Apple jumps to rentals


UPDATED 1:46 p.m. PT Jan. 15

Related story: Apple plan is a Blockbuster

NEW YORK -- Steve Jobs' eagerly anticipated Macworld keynote lived up to the hype Tuesday as the Apple co-founder, chairman and CEO announced that movies from every major studio would now be available for rental on iTunes.

During his annual speech in San Francisco, Jobs revealed that his company had reached agreements with 20th Century Fox, Disney, Warner Bros., Paramount, Universal, Sony, MGM, Lionsgate and New Line to make movies available to rent through Apple.

Fox Filmed Entertainment co-chairman and CEO Jim Gianopoulos joined Jobs on stage to make the announcement.

A portion of this deal had been rumored for several weeks when word first spread that Fox would put its films up for rent on iTunes. Disney also was thought to be part of the pact because of Jobs' relationship with that studio.

The rental store will launch immediately in the U.S., and Apple will charge $2.99 for library titles and $3.99 for new releases, which will be available 30 days after they're available on DVD. Older high-definition films will rent for $3.99 with new releases priced at $4.99.

By the end of next month, more than 1,000 films will be available, with 100 of those in high definition. Once rented, a consumer will have up to 30 days to start watching it and 24 hours to finish it.

An international launch is expected this year.

Paramount Pictures Digital Entertainment president Tom Lesinski called the deal a "milestone" and revealed that his company and Fox were the first to agree to the rental model. He called iTunes an "elegant" platform and said he was thrilled that the other studios joined up to make a complete digital storefront.

"All the solutions before this weren't quite right," Lesinski said. "Now, with every major studio and all the content you could want, there's no more excuses that we could make about the potential of this business."

Before the announcement, Disney was the only studio to sell new releases on iTunes. MGM, Lionsgate and Paramount made older available for purchase through Apple.

Lesinski said new Paramount releases still would not be on iTunes, but he said he's "optimistic" that new titles could be sold through Apple soon.

"Now that this relationship is getting cemented across the studios," Lesinski said, "over time you're going to see all the different business models available through Apple."

Forrester Research analyst James McQuivey said that, though this was a smart move for Apple and would beneficial to iTunes customers, it is not "revolutionary."

"The impact on the market will be moderate," McQuivey said. "All of it's the right decision for Apple, but none of this will suddenly alter the market the way iTunes did with music."

He noted that the digital rental business model has already been established by companies like CinemaNow and Movielink. Because Apple was not creating a new industry standard with the service, McQuivey said, the tech giant finds itself in the unlikely position of being more a market follower than leader.

"Normally Apple tries to bring everyone to their side," McQuivey said. "All of that is well established and has been going on for several years now."

Jobs also introduced software updates to Apple TV, which was first announced during last year's Macworld keynote and has failed to live up to expectations. The new version will now be available to use without a computer.

Users will be able to download videos from Google's YouTube and to sync up iTunes content from their computer to their TV using the device. Apple TV also will be outfitted for the new Apple rental store with films, HD included, able to be downloaded straight to the device and then sent to the TV.

Jobs introduced the ultra-thin MacBook Air during his keynote as well and demoed new software available for the iPhone.

Apple and 20th Century Fox also introduced Digital Copy for iTunes on Tuesday. This will give consumers who purchase a Fox movie a free digital version of that film that can be transferred to iTunes and then played on compatible formats.