Video Drives Apple's Innovation
Arguably the biggest news, however, was Apple’s return to the AppleTV as a way to bring movie rentals to iTunes and the living room.
Jobs started his iTunes pitch by noting the company sold 20 million songs on Christmas Day, a new single-day record that bodes well for iPod sales numbers to be released on January 22. He also noted the iTunes Store just sold its 4 billionth song and has sold 125 million TV shows and 7 million movies.
"Those numbers for movies didn't meet expectations, though," Jobs said. "We think there's a better way to deliver movies, so today we’re introducing iTunes movie rentals." Jobs noted that Apple didn't rent music since "people want to listen to favorite songs many, many times, but people are comfortable renting movies."
The iTunes movie rental will launch with 1,000 films by end of February. First-run movies will be available 30 days after DVD release and can be watched on Macs, PCs, all current-generation iPods and the iPhone. Using progessive download allows viewers to begin watching movies within 30 seconds. Renters have 30 days to start watching the movie, but once viewing starts it must be completed within 24 hours. Movies can be transferred from one device to another during watching using "Move" option in iTunes.
Apple TV Without the Computer
"But what about flat screen TV?" asked Jobs. "We all—Microsoft, Tivo, Netflix—tried to figure out how to get movies over internet and on to TV. And we failed. Apple tried with Apple TV and it was designed to be an accessory for iTunes and your computer. That’s not what people wanted: They wanted movies, movies, movies and no requirement of downloading the movies to their computer first."
AppleTV 'Take 2' doesn't require a computer. Using progressive download, one can rent movies directly on the AppleTV in either DVD quality or HD with Dolby 5.1 surround sound. Pricing to rent a library title is $2.99; rental of new releases is $3.99, with HD quality available at $1 more for both library and new release titles.
Besides movies, AppleTV now also offers the ability to view photos from Flickr and .Mac, podcasts, more than 50 million YouTube videos in H.264, and video podcasts in HD or standard definition, streaming directly off the podcast servers, with the ability to jump forward and backwards in video podcast.
In addition, with a nod to customers who want to watch content on the device of their choice, Apple now provides the ability to automatically sync from AppleTV back to computer for rented movies or purchased TV shows and music, allowing content to be watched on any Apple device—AppleTV, iPod or desktop / laptop—or a PC via iTunes.Choice was also a big part of Jobs introduction of 20th Century’s Jim Gianopulous, the studio’s Chairman and CEO. 20th Century was the first studio to sign on to iTunes movie rentals, for which Jobs thanked 20th Century’s helmer.
"I’ll give you a little backstory," said Gianopulous. "You don't get to talk about movies and media before talking about business models: old, new, evolving, how to improve models. But for us it all boils down to two things: Make great movies and give it to them in as many ways as you possibly can."
"When you talk to consumers they want to take it anywhere and watch it on anything," he continued. "But we don't do things that way, so when Steve brought us his vision for Video on Demand—which isn't a new concept—we were impressed about the intuitive, innovative way Apple approached it."
"So we've also talked to Steve about an idea we had on how to do DVDs now that the next generation – Blu-ray—is here," Gianopulous continued. "We don't want to deny consumers the ability to watch movies they’ve bought on DVDs on the iPod. So we're now including on BluRay discs an extra copy of the movie that can be instantly and easily moved to iPod and iPhone."
AppleTV is shipping now at $229, a price drop from the previous $299 price; Macbook Air will ship at the end of January for $1799. The Macworld trade show continues until Thursday.