There is a lot of buzz in the media industry around Apple plans to offer video rentals in January. I have even seen articles saying that this may mean the end of Blockbuster and even NetFlix. I don’t see why. If Apple only plans to make their current movie catalog available for rent, they will hardly become a threat to anyone. Why? Simply because of the poor video quality they currently offer, which may be enough for an iPod, but certainly not for a big flat-screen TV.
Offering rentals in addition to movie purchases will not change this fact. To be really competitive and win new customers, Apple needs to offer a much larger movie selection but foremost they need to move to HD, and that probably means moving to 720p. So far, not a single rumor has indicated that this will be the case. That means that either that may be the secret Steve Jobs is keeping for MacWorld or that this new effort will not create a major breakthrough in terms of new users moving to iTunes to get their movies.
I know that there are many out there who have still not adopted HD. Nintendo for example is making a killing selling the Wii to customers who do not care about HD and that is fine. However, when you sell a device like the AppleTV which does not advertise support for resolutions less than 480p and favors connecting to a TV through an HDMI connector, that is obviously not the public you are targeting.
Right now Apple offers three devices that could display HD content, the AppleTV, the iPhone and the iPod touch. Add to that all the Macintosh line of computers. However, Apple also offers two other devices, the iPod nano and the iPod classic which do not offer the proper display size ratio to support HD content. That means that moving to HD would leave out many recently released products. That doesn’t make much sense. If Apple chooses to move to HD they will probably have to keep offering regular content for many of their customers. That could explain some of the rumors about variable content pricing. It may turn out that the price will not vary based on the content, but instead based on the resolution of the content. That would be more in line with what Apple is already doing with iTunes plus.
Of course, right now all what I have been saying is purely speculative. However, if Apple wants to compete effectively in the media server arena, they will need to move to HD at some point, even if it is just to match what others are already doing. MacWorld seems to be the perfect occasion to announce such a move and in my opinion this would be a far more important announcement than just movie rentals.
December 31st, 2007 at 2:18 pm
Does the iPhone and iPod Touch really have the ability to play HD video?
They both have a sort of widescreen aspect ratio (it’s not true 16×9), but the actual resolution of the video, according to Apple’s website, appears to max out at 640×480. Furthermore, it appears the the TV adapter that Apple sells for the iPhone and iPod Touch outputs the video at 480i.
Is there something that I’m missing? Do the iPhone and iPod Touch have the ability to play some kind of HD content, maybe as some kind of undocumented capability?
December 31st, 2007 at 3:07 pm
I totally agree that without a better selection and HD content, Apple won’t be able to compete with the more traditional rental outlets. Also keep in mind that audio is a big concern for many as well. AFAIK, even the download services that offer HD content still only have 2-channel audio. They’ll need to offer at least Dolby Digital 5.1 to satisfy the audiophiles out there.
With at least the quality of a decent upscaling DVD player (and preferably HD) and surround sound, the convenience of downloadable rentals will be viable for the average consumer. However, video/audio-philes will still look to Blu-Ray and HD-DVD for its superior picture quality and uncompressed/lossless audio tracks. That’s where Netflix and Blockbuster will come in.
BTW, there’s an error in your article. Only the Apple TV (720p max) and Macs will play HD content. The video capable iPods (Touch, iPhone, etc.) max out at 640×480, so they can’t play a 720p clip without it first being downscaled. If you’re just talking about having a screen optimized for widescreen playback, while the Touch and iPhone take better advantage of widescreen material, all the video iPods will playback widescreen material so the Nano and Classic can handle whatever the Touch and iPhone can play. In fact, current movie downloads from iTunes are widescreen and play fine on all the video capable iPods.
December 31st, 2007 at 3:45 pm
A$, what I meant was that while all iPods can display widescreen content, it really only looks good on the iPhone and the iPod touch because of the pixel ratio. But I also meant that neither the iPod classic nor the iPod nano have the horsepower to display an MPG4 movie encoded to be displayed at 720p on the Apple TV. The problem that Apple faces is that it needs to offer content for a wide array of products that do not share similar technical specs. That is a big hurdle for Apple. They are currently offering video using the lowest denominator. That allows them to maximize profits (specially if we take into account that bandwidth is still expensive) but the situation is unsustainable if they want to conquer the living room.
December 31st, 2007 at 4:10 pm
Hubert, thanks for the response. Just to be clear though, the iPod Touch and iPhone also don’t have the horsepower to display 720p content (at least according to the specs).
I agree that they need to figure out a way to offer higher quality video for the living room while making it easy to view the video on their iPod line. This wouldn’t be too hard to do though. Offer the movies as a download at 720p and then add a function to iTunes that would downscale it to an appropriate resolution when copying the movie to an iPod. That’ll slow things down a bit (depending on the speed of the user’s computer), but would solve the problem. Another option would be to offer two different versions for download, maybe even having different pricing structures.
If the rumors are true, Apple may be moving toward a similar solution for DVDs. While one *can* copy commercially encrypted DVDs to an iPod, the legality of this is a gray area. Rumors are that Apple is working with studios to offer a Fairplay version of the movie on the DVD that can simply be copied into iTunes and onto an iPod.
January 1st, 2008 at 11:16 am
Apple offering HD rentals at 720p mpeg4 could kill both HD-DVD and BlueRay. And I think mpeg4 video can scale down to various lower resolutions without requiring any additional encoding. Media Wonk had some interesting things on his site that relates to scalable UI’s/content.
I think this will be a viable alternative if the rentals aren’t over-compressed like most of the satellite channels (even some of the HD channels). And I hope they choose to offer AC-3. Apple will have to balance the needs of the mass market and what’s possible with the existing broadband infrastructure. Maybe the AppleTV will use some sort of distributed computing technology to overcome this?