Apple Prepping Movie Service

By Gary Kim October 14, 2011

Apple Inc. is preparing a movie service, according to the Los Angeles Times. Apple reportedly has been meeting with studios to finalize deals that would allow consumers to buy movies through iTunes and access them on any Apple device. The service is expected to launch in late 2011 or early 2012. 

The move comes as owners of movie content, and distributors of movie content, are experimenting at a higher rate with online channels. The studio venture known as Ultraviolet also is launching, for example.

People who buy DVDs or Blu-ray discs for those and other upcoming titles, including Sony Pictures' “The Smurfs” and Universal Pictures' “Cowboys and Aliens,” will have access to digital cloud copies they can instantly watch on their Internet-connected TVs, smartphones and tablet computers. Ultraviolet purchases via the Web, without discs, are expected to come in 2012.

Lots of people are hoping that streaming and over the top delivery of professional content will somehow lead not only to more “on demand” access, but somehow lead to lower prices. That might happen, but not if content owners and distributors have success creating “sell through” requirements that link streaming to purchase of legacy products. 

 The “Ultraviolet” initiative has been called the “Giant Media DRM Cloud Coalition Featuring Everyone Except Apple and Disney and Amazon.” 

Netflix of course is trying to speed its transition to a streaming-based service. Amazon is expected to take additional steps to bolster its own streaming products while Hulu might simply be trying to cash out, if possible, because its owners cannot agree on how the service should grow. 

Clearly, tensions within parts of the video ecosystem are growing, both on the consumer front and within the delivery ecosystem. One in five American video subscribers may cancel service in the next few years, primarily because they find multichannel video services too expensive, according to a new survey by Credit Suisse.

Overall, 25 percent of consumers surveyed by the firm currently subscribe to or use an over-the-top service, such as Netflix, Hulu Plus or Amazon Prime Instant Videos.

Roughly half of those said they use these services as a substitute for subscription TV, with the other half indicating that Internet-delivered video services are complementary to cable, satellite or telco TV, Credit Suisse found. 

Every new online channel, and the expansion of every channel, creates some amount of new conflict within the creation and delivery ecosystem. Apple's efforts are not the only source of pressure. And so the pressure is mounting. 

Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Jennifer Russell

Contributing Editor

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