Ninety-nine-cent TV show rentals from iTunes are no more. Apple has pulled the offering from its online entertainment store, reportedly due to a lack of user interest. TV shows are still available for purchase on iTunes, and movies can still be rented through the service. This and the emergence of iCloud will likely further reshape Apple's approach to entertainment.Apple (Nasdaq: AAPL) has stopped offering 99-cent TV show rentals from iTunes. The decision comes about a year after the option debuted.
Movie rentals are still available. TV shows may still be purchased for download, usually for the price of US$1.99 to $2.99.
The move appears to be in response to user demand for owning a show rather than just using it for a short period of time. Apple did respond to MacNewsWorld's request for further comment, but in a statement to All Things D, the company confirmed customer demand for downloads over rentals was the reason for the switch.
"Experts were wrong. The consumer wants to own, not rent," Laura Martin, senior media analyst at Needham & Company, told MacNewsWorld.
As entertainment and content providers put together the first online media outlets, there was an overwhelming belief that since a tech-savvy generation had so many options -- everything from mainstream channels like Netflix (Nasdaq: NFLX) and Hulu to illegal streaming websites, -- users would be content with simply streaming a TV show, or renting it on a temporary basis. iTunes rentals automatically delete themselves after a set time period.
Based on demand, however, it seems that if users are going to pay for a show, they prefer having it backed up to watch whenever they please, rather than just rent it.
"It didn't seem like the demand was really there for rentals. They tried it, but obviously the economics really weren't there," Michael Corty, an analyst at Morningstar, told MacNewsWorld.
"It seems to be a big point going against the prevailing content wisdom, and it seems as though a premier digital content player is going to be an ownership model," said Martin.
As the Interenet becomes a more mainstream way to watch television, content providers are jumping on board.
"Content companies are more than happy to provide their content online because the way they get paid now is through the TV ecosystem. They're doing everything they can to make it available, and from a content side they want you to be paying for a subscription, or getting advertising dollars," said Corty.
Apple TV Future
There is also speculation that Apple's move could be the first of many in another revamp of Apple TV, probably backed by the much-anticipated iCloud online service. The system would make it possible, among other things, for a TV show or movie to be downloaded on one device like an iPad and then stopped or started later on any other device, such as a PC or an iPhone.
As content providers come to believe that users want to watch TV on a variety of platforms anytime, anywhere, they may be more eager to jump on board with a company that can promise a streamlined digital experience.
"There is a definite trend for people wanting their content on multiple devices. All these companies are jockeying for that," said Corty.
Anyone's Game
The upcoming iCloud service is a way that Apple could have a leg up on companies like Netflix and Hulu, despite their large user bases of loyal, paying subscribers.
The hype about iCloud in tech circles is also an indication that the online entertainment business is still lacking a clear leader and could be anyone's for the taking.
"We're in the first inning of figuring out what the digital business model is for this," said Martin.
Even though the rental model didn't work for Apple, it's changed its approach in hopes of being a leader in digital entertainment as well.
"Netflix is going to have something like $3 billion in sales this year, but Apple has a balance sheet with over 70 billion in cash. They've got the means and wherewithal and the technology to compete in this business," said Corty.
0 comments:
Post a Comment