MacWorld and Apple’s New Strategy

25 01 2008

I’ve been sick for the past week (don’t ask, don’t ask) so I may have missed this, but I found one of the most interesting items in Apple’s Macworld announcements to be about their rental pricing strategy.

(No, I’m not about to reach out and grab some Air. As sexy as it looks, I just don’t think that it would my larger needs — larger hard drive, larger number of ports, larger battery life and need for replacement. I’m not really sure that losing all of that is worth the thrill of slipping my Mac out of manila envelope.)

Apple announced, as everybody who cared to pay attention now knows, that they are starting renting movies through the iTunes store. They call it “rentertainment.” You get movies in a decent, though not huge, size (640×480 pixels), have thirty days to start watching them, and then one day before the rental goes dark. You can watch it once or a gazillion times in that 24 hours hours (unless you’re watching BERLIN ALEXANDERPLATZ, the 1980 German television series that was released in the US as a 15-1/2 movie — unless case you can watch it about 1 and a half times). It’s got titles from all of the majors so the catalog will eventually get pretty deep. And, it’s got a nifty queue feature, like Netflix, that allows you prioritize the order in which content is downloaded.

So, how did Apple manage to pull this off and make friends with the studios? If you ask me (and I don’t have any inside information at all) they did it by their pricing. Standard definition movies at $3.99 for new releases and $2.99 for library titles — HD films are a buck higher for each.

Whoa. Stop right there. Variable pricing depending on traditional release patterns?

Now, I know that this isn’t the same thing as letting the record labels set their own pricing willy-nilly, which is what drove NBC-Universal songs out of iTunes in the first place. But it does strike me as a significant move towards shifting the model away from one-price shopping, which has been Apple’s desire since the beginning of of its ascent.

Apple allows for free downloads of chargeable content. As a member of the motion picture Academy, I’ve been able to download some soundtrack albums for films up for consideration this year. Some of the television studios placed gift cards in copies of Daily Variety and Hollywood Reporter last year, allowing readers to download up-for-consideration episodes of “The Office” and other shows.

So, we know that Apple is looking for ways to cleverly monetize their content besides the traditional download.

This strikes me as a logical next step, and I’m glad for the direction that it indicates Apple is moving. Variable pricing is not a bad thing. And working with the studios and labels is also not an inherently bad thing. There are good ideas in many places. Even, shockingly, from the majors.

(Image courtesy of




3 responses

4 02 2008
The Future Waves Hello « H o l l y n - w o o d (Norman, that is)

[…] website that Internet TV mega-giant Brightcove will host for them.  I’ve mentioned in an earlier post about Apple and movie rentals that NBC had supplied iTunes cards to readers of Variety and […]

15 02 2008
How Do People Watch Films? And How Does Apple Rent Them? « H o l l y n - w o o d (Norman, that is)

[…] that they were going to start renting movies through iTunes.  I discussed the pricing strategy back in earlier post, but I’ve recently started thinking about another aspect of their plan — the timing […]

16 03 2008
2.0 Weblogs

rentertainment is good, so is thinnovation.

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