AfterDawn: Tech news

Do Apple's online video rentals really have a chance?

Written by Rich Fiscus (Google+) @ 19 Jan 2008 16:01 User comments (28)

Do Apple's online video rentals really have a chance? With the initial buzz over Apple's movie rental operation giving way to speculation about its success or failure, some have cited it as the real next-gen movie format, while others have pointed out some important problems with the current state of online video distribution, warning that big improvements are needed.
While it's probably fair to say there are good points on both sides, the short history of digital distribution shows that a Video On Demand model (rental) should be more successful than selling movies. With the limitations imposed by DRM, and lack of portability from set-top box to DVD, very few people are interested in buying downloaded movies. They offer tighter restrictions for a similar price, and without the extras found on the typical DVD.

Rentals, on the other hand, are quite competitive because long term viewing concerns don't apply. The conveniencence of renting a movie without leaving your living room can easily outweigh the comfort with more familiar technology like DVD. In fact, when coupled with a well designed set-top box, VOD from the internet doesn't have to feel any more foreign than similar offerings from pay TV providers.

Amazon Unbox director Roy Price says “One thing that’s going to evolve to some extent is the home environment and how easy it is to get video from the Internet to your TV,” adding “There’s no question that people like to watch movies on the TV.”

At the same time, the success of any distribution model will depend on studio participation to ensure both selection and competitive pricing. Fortunately the studios appear open to the idea right now, especially since it's it's not yet a significant enough market force to impact DVD sales.

According to Ron Sanders, Warner Home Video president, “Even if it was 100% cannibalistic, there would not be much of an effect.”

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28 user comments

119.1.2008 16:55

Yes if they make a software player system for PC if they stick with a settop box tats over 50$ I would say they would gain enough profit to linger.

219.1.2008 17:55
atomicxl
Inactive

This is where I think Sony and MS (moreso MS) have a good shot. If they released a service and made all their products compatible with it, I think that'd be a great move. If you download a movie on your MS 360, your MS Windows PC, and watch it on your 360, PC or Zune, or stream it to anything that powered by Windows Mobile or something compatible, ou'd basically be good to go. The DRM would be there but it wouldn't be a burden. You could easily watch on your TV, store on your computer or external HDD, watch it on YOUR zune. The Zune has a great feature where you can share a song with someone else for a limited number of plays. If you could do this with video, or at least allow you to share it with a compatible device via USB or something that lets the player read from your device rather than copying files from your device to another... which basically is like bootlegging a dvd, which is illegal. You'd basically have something thats like a DVD where you can take it to a friends house and watch it on their DVD player, but when you leave, the DVD leaves with you.

This is so common sense that I can't imagine people haven't thought about it. I think its studios that are holding everything up. I read all on AfterDawn about single chips that are supposed to be going into devices that let them decode a plethora of formats all in HD. Isn't this the whole point of it? Add that chip and throw a wireless network adapter so you can get media from anywhere on your network to any tv, stereo, speaker, etc in your house.

I have a 360 and If I download something from website in WMV format with DRM, as long as I register it on my PC, I can stream it through my 360 or any other device that supports it. I can also copy it to any compatible device. The tech is already in place, its just not being used for some reason.

319.1.2008 21:23

On a place where you can go to the supermarket and rent a DVD for a Buck, or get a membership of unlimited HD format dvd for under $20 a month... $5 dollars rental will just not pick up EVER! And then some people say: "But its on Demand..." So is Cable! they should try to compete with prices, i don't think only your name brand will do this time Apple.

420.1.2008 12:59
hughjars
Inactive

They took 3 months to pass Blu-ray in the number of movies 'sold'.

Considering that is Apples performance alone (nevermind anyone else's d/l service) this obviously proves that those who imagined downloading would not be such a big deal so quickly in this market are very wrong.

520.1.2008 13:15

I guess I have to repost my comments from another thread:

hughjars' post needs some clarification.

Although Apple TV is capable of 720p output, the movies on iTunes store are still only DVD quality. (I personally prefer the 720p content from XBox Live.)

Jobs revealed at Macworld this month that a new HD movie "rental" service will become available LATER this year for your Apple TV box. You can "rent" HD movies for $4 for catalog titles and $5 for new releases. You have 30 days to view the movie but once you start it you have 24 hours to watch it as often as you want. After that it's deleted from your box.

I see download services such as Apple TV as direct competitors to the large rentral chains such as Netflix and Blockbuster. (This is why Blockbuster's stock dropped on Wall Street when the new Apple TV services were announced.) Downloads won't be competing with actual disc sales but against movie rentals.

There are people who still want the physical media in their hands. These people prefer not to have their rights to watch a movie stored in a server somewhere.

http://www.engadget.com/2008/01/15/more-...vie-hd-rentals/

Quote:

It wasn't exactly crystal clear during Steve's keynote today, but apparently, there's a fair bit of red tape attached to these movie rentals. First off, since the Apple TV hardware is remaining the same, users can still only expect 1,280 by 720 resolution on the high-end, and although 100 HD movies are reportedly ready to be viewed, not a single TV show can say the same. Furthermore, a note at the bottom of the Apple TV's revised tech specs points out that "Dolby Digital 5.1 surround sound is not available with all HD rentals," so there's that. We've also learned that HD movie rentals will be available exclusively through the Apple TV, and considering that only rentals made from iTunes can be moved to other devices, any downloads originating from the Apple TV (including everything in high-definition) won't be making their way onto your iPod, iTunes library, etc. Depressing, we know.

Plus add dblbogey7's post as well:

According to George Ou over at ZDNet low bitrate 720p downloads come with a caveat:

Quote:
The only time 4 mbps 720p will look better than 8 mbps 480i is when the video on the screen is almost entirely stationary or it’s a low-complexity video such as animation movies. Under most normal circumstances, the low bit-rate 720p so-called “HD” video will be inferior though many companies are betting that consumers won’t know any better...

...consumers must be aware of the fact that they’re slightly worse than a 1080p up-converted DVD.
http://blogs.zdnet.com/Ou/?p=959&tag=nl.e622

So it's up to you to decide:

$230 for the Apple TV box
$4 - $5 for a movie that you can watch within a 24 hour period then it's deleted from your box.
Picture quality that's inferior to upconverted DVD and inferior to broadcast HD.

620.1.2008 13:33
hughjars
Inactive

juankerr why are you spamming the board with this?

Originally posted by juankerr:
"So it's up to you to decide"
The point I was making is that people are deciding.

It has only taken 3 months for Apples movie 'sales' to overtake Blu-ray's (which have been made over almost 2 years).

It's quite clear that a significant number of people are buying these movies and could care less that they are 720p and do not have the highest audio spec available.

720.1.2008 13:44

Originally posted by hughjars:
It's quite clear that a significant number of people are buying these movies and could care less that they are 720p and do not have the highest audio spec available.
Read the sources hughjars.

The 720p movies are not even available yet. How can people decide on something that hasn't even launched yet? Our "Mac person" at work has Apple TV and he says the only HD material you can download right now are movie trailers. The high def rental service isn't going to go online until the new Apple TV boxes come come out and the old boxes are updated in about 2 weeks. There will be about 100 movies available at launch but these will be low bitrate 1.5 to 4 mbps as dblbogey7's source said. The people who have downloaded movies so far have downloaded only DVD quality movies.

dblbogey7's question still stands:

Is the following worth it to you?

$230 for the Apple TV box
$4 - $5 for a 720p movie that stays in your box for only a 24 hour window - after which it disappears from your Apple TV.
Picture quality that's inferior to upconverted DVD and inferior to broadcast HD.

ADDED:

Here's a follow-up to George Ou's article regarding low bitrate downloads. Anyone who appreciates high def should be forewarned.

http://blogs.zdnet.com/Ou/?p=962

Quote:
In light of the fact that 8 mbps 1280×1080 video gets you sued, you have to wonder what Steve Jobs is thinking when he says Blu-ray and HD DVD will get killed by download services such as his newly launched 4 mbps 720p “HD” iTunes movie rental service. I guess if consumers believe the lie that you can do HD with these low bit-rate downloads, then Steve might be right. But with cheap 42 inch 1920×1080 full 1080p LCD and Plasma panels coming out spring this year at less than $1400, consumers are going to be in for a surprise when they see the difference between the free stuff coming over the airwaves versus the crap they actually pay for coming from Satellite and download services.
Note the very informative table at the end of the article.

An informal poll at engadget HD also shows that majority of the >4000 respondents aren't sold on the Apple TV HD service and still prefer thier HD discs:

http://www.engadgethd.com/2008/01/19/pol...n-apple-tv-now/
This message has been edited since its posting. Latest edit was made on 20 Jan 2008 @ 16:03

820.1.2008 18:56

I think what hughjars is trying to state is that people don't give a rats ass about Hdef and that it could easily out pace BR sales numbers.

920.1.2008 19:09

Originally posted by ZippyDSM:
I think what hughjars is trying to state is that people don't give a rats ass about Hdef and that it could easily out pace BR sales numbers.
What's the point of comparing an SD/HD download/rental service to a high def disc format that's geared toward sales? They're two totally different markets with different demographics.

If I were an Apple executive I would be monitoring how my product fares against Netflix, Blockbuster, cable VOD, and even XBbox Live among others.
This message has been edited since its posting. Latest edit was made on 20 Jan 2008 @ 19:17

1020.1.2008 19:25

Originally posted by error5:
Originally posted by ZippyDSM:
I think what hughjars is trying to state is that people don't give a rats ass about Hdef and that it could easily out pace BR sales numbers.
What's the point of comparing an SD/HD download/rental service to a high def disc format? They're two totally different markets with different demographics.
A few things first it shows that digital services are close to replacing discs in trems of item by item sales it matters very much so because the price V cost for the studios might look all the more better to scrap the failing costly disc systems for a cheaper alternative as long as the bottom line is protected anything is posiable thus you must not so easily dismiss it.

stillI really do not see any major studios going digi only for 5 or 10 years.. and from the way things are changing I think the Hdef formats have failed from the start still a 5-10 year run is not that bad DVD has only been around 11 years at the most and one can easily see the need for physical distribution for the next 20 years, however past 5 years anything could be reasonably possible.

Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
Check out my crappy creations
http://zippydsmlee.deviantart.com/

1120.1.2008 20:16

Dont make me stick my Tivo on you. Haha.

i dont care who you are its next to impossible to stream 720/P or any other /P format to claim they can stream at any thing higher than an /I rating is full of crap.

1220.1.2008 22:03

Originally posted by DXR88:
Dont make me stick my Tivo on you. Haha.

i dont care who you are its next to impossible to stream 720/P or any other /P format to claim they can stream at any thing higher than an /I rating is full of crap.
and looking at the Hdef market no one else cares either but A/V nazis the public wants cheap and Hdef dose not deliver and by the time it can it might be to late for it as a mainstream format.

1320.1.2008 22:59

Quote:
According to George Ou over at ZDNet low bitrate 720p downloads come with a caveat:

Quote:
The only time 4 mbps 720p will look better than 8 mbps 480i is when the video on the screen is almost entirely stationary or it’s a low-complexity video such as animation movies. Under most normal circumstances, the low bit-rate 720p so-called “HD” video will be inferior though many companies are betting that consumers won’t know any better...

...consumers must be aware of the fact that they’re slightly worse than a 1080p up-converted DVD.
http://blogs.zdnet.com/Ou/?p=959&tag=nl.e622

So it's up to you to decide:

$230 for the Apple TV box
$4 - $5 for a movie that you can watch within a 24 hour period then it's deleted from your box.
Picture quality that's inferior to upconverted DVD and inferior to broadcast HD.

I'd recommend taking anything George Ou has to say on any subject with an entire truckload of salt, because quite frankly a single grain just won't do the job. Among other things, he claims that AVC can only achieve 1/2 the bitrate of MPEG-2 while maintaining the same quality, which is patently false. He also repeatedly shows that he either doesn't know what HD means, or is more interested in getting Diggs for outrageous statements than contributing any kind of meaningful discussion. His lack of understanding of the technology he's lecturing about isn't new either. In the past he's misreported a number of technical materials, often in an apparent blind hatred of Apple.

In short, his conclusions, while correct when it comes to low bitrate video are either irresponsibly misleading, or a sign that he doesn't know the first thing about digital video. Given his history I tend to believe it's mostly the former, probably with a touch of the latter.

Besides referring to low bitrate HD as "Fake HD" - his exact words - he also makes the claim I mentioned above about AVC being at best twice as efficient as MPEG-2, and claims that DVDs have a bitrate of 8000kbps (as in an average or constant bitrate). I had exchanges about both articles where I didn't even cover most of these points, but his responses, which basically amounted to "I'm right and you're wrong" told me nearly everything I needed to know about him. A quick search on Google, revealing claims that Windows XP is more secure than OSX, told me the rest.

1420.1.2008 23:07

vurbal
do you think the way tech is changing that discs will be the backbone of the industry for another 10 years?

I am starting to think outside of 5 anything is possible.

1520.1.2008 23:11

My Suber STubish tinks me may see giant disk made concrete data net too to futer

1620.1.2008 23:20

Originally posted by DXR88:
My Suber STubish tinks me may see giant disk made concrete data net too to futer
what I am gettign at look 5-15 years down the line and the possibility of a ala cart streaming TV thats no worse than normal cable qauilty wise and has some on demanded capability it would fck over the cable industry and damage the sat TV and home disc industry.

Of coarse with the media industry enforcing obscure bandwith rules they might stop it from ever happening.

1720.1.2008 23:25

Originally posted by ZippyDSM:
vurbal
do you think the way tech is changing that discs will be the backbone of the industry for another 10 years?

I am starting to think outside of 5 anything is possible.

I'd be nothing short of shocked to see optical discs being anything but legacy technology in another decade. In my house they already are, although I'm certainly in the minority right now.

At this point I'd say there are only 2 big obstacles that will stop online video from beginning a rise to dominance within the next 1-2 years. The first is the lack of set-top box availability. We need a general purpose video box - sort of like a HTPC but specialized for internet video - that can connect to multiple video providers using a universal set of standards. Consumers aren't interested in 2 versions of the technology they're already comfortable with (discs), so why would anyone believe they'll rush in to adopt unfamiliar technology that's even less universal?

The other problem, and one which could probably be remedied much easier, is the availability of "real high speed" internet. By real high speed I mean a minimum of 5Mebabits, with a standard speed more like 15 -20 Megabits, and none of this 5 Megabits peak as long as you don't download more than would fit on a floppy disk. And of course there are a number of areas where they simply need infrastructre improvements that the companies providing broadband service currently can't afford to do. Here in the middle of the US we have a number of areas where the only broadband internet is from cable and a single headend may have to service 10 towns in a 20 mile radius. Those folds aren't getting better service any time soon - and we won't even get into cable internet in apartment buildings or DSL more than about 3/4 of a mile from the CO.

At any rate, I see both of those situations improving greatly in the next couple of years (for most people) and probably within 3-5 years after that a serious movement away from physical media. However, I don't know that anyone has even built the model to copy yet, so I could easily be completely off base. Don't ever underestimate the capabilities of tech companies to limit development of anything that doesn't fit their current business model - or the willingness of politicians to get in line to help them out.

1820.1.2008 23:36

Quote:
Originally posted by ZippyDSM:
vurbal
do you think the way tech is changing that discs will be the backbone of the industry for another 10 years?

I am starting to think outside of 5 anything is possible.

I'd be nothing short of shocked to see optical discs being anything but legacy technology in another decade. In my house they already are, although I'm certainly in the minority right now.

At this point I'd say there are only 2 big obstacles that will stop online video from beginning a rise to dominance within the next 1-2 years. The first is the lack of set-top box availability. We need a general purpose video box - sort of like a HTPC but specialized for internet video - that can connect to multiple video providers using a universal set of standards. Consumers aren't interested in 2 versions of the technology they're already comfortable with (discs), so why would anyone believe they'll rush in to adopt unfamiliar technology that's even less universal?

The other problem, and one which could probably be remedied much easier, is the availability of "real high speed" internet. By real high speed I mean a minimum of 5Mebabits, with a standard speed more like 15 -20 Megabits, and none of this 5 Megabits peak as long as you don't download more than would fit on a floppy disk. And of course there are a number of areas where they simply need infrastructre improvements that the companies providing broadband service currently can't afford to do. Here in the middle of the US we have a number of areas where the only broadband internet is from cable and a single headend may have to service 10 towns in a 20 mile radius. Those folds aren't getting better service any time soon - and we won't even get into cable internet in apartment buildings or DSL more than about 3/4 of a mile from the CO.

At any rate, I see both of those situations improving greatly in the next couple of years (for most people) and probably within 3-5 years after that a serious movement away from physical media. However, I don't know that anyone has even built the model to copy yet, so I could easily be completely off base. Don't ever underestimate the capabilities of tech companies to limit development of anything that doesn't fit their current business model - or the willingness of politicians to get in line to help them out.
Agreed,we just got 2Mebabits maybe a year ago,they are holding a 10Mebabits line for their IPTV here and offering a 2Mebabit net for 60 month this is rural vill TN, but lil by lil inroads are being made and the service is improving.

I can see the main trouble for "non local" IP TV being the service providers are starting to offer less for more money or the same amount of money they are getting, this could be a industry wide plan to slow the net so they can then offer "media data" without restrictions through services that are as costly as current plans if not more.....I wonder how the battle for bandwidth will play out..you have company's that are tryign to sell more digital stuff through ISPs that are owned by thier own company lowering and limited the rate at which it can be sent......oh the sht will fly when it hits the fan that day...

1920.1.2008 23:47

Ironically the only way I see cable providers making it in the long term is by becoming data only services. That way the escape the issues the FCC has with their television services (and quite frankly the current FCC chairman has an irrational hatred of cable companies) and allow them to simply resell someone else's video package, which could be just another data service.

How that meshes with their contracts with municipalities is an interesting problem, but if they play their cards right it's not an insurmountable one.

And despite the perception of most of the public, cable companies often provide services to the community that make them valuable to have around. The "evil cable company" I used to work for makes a point of offering free internet service to schools and small municipal governments. I won't claim they don't have problems (I don't work there now after all) but in general they're not the incarnations of everything unholy that critics would have you believe. They are, however, stretched too thin and competing on too many fronts to be much good at most of what they do now.

2020.1.2008 23:51

Originally posted by vurbal:
Ironically the only way I see cable providers making it in the long term is by becoming data only services. That way the escape the issues the FCC has with their television services (and quite frankly the current FCC chairman has an irrational hatred of cable companies) and allow them to simply resell someone else's video package, which could be just another data service.

How that meshes with their contracts with municipalities is an interesting problem, but if they play their cards right it's not an insurmountable one.

And despite the perception of most of the public, cable companies often provide services to the community that make them valuable to have around. The "evil cable company" I used to work for makes a point of offering free internet service to schools and small municipal governments. I won't claim they don't have problems (I don't work there now after all) but in general they're not the incarnations of everything unholy that critics would have you believe. They are, however, stretched too thin and competing on too many fronts to be much good at most of what they do now.
and the reason for the price increasing and bandwidth not being devied into cheaper slower packages to sell with the higher more costly ones??
just answer that one :P
This message has been edited since its posting. Latest edit was made on 20 Jan 2008 @ 23:52

2121.1.2008 0:10

Quote:
Originally posted by vurbal:
Ironically the only way I see cable providers making it in the long term is by becoming data only services. That way the escape the issues the FCC has with their television services (and quite frankly the current FCC chairman has an irrational hatred of cable companies) and allow them to simply resell someone else's video package, which could be just another data service.

How that meshes with their contracts with municipalities is an interesting problem, but if they play their cards right it's not an insurmountable one.

And despite the perception of most of the public, cable companies often provide services to the community that make them valuable to have around. The "evil cable company" I used to work for makes a point of offering free internet service to schools and small municipal governments. I won't claim they don't have problems (I don't work there now after all) but in general they're not the incarnations of everything unholy that critics would have you believe. They are, however, stretched too thin and competing on too many fronts to be much good at most of what they do now.
and the reason for the price increasing and bandwidth not being devied into cheaper slower packages to sell with the higher more costly ones??
just answer that one :P

Don't be so sure that there aren't cheaper packages. The company I worked for had a 128kbps package available that they simply didn't advertise because it wasn't a big money maker. If you asked about it, or they were trying to avoid losing a customer, you could get it. I never said they weren't out to make money, but in many cases they're more misguided than evil - like most corporations.

2221.1.2008 0:13

Quote:
Quote:
Originally posted by vurbal:
Ironically the only way I see cable providers making it in the long term is by becoming data only services. That way the escape the issues the FCC has with their television services (and quite frankly the current FCC chairman has an irrational hatred of cable companies) and allow them to simply resell someone else's video package, which could be just another data service.

How that meshes with their contracts with municipalities is an interesting problem, but if they play their cards right it's not an insurmountable one.

And despite the perception of most of the public, cable companies often provide services to the community that make them valuable to have around. The "evil cable company" I used to work for makes a point of offering free internet service to schools and small municipal governments. I won't claim they don't have problems (I don't work there now after all) but in general they're not the incarnations of everything unholy that critics would have you believe. They are, however, stretched too thin and competing on too many fronts to be much good at most of what they do now.
and the reason for the price increasing and bandwidth not being devied into cheaper slower packages to sell with the higher more costly ones??
just answer that one :P

Don't be so sure that there aren't cheaper packages. The company I worked for had a 128kbps package available that they simply didn't advertise because it wasn't a big money maker. If you asked about it, or they were trying to avoid losing a customer, you could get it. I never said they weren't out to make money, but in many cases they're more misguided than evil - like most corporations.
so comcast has hidden rates?

2321.1.2008 0:15

Couldn't tell you about Comcast ;)

I just know about the company I worked for.

2421.1.2008 7:46

Cable has a 16 pipe threshhold the could easly get to hidef format but its what you said earler that one cable share's your TV/Internet/VoIP that leaves not enough room for Just real HD.

its split like this 8 pipes for tv, 6 for internet, and 2 for VoIP.

2521.1.2008 16:41

Originally posted by vurbal:
Among other things, he claims that AVC can only achieve 1/2 the bitrate of MPEG-2 while maintaining the same quality, which is patently false... he also makes the claim I mentioned above about AVC being at best twice as efficient as MPEG-2,
I was under the impression that MPEG4/AVC is at least twice as efficient than MPEG2 and thus can deliver equal video quality at substantially lower bitrates.

Quote:
The intent of the H.264/AVC project was to create a standard capable of providing good video quality at substantially lower bit rates than previous standards (e.g. half or less the bit rate of MPEG-2, H.263, or MPEG-4 Part 2), without increasing the complexity of design so much that it would be impractical or excessively expensive to implement.
Isn't Ou therefore correct in stating that AVC can have half the bitrate of MPEG2 but still retain the same video quality? Or am I misreading vurbal's post?

2621.1.2008 17:04

Originally posted by eatsushi:
Quote:
The intent of the H.264/AVC project was to create a standard capable of providing good video quality at substantially lower bit rates than previous standards (e.g. half or less the bit rate of MPEG-2, H.263, or MPEG-4 Part 2), without increasing the complexity of design so much that it would be impractical or excessively expensive to implement.
Isn't Ou therefore correct in stating that AVC can have half the bitrate of MPEG2 but still retain the same video quality? Or am I misreading vurbal's post?

Actually what he says is that the best it can do is keep the same quality at half the size, and if you read closely he also claims that's an exxageration and you need more than half the bitrate for AVC to attain the same quality as MPEG-2.

Rich Fiscus
@Vurbal on Twitter
AfterDawn Staff Writer

2721.1.2008 17:10

eatsushi you cannot half the bitrate and expect the same quality. tv's in the US use an 8 pipe system excluding digital witch us the 8+4 methode. there is a pipe for contrast, a pipe for brightness, a pipe for color, a pipe for tint, a pipe for sharpness, a pipe for header information, a pipe for CC, and a pipe for audio,

Mpeg4 is its own format halfing it does not make it Equal to Mpeg2,

Simply put you cant half the bitrate of anything you can however increase the compression.

2816.2.2008 23:32

Only time will tell if this will work or not.

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