What Jobs DIDN’T mention about iTunes subscriptions: Movies - Macenstein

What Jobs DIDN’T mention about iTunes subscriptions: Movies

Posted by Dr. Macenstein

Earlier this week, Reuters asked Steve Jobs whether the iTunes store would ever adopt a subscription based approach to music instead of Apple’s current purchase-only model. “Never say never, but customers don’t seem to be interested in it,” Jobs said. “The subscription model has failed so far.”

Quite right. However there is one area of the iTunes store where there can be no doubt that a “renting” model has worked for decades, and that is the home video business. Companies such as Blockbuster and Netflix do quite a nice business providing movie rentals, and the idea of moving that rental (or “subscription” model) to the movies section of iTunes makes a great deal of sense.

First of all, the movies Apple sells are not quite DVD quality. Movie enthusiasts, the kind who enjoy BUYING all their movies, are very much into the pristine video quality, DVD extras, and surround sound capabilities of a DVD. At the moment, those people are not likely to pay close to full price for a movie on iTunes when for a couple bucks more they can own the real thing. Those people would be more likely to join an iTunes subscription service for movies, and use it as a test drive to see if they like a film before purchasing it on DVD.

Secondly, Apple’s new Apple TV could quickly become an indispensable part of the average family’s living room if it offered an on-demand Blockbuster experience. A model similar to Blockbuster Online or Netflix where for $14.95 a month you could download up to 6 movies a month would be very attractive to some, and help spur sales of the Apple TV as well. In this day of instant gratification, sometimes waiting 2-4 days for your next movie to arrive in the mail can seem like an eternity to Netflix users, and many would like to see their Apple TV automatically download the next selection in their queue when they finish watching a film.

Obviously smarter people than me at Apple must have thought of this, and for the moment chosen not to pursue this route. Or perhaps they are heading in this direction and the delay has to do with striking a deal on revenue splits with the movie industries. Whatever the reason, I predict in one year’s time movie subscriptions in iTunes will become a reality, and the Apple TV (or Apple TV 2.0) will become the indispensable home theater device Apple intends it to be.

10 Responses to “What Jobs DIDN’T mention about iTunes subscriptions: Movies”
  1. MacIke says:

    The only problem with this format when competing against Blockbuster is what I use Blockbuster for.

    I rent all the movies that my local area does not have – lots of history and documentary. I can then return them to the local store and get the free current movie rental. Two for the price of one.

    Apple is not about digitize all these movies I would like to rent. Blockbuster has a good racket going.

  2. Ebert or Roeper says:

    I’d love that. But i’d hope you could also watch them on a MacBook, not have to buy an Apple TV.

    I think that’s got to be Apple’s eventual plan with the Apple TV. An on-demand set top box for movies, and hopefully music.

  3. Ebert or Roeper says:

    MacIke, I don’t know. There is a LOT of crap on the iTunes store that I think maybe sells one copy. Like the NBC specials, the PBS documentaries, the A-Team episodes etc… I think you would find TV studios and movie studios would flock to this model, because once they pay $50 to compress a show for iTunes, everything is profit. No packaging costs, delivery, promotion. Just throw it up on iTunes, and eventually someone will buy it. There are a ton of people in this world and a lot of them like obscure shit they thought no one else did.

  4. WE NEED HD on iTunes! says:

    Apple, PLEASE rent HD movies on iTunes and we will buy Apple TVs, one for each tv in our house!

  5. Preston says:

    “However there is one area of the iTunes store where there can be no doubt that a “renting” model has worked for decades, and that is the home video business. Companies such as Blockbuster and Netflix do quite a nice business providing movie rentals, and the idea of moving that rental (or “subscription” model) to the movies section of iTunes makes a great deal of sense.”

    There’s a difference between paying Blockbuster once to rent a movie for a weekend and an iTunes subscription where you’re paying for the rest of your life or else you lose access to your music collection. Unfortunately, the press has been interchanging rentals and subscriptions when they’re not the same.

  6. TK421 says:

    Preston, that’s the point. I really wouldn’t care if I had a subscription to movies, and when i stopped paying, they went away. I hardly ever watch a movie more than once, but music is different. Movies are like jokes, great the first time you hear it, less great when you know what’s coming. iTunes movie rentals is a great idea.

  7. macbones says:

    I’m thinking an on demand service is where they will go. They are already demo’ing/ perfecting this with the trailers section & folks don’t realize it. The trailers seem to work pretty well, and are HD, no? I’m thinking folks will be able to subscribe to several “streams” per week, kind of like a netfilx. You can watch a stream as many times as you want, but only have, say 2 or 3 “open” at a time, and up to say, 3 in a weeks time. Watch half tonight, come back to the other portion tomorrow. Once you close the stream to access another, you use one of your subscription credits for the week or month. That way, it’s not like you have 24 hrs to watch once you start, or something lame like that.

  8. Dave says:

    I can’t believe no one has pointed this out yet. There is no way anyone pays for a subscription to a store that carries movies from only 3 studios. There are 500 movies (and 350 TV shows). Not enough to make a subscription viable.

    A rental option (big difference between rental and subscription) is entirely feasible… as long as you have more that 24 hours to finish once your start watching.

  9. Anonymous says:

    I agree with the author and with Dave. I think Apple is waiting to get more studios on board before launching this, but I think Apple movie rentals are definitely coming. There is really no other reason to sell the Apple TV. If the Apple TV had Tivo capabilities, it would make more sense, but I think realistically it is designed to work as an on-demand movie rental box.

  10. I think this would be an excellent idea to promote the Apple TV ( every time I type that I want to call it the iTV). I agree with dave though they need to build up their selection before anyone could really be happy with subscribing.

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