Apple is reportedly planning to get into the movie rental business and license its digital rights management technology, and it could announce a deal within the next few weeks.
Both the Financial Times and The Wall Street Journal are reporting that Twentieth Century Fox Film has signed a deal with Apple to let iTunes users download new movies and keep them for an unspecified (but likely short) period of time.
Both reports say Apple CEO Steve Jobs will make this news part of his Macworld keynote on January 14.
You might soon be able to rent Fox's movies and put them on your iPod, if new reports come to pass.
(Credit: CNET Networks)The reports also says that as part of the deal, Fox is also going to use Apple's FairPlay digital rights management technology on its DVD releases, which would allow DVD buyers to rip their movies onto their computers using iTunes and also move those store-bought movies to iPods and iPhones.
Rumors of Apple getting into the movie rental business have been swirling all year, as it has become clear that the per-song pricing strategy that worked so well for Apple in the music business hasn't worked as well in video.
The movie studios want the same thing the record labels want--variable pricing, and more control over it--and people want the option of either buying or renting. There are lots of films I'd pay $4 or so to rent, but not $15 or $20 to buy.
Part of the problem, of course, is that only Walt Disney, which counts Jobs as a member of its board of directors, sells its first-run movies on iTunes. Adding Fox's movies would provide a significant boost to iTunes, not to mention a lineup of iPods that has been almost completely redesigned around making it easier to watch video.
This move would also have interesting implications for Apple TV. A rental service from a new movie studio would give Apple TV owners another easy-to-access source of entertainment to watch on their big-screen televisions. Right now, they're restricted to buying movies and TV shows on iTunes, or watching skateboarding bulldogs on YouTube, and that gets old.
But it might not just be movie studios that feel the implications of this deal, should it come to pass.
In February, Jobs wrote an open letter on DRM and music that contained this sentence: "Apple has concluded that if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies."
Apple's concern was that if FairPlay were licensed to outsiders, the encryption technology could quickly become public, and the company would be unable to keep up with those bent on cracking the code and ensuring unlimited usage rights for their songs.
However, if the reports are right, Apple has come to grips with the idea of licensing FairPlay in spite of those concerns. So is FairPlay now up for grabs? Licensing FairPlay to companies like Microsoft or SanDisk would allow the Zune or Sansa to play songs and videos purchased from the iTunes Store; right now, you can play iTunes Store purchases only on iPods.
In any event, it sounds like Macworld will once again involve more than just Macs. Apple's stock is at an all-time high, and it went up further Thursday on reports of the movie rental deal.
(Credit:
CNET Networks)
Apple may begin licensing its FairPlay digital rights management technology to third-party manufacturers in the near future--at least, that's the rumor. According to an unsubstantiated and unsourced item appearing at tech.co.uk, Apple plans to allow iPod-accessory makers to stream copy-protected iTunes content. To date, that feature has been restricted to Apple products, such as the AirPort Express wireless router and the forthcoming Apple TV. Other digital media products can stream only non-protected iTunes content--essentially, music and movies you've ripped to your PC.
If it pans out, the change could be a big deal and a positive development for consumers. Thus far, paid iTunes content has remained locked within Apple's proprietary ecosystem, shackling buyers with "iHandcuffs" that essentially forces them to use Apple hardware and software if they wish to enjoy iTunes-purchased media (music, movies, TV shows). By licensing FairPlay to other companies, iTunes media get the potential to be more transportable.
But for now, this remains nothing more than a rumor--and one that's a bit hard to swallow, at that. The tech.co.uk report highlights "USB streaming" as one of the big advantages of the alleged Apple licensing liberalization, despite the fact that a handful of USB devices (such as the Logitech Wireless DJ) are the only non-Apple products to date that can play FairPlay-protected iTunes audio tracks. It's also unclear why Apple wouldn't have used last week's Macworld show to make such a big announcement. Or why the company would cannibalize sales of its Apple TV product, due next month, by letting in a host of potential competitors.
In a perfect world, Apple would dump FairPlay DRM altogether. That's not going to happen, of course, so licensing FairPlay would be the next best thing. It will be interesting to see whether or not it happens, and what restrictions Apple places on the licensing if it does.
Source: tech.co.uk via iLounge via CrunchGear
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