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The rumor mill has gone into overdrive in anticipation of Apple's (Nasdaq: AAPL) Worldwide Developers Conference, to be held in San Francisco August 7th through 11th. One very interesting possibility posed by Apple watcher Think Secret is that the company will announce it will offer feature-length movies to be rented from its vaunted iTunes music store at US$9.99 a pop.
There is other scuttlebutt as well. Apple may unveil new high-end desktops, the so-called Mac Pros. It may introduce a consumer oriented, Intel-based notebook with lower price points than the MacBook Pro introduced at the beginning of this year. It may introduce a new iPod Nano. It may license iTunes to other device vendors, thus opening the door for all sorts of devices to be used to download the music and TV shows now available on the service.
First to Release
Any announcements surrounding the iPod, though, are sure to be pounced on by company and market watchers alike. Apple has not released a new version of its popular iPod line for a while. Also, the movie rental scheme -- reports of which have been circulating for a while -- would have an impact beyond Apple's immediate product line.
In short, if Apple were to do to movies what it has done to online music downloads, it could impact the economics underpinning a range of industries -- from Hollywood studios to related businesses such as Netflix (Nasdaq: NFLX). Indeed there is speculation that Steve Jobs' original idea was to sell movies outright on iTunes, as it does songs. However, the theory goes, the Hollywood studios fiercely and apparently successfully resisted this plan, after watching the recorded music industry struggle with the 99-cents per song pricing model Apple popularized for online distribution of music.
Good Idea
Even if the movies are just available as a rental, it is still a good idea, Matt Booth, senior consultant for The Kelsey Group told MacNewsWorld.
"Apple already has a global platform with true interoperability that no one else can touch, despite rumors that Microsoft (Nasdaq: MSFT) is developing its own product," he said. Then there are the deals Apple has inked with Disney (NYSE: DIS) and Touchstone and providers of first run TV shows such as "The Office" and the "Law and Order" franchise, also available on iTunes.
"I don't think it is a stretch, especially given that Steve Jobs is the largest shareholder in Disney, for iTunes to start offering movies as well," Booth added.
iTunes has never made Apple a lot of money, he observed; indeed the service for some time reported losses, but it drove sales of the iPod. "Companies that have and maintain huge market shares like the iPod usually do so by continually offering complementary services or products to keep consumers buying," Booth said.
