Apple’s movie offer tumbles competitors

MUMBAI: Putting all speculation to rest, Apple has tied up with all major movie studios to offer iTunes Movie Rentals. This in turn has led online movie rental service Netflix to offer its subscribers unlimited streaming of movies and TV episodes on their PCs—for no additional fee.
 
At present Netflix already competes with Blockbuster Inc.’s Movielink and Amazon’s Unbox downloading services. Another download service provider is Jaman, which gives subscribers a free trial for three movies and then charges — $1.99 to rent for seven days, whereas $ 4.99 to own — for every movie downloaded.
 
While Apple has tied up with 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer, Lionsgate and New Line Cinema; Netflix has a library of over 6,000 movies and TV episodes.
 
iTunes Movie Rentals have been priced at $2.99 for library titles and $3.99 for new releases, and high definition versions are just one dollar more with library titles at $3.99 and new releases at $4.99.
 
On the other hand, Netflix subscribers on unlimited rental plans, which start at $8.99 a month, will be able to stream as many movies and TV episodes as they want on their PCs, choosing from a library of over 6,000 familiar movies and TV episodes. However, Netflix customers who pay just $4.99 to rent up to two DVDs per month won’t have unlimited access to the streaming service.
 
By the end of February this year, Apple plans to offer over 1,000 titles including over 100 titles in high definition video with 5.1 Dolby Digital surround sound which users can rent directly from their widescreen TV using Apple TV.
 
While Apple will be integrating movie downloads with Apple TV, Netflix has recently signed up with LG Electronics to develop a set-top box that will allow movies to be viewed on a TV screen. The set-top box is likely to hit the market later this year.
 
iTunes Movie Rentals important feature is iTunes’ ease of use. Once a movie is rented, it starts downloading from the iTunes Store directly to iTunes or Apple TV, and users with a fast Internet connection can start viewing the movie in seconds. Customers have up to 30 days to start watching it, and once a movie has been started customers have 24 hours to finish it—or watch it multiple times.
 
“iTunes Movie Rentals instantly brings great movies from all the major studios directly to your iPod, iPhone, TV or computer—without having to drive to the video store or wait for DVDs to arrive in the mail. Movie lovers can now discover and enjoy movies as simply and easily as music lovers discover and enjoy music today on iTunes,” said Apple CEO Steve Jobs.
 
“Apple has created an incredibly easy and innovative way to rent and enjoy movies. Millions of movie lovers will be able to watch wonderful movies from Fox and the other major studios whenever and wherever they want, be it on their computer, TV, iPod or iPhone,” said Fox Filmed Entertainment chairman and CEO Jim Gianopulos.
 
Netflix chief marketing officer Leslie Kilgore said, “Unlimited has always been a very powerful selling point with our subscribers and a large part of what set us apart in the marketplace. In talking with members about our streaming feature during the past year, it became clear that, as with DVDs, the idea of streaming unlimited movies and TV episodes on a PC resonated quite strongly. And we’re now in a good position to offer that.”


Post the announcement, Blockbuster shares fell 14 per cent to $2.79 on Tuesday, while Netflix shares fell 5.4 per cent to $21.55. Interestingly, with overwhelmed investors, Apple shares also slipped, losing $9.74 or 5.5 per cent.

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