By Richard Menta 1/20/08
Will consumers embrace video rentals from iTunes in large numbers or will they be somewhat indifferent to it as they have been with the idea of renting music, a concept the major record labels have been trying to foist on digital music distribution these past several years to middling results? Where I seem to differ from many of my esteemed peers, as I will detail in a moment, is that I don't feel the movie and music industry are bound under a similar digital rule set. Digital market rules that are very much in the formative stages and rely heavily on how people have used these two rather diverse media historically.
I have held a number of conversations with Digital Music News Publisher Paul Resnikoff where we have touched on the matter. Paul's thoughts fall along the same line as mine, though he adds a pragmatic "believe it when we see it approach". Fair enough, the highway to digital media Shangri-La is strewn with the corpses of ill-conceived and half-baked digital enterprises. There were also some pretty good ideas in that mix where failure came due to weak capitalization, poor execution, or to mis-directed pressure from media conglomerates.
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From these digital ashes rose Apple, who were the only ones capable of taking the mercurial requirements of the media owners and hammering out successful business model around it. Thanks to iTunes pairing with the iPod, Apple did this so effectively that in the digital music arena the goodwill iTunes established with the major labels for finally making download song sales work was quickly replaced by animosity as Apple garnered such power it called all the shots. It is this very reason why the movie industry held Apple and iTunes at arms length for so long, a move that only strengthened the position of BitTorrent, its clones and the myriad of trackers that serve the mass sharing of movies.
Time has made everyone more amenable. Apple needed to offer more video content to iPod owners. The movie industry could no longer wait for a workable online distribution mechanism. Movie sales on iTunes proved lukewarm, but movie rentals holds reasonably strong promise.
I say reasonably strong because consumers have been renting movies for thirty years now. They rented VHS tapes, they rent DVDs and they rent through cable TV on-demand services. Movie rentals are something the consumer is very comfortable with. In contrast renting a music track is a foreign one to the average music lover, despite the fact that this is exactly what several decades of sticking a dime in the jukebox is. Of course, the jukebox is tied into the social element of playing a favorite tune in a public place. This social element is critical in, say, a bar where every patron chooses to pay for a single beer in public what they pay for the six-pack they enjoy at home alone.
Saul Hansell asks in his January 17th NY Times article Where Is Apples Rental Service for Music? The answer is it is something that may never come. There are dozens of differences between music and film that dictate how we as patrons best find to consume them. Popular music runs just a few minutes long and are enjoyed through many repeated listenings over a short period of time. Movies are much longer and while they too are subject to repeat viewing the frequency is not at the level of music listening.
On a technical level music files are much smaller and a lifetime collection of tunes can be stored on a single iPod. It's convenient to collect digital music for keeps. Movie files are considerable larger and this brings about greater challenges to not only offer reasonable download speeds, but to satisfy long term storage requirements. These challenges certainly don't stop people building large movie collections, as the torrent sites prove, but it make movie rental more palatable to those who are simply more interested in watching than collecting.
Despite the myriad of digital audio codecs out there the MP3 format has evolved into the defacto standard, hence why no digital audio portable can succeed without supporting it (as Sony learned the hard way). Meanwhile, there is no one dominant video codec with several flavors of AVI and DIVX floating in the online ether and MPEG-4 h.263 incompatible with h.264. The end result is that extra effort is needed by those who file share to find a version of a movie that will play direct to their portable video player. As Thomas Mennecke points out in his January 10th article Finding and Importing Videos on your iPod "not too many individuals have their video collection already encoded into the MP4 format". For those using the most popular digital media portable a transcoding application becomes a necessary evil. Direct play gives the iTunes rental service a genuine competitive advantage over file sharing (another competitive advantage is the quality of the download iTunes offers is consistent), though DRM and the 30-day perishability of the files aim at an audience very different from the hard core Pirate Bay minions.
Apple announced at Macworld last week that it sold 4 billion music tracks since iTunes first appeared. Even though this is a drop in the bucket compared to what is shared online the venture is still a profitable one for Apple. Apple doesn't have to beat file sharing to succeed, it just has to draw enough patrons to generate a healthy revenue stream and some profit. Since Apple doesn't license its codecs, the road to the iPod is again closed unless the movie studios allow Amazon to sell DRM-free movies, an unlikely outcome at this point.
Renting From iTunes
To rent movies from iTunes required two software upgrades. First I had to upgrade my version of the iTunes application to 18.104.22.168. . Next I had to upgrade my iPod touch to version 1.1.3. Once this was completed I picked a movie to rent. Rentals for a standard definition file cost $3.99 for a new release and $2.99 for a back catalog title. Those who wish to download an HD title can do so for a buck more making it $4.99 new release and $3.99 for older fare.
As I was in the mood to see the Simpson's Movie I selected a new title. Choosing an animated film over live action fare was not an issue for me. Digital movie downloads have built-in compromises already, so I was less concerned with the ability of iTunes and the iPod touch to perfectly reproduce color and skin tone than I was with the overall clarity of the picture.
I started to download the Simpson's Movie at 4:38 in the afternoon. The file was nearly a gig in size coming in at exactly 967.2MB. By 4:58 iTunes had delivered 685MB and by 5:06, 28 minutes later, the download was complete. Is 28 minutes fast? Is it slow? That depends on your expectations. I can run to the local video store and pick up the DVD in that time. I can also rent the movie through my Comcast on-demand service, which gives me access to the film immediately, but with no mobile option. I had no problem with the download process, which was simple as pie. I also had 30 days from which to view the film and was in no rush, so the download time was more than reasonable for my needs.
After the iTunes file was downloaded to my PC next came the process of syncing it to my iPod touch. Just hitting the "sync" switch under the iPod devices Summary tab won't transfer the movie, though. This confused me for a moment until I hit the Movies tab where I was given the choice to move the film over to the iPod or keep it on my PC to view. iTunes does not allow a workable copy to simultaneously exists on both PC and iPod, this way once a film is viewed the other copy can't be saved for a later date. I had 30 days to view the movie and once I started the file I had 24 hours to complete it before the download became inactive.
Transferring the film from iTunes to iPod was pleasantly quick, it only took 4 minutes to move the near 1GB file. When I hit video in the navigation menu there was the movie under a heading for video rentals. The listing showed the Simpsons Movie logo and text that stated I had 30 days to view the file. When I clicked on the file a pop up menu reminded me that once the movie begins to play I now only have 24 hours before the file expires. Once the file is opened it is chained to the iPod, I am unable to transfer it back to the PC to view. The question I asked myself is why add the additional limit of 24 hours to watch the film? Why not let me have the full 30 days? The answer might be they plan offer this option in the future - for an additional charge.
Overall, the visual quality of the file on the iPod touch was excellent. So was the audio quality, which frankly bested most of the music files I have on my player. That's it. There is not a lot of need to go into the minutia of the technology, because Apple kept everything blessedly simple with satisfying picture quality. That's how it should be. It may not be enough to draw an iPod-toting Mininova junkie, even if they do delete everything after they watch it, but the average iPod user willing to pay for content now has a cheaper alternative to fifteen-dollar movie buys.
If Apple does have trouble getting users to rent movies from iTunes you can't blame it on their execution. Movies were easy to download to the PC and - once a brief confusion over the proper transfer/sync method was figured out - moved to the iPod. Picture and audio quality of the download were excellent. It's this basic simplicity of the consumer experience that will go a long way towards Apple's success in movie rental business. Of course, it takes something considerably complex underneath to achieve buyer ease on the surface and this is where Apple excells where others flounder.
Whether iTunes succeeds in this latest venture waits to be seen. History shows
people rent movies and Apple just has to get users to consider iTunes among
their many rental options. The service works smooth enough to be compelling
and the rental scheme has finally drawn enough hold-out studios to finally allow
Apple to accumulate a decent-sized library of titles. As for the rent versus
buy debate, with movies its easier to make a $3.99 impulse rental from iTunes
than the $14.99 purchase. This price point should prove somewhat acceptable
to those who already regularly rent (though without the overhead of a Blockbuster
store that price could and should be considerably cheaper. I
suggested a buck for an online movie rental back in February of 2002). Jobs
hopes movie rentals will give AppleTV a boost too, though users whose cable
system offers pay-per-view have no need for it, including Comcast subscribers
who just saw pay-per-view prices rise to $4.99 a movie.
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