is not known exactly how the coding system will work, but industry experts tell Think Secret that the software would likely either limit the number of playbacks or provide unlimited viewing for a period of time, after which the movie will be "turned off" and no longer available.
Apple's decision to implement a rental model for movies will be a major departure for the company and Jobs. Apple had been trying for months to persuade the movie studios that the a-la-carte model of buying individual titles, as the iTunes Music Store offers with music, was the way to go. The studios, however, have been fixed on offering only a subscription or rental-based model.
"We knew that Steve [Jobs] saw the rental model as the only viable option," a person familiar with the situation said. "We knew it was a matter of time before he signed on."
"The subscription business makes sense for everybody. We'll all make money. But more importantly, it's a different beast from music and no one—not even Steve Jobs—is blind to that," the insider said.
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