Do Apple and the Hollywood studios think rentals could replace DVDs?

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After re-watching the Macworld Keynote, and watching the Macbook Air guided tour I am getting the impression that Jobs and Co. may think that rentals from iTunes are a viable replacement for actually owning a DVD collection.

Let me explain.

At the Keynote Jobs explained that customers don’t want to rent their music – they want to own their music – because they listen to a song thousands of times over their life…but they only watch a movie once or twice. So, rentals make more sense for movies.

Now, immediately, a hardcore movie fan is going to tell you that’s crazy, they want to own their movies so they can watch them over and over again, and build their collections. That’s fine. Your opinion is noted – but we’re not talking about what people may actually want to do here – right now we’re talking about what Steve Jobs SAID they want to do…which are not always the same thing.

SO, Jobs says people want to RENT there movies – not own them – in the Keynote. Then, if you watch the Guided Tour of the Macbook Air, the host even states that “now you can rent movies from the iTunes store instead of carrying around DVDS”.

Movies studios, also, were very unsupportive of the idea of downloadable movies in the iTunes store…with only a handful actually signing on. When you switch the model to rentals, however, they all immediately signed on board.

So that leads me to ask – Do Apple and these studios think that the future of movies in the home is renting?

We know that’s a model that Hollywood studios would absolutely love, because the entire DVD business model is built around selling us a movie that we love half a dozen times – if they could sell it to us every time we wanted to watch it – well…that’d be really great for them. Or would it?

The more I sat and thought about this while preparing to write this post, the more I looked at my DVD collection and thought about how often I’ve watched these movies. I have a minimum of $2,000 worth of movies sitting on my shelves – and at least half of them I’ve watched less than 5 times. Most of them I’ve probably only watched once or twice. Why did I buy them? Well, I wanted to KNOW that I had them if I ever did want to watch them. I wanted to collect them. To own them.

However, if I had known they were always going to be there on a server out in the cloud, 30 seconds away from me being able to watch them whenever I wanted, maybe I wouldn’t have wanted to own them so bad.

I don’t know yet – but I’m going to find out.

If I hadn’t purchased any of these movies, and had rented them everytime I wanted to watch them – I think I would have saved a substantial chunk of change…but even knowing that that’s probably true, I still don’t think the idea of rentals will ever replace owning a disk (of course, if you’d told me ten years ago that one day I would stop buying music on a format I could collect I would have told you you were an idiot).

It’s obvious Jobs is ready to get rid of the optical drive. He’s been dismissive of DVDs in the past when discussing the “few customers” who might still want to use iDVD, and the Macbook Air is the first Mac to come without one built in. I fully expect to see more Macs in the very near future that are also sans Optical Drive. We’re not there yet, of course, but we’re getting close.

I don’t know if I like the idea of not owning my movies. I do think that the Hollywood Studios LOVE the idea – and it certainly seems like Apple is ready to embrace the concept – but I’m not sure it will ever take off.

But like I said – I can’t believe CDs are history either…and lets face it – for a growing number of people…they are.

Comments

  1. If so many people want to BUY their movies, than how do you explain Blockbuster, Netflix, Cable VOD, and the local rental store being fixtures?

    Sure some people want to BUY movies and sure many still will. But with the lack of Blu-ray and HD DVD sales it does not appear to be as many as you elude to. Most people do rent movies and buy music. That is just the fact. Apple apparently is moving to appeal to these masses, just like they did with iTunes music downloads while others have failed totally with subscription models.

  2. I think there is a good balance between owning and renting movies. For me, I own about 50 or so DVDs and thats because I only buy a movie If I know I’m going to want to watch it over and over. But I do rent a lot of movies. Movies that I know I’ll only want to see once or something old that I haven’t seen in a long time. To be able to rent it right from my TV whenever I want without having to go anywhere and not have to return something, I think is awesome and has huge potential, as long as the library of movies is strong.

  3. @Joe

    Walk into Best Buy. Wal-Mart. Target. Circuit City. Fry’s. (the list could go on and on, but I will stop there). The simple fact that most of these stores are covered in hundreds of DVDs should be a decent indicator by itself that people purchase DVDs.

    In 2004 (which is the most recent data I could find with a quick Google search) Hollywood Studio revenue broke down in the following ways:

    DVD Sales: 47.9%
    Theatrical Release: 23.1%
    Video Rentals: 12.0 %
    Other: 17.1 %

    More people BUY their movies than go to the theater or rent.

  4. Im not a renter.. strictly a buyer.. So many people collect dvds.. especially the ones with the pretty cases…

    Even if I dont think im goign to watch the movie again for months, I know someone that i know, might not have seen it etc.

    I like the Owning of dvds…. and I dont own Cds cause they are the same price, and I tend to get the song on the radio for free. Or I buy a song from ITunes Etc.

    I will probably rent Dvds off of I tunes, but only because it will be cheaper and better quality then that COMCAST CRAP! .. that i Rarely get

  5. I may be mistaken, but I think there are two issues here…

    First, will digital content replace hardcopy DVD’s? Absolutely. Sure, there may be something awesome about having this tangible THING that you can add to your ridiculously huge collection. But, as you said, it will go the way of the CD. I’d say in 5-10 years, we’ll be enjoying 95% of our entertainment digitally.

    The other question is, will rentals replace ownership? I think that kind of falls into place with the digital content replacing DVD’s…once consumers aren’t buying a movie strictly for the novelty of adding another brick to their (sometimes literal) wall of movies, I think you’ll see a huge transition from purchasing to renting.

    And on a side note, Michael, I was with you when I bought my very first DVD. It was The Siege, and I remember about beating my head against the wall trying to get the blasted thing open.

  6. Buying DVDs is a waste of money. One day there will be a follow-up for DVD and then you won’t get rid of your old DVDs.
    Just look what happened with the VCR. You can get HUGE video collections for free, but nobody wants to have ‘em. :-)

    I only watch a movie once.
    Where is the tension when you know the plot already?
    I burn it on DVD-Rewritable, watch it, and erase it for the next one. :-)

  7. BlogManiac says:

    Renting is just another way of making content available that you do not want to own. Further, the guys have to make money some way – lest the street of walls do not let them live :)

    Ultimately, this is yet another way of reducing the weight of your wallet.

    Fish gotta swim, birds gotta eat – I guess.

  8. I only speak for me –

    With the ability to movie iTunes rentals (or owned movies) back and forth between my AppleTV connected to the HDTV in the Media Room and my Macs, iPhone or iPod – I really have the transportability of a DVD. I can connect my iPhone to my TV in my bedroom and watch the movie on the TV in there, or in the Kitchen. My daughter would be able to transfer her movies to her iPod and watch them on her TV in her bedroom as well.

    This is a paradigm shift but one I’m willing to give an honest trial.

    When I look at my HD DVD collection, there are a lot of movies there that have only been watched once. At $19 – $27 each compared to $4.99 – $5.99 for an iTunes HD Rental I could have saved a lot of money by renting these from iTunes.

  9. I only buy movies worth watching over and over. (Star Wars, Lord of the Rings, etc etc) I get everything else from Netflix. If it turns out to be awesome, then I’ll buy it. But most of the time, I won’t rent a movie from Netflix if I know I’m going to watch it over and over. I’ll just buy it. (Spiderman3, Shrek 3). So for me, Netflix is the “don’t mind seeing it” and buying it is the “must see it”.

    Either way, someone’s making money off me. And that’s OK.

  10. …..I don’t think iTunes movie rentals will work for me anyway. I think it’s too uncomfortable to sit at a computer desk and watch a movie. I’d rather sit on my couch; and I’m not about to spend $229 on an Apple TV so I can do it. I’ll stick with buying the “must sees” and Netflix the “don’t mind seeing”.

  11. I don’t think Steve Jobs expects rentals to kill off DVDs, although I do think he’s preparing for optical media and physical formats dying off as home network transfer speeds increase. Just as games consoles are losing their physical storage devices in favour of streaming all your online-purchased games from network servers, it makes sense that movies go in the same direction. They’ll be cheaper, and future-proof in that, when the next advent of high-definition comes along, you won’t have to invent a new form of higher-capacity disc to store them on, but rather just send a larger file.

  12. First, I like the rental idea. Like a lot of people are saying you only watch a movie once or twice. So I think a lot of people will start getting smarter with what they spend their money on. Just think about it the first time you usually see a movie is in the theatre. The second time is on rental and if you really like it you will buy it thinking you will watch it again. So if you eliminate the theatre since you have that new hdtv hanging on your wall and you eliminate the buying portion you are saving a lot of money. Lets add it up for one movie to own.

    Theatre = 20.00 for two people (unless you go without a date loser)
    rental = 5.00 to make sure they would want to purchase
    dvd = 18.00
    —————————–
    total = 43.00

    When you add it up that is one expensive movie.
    They only thing that I don’t like is the fact when you do rent these they are not full HD so until then I suspect people will still be buying blu-ray players and blu-ray discs.

  13. Digital downloads FTW

  14. After heavy consideration I must agree that it is a viable concept. However theres something about owning your own collection, having a friend come over and borrow and movie, curling up with your girl in the couch and pulling out a classing on Sunday. But I suppose that it could simply be a question of making the transition to this new form and growing with the times….
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