In a Move Long Overdue, iTunes Rumored to be Finally Going Rental for Movie Downloads

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Monday - October 6, 2008

Timely analyst thought pieces on issues pertaining to digital media, home networks, and consumer electronics.

In a Move Long Overdue, iTunes Rumored to be Finally Going Rental for Movie Downloads
Author: Michael Wolf, Research Director, Digital Home
Mon, 11 Jun 2007 11:54:34 EDT

I've been talking about Apple's need to go rental for some time, and glad they are about to finally do it. The fact of the matter is that consumers don't want to buy a file instead of a DVD, unless its significantly cheaper (even cheaper than the Apple early-price of $12.99 for a new release) or if its something they just have to have in a highly portable format. Microsoft's Video Marketplace has seen some success with rental (Microsoft is, in contrast to Apple, basically rental-only for movies) and I figured it was only a matter of time before Apple did it.

The question for me is did they take so long because of Jobs' disdain for the rental model (well-documented for the music side), or were they waiting to negotiate a good price of $2.99? I think its probably a little of both. The $2.99 price is a dollar lower than the industry average of $3.99 for most movie download stores, so I think that's going to be a big advantage right there and likely make the other rental stores follow suit. It's unclear if Apple is losing money at this point in the game with that price (they certainly won't be making much), but overall the industry average price for a movie rental online will go to $2.99.

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