Apple changes strategy with iTunes movie rental launch

One of the worst-kept secrets in IT was this evening confirmed by Apple boss Steve Jobs - the launch of an extensive movie download rental service via its iTunes Music Store and software client.

Speaking at the Macworld conference in San Francisco, Jobs unveiled the download service, which has been widely speculated about for several weeks.

Apple has signed up studios including Fox, Warner Bros, Paramount, Universal, Sony, New Line Cinema, Lionsgate and of course Disney, in which Jobs is the single largest shareholder.

The service will offer around 1,000 movies from launch in February, and will offer both first-run movies and older releases, with a two-tier pricing structure. New releases will cost $3.99 to rent, while older releases will be priced at $2.99. High definition movies, of which there will be around 100 at launch, will cost $4.99 and $3.99 respectively.

Movie rental periods will be 30 days, with the download expiring 24 hours after first being played within the 30 day period. An extensive digital rights management update to Apple's QuickTime and iTunes software has been released today to support the rental service.

However Jobs moved quickly to scotch ideas that the company would being offering a music rental service.

"People want to own their music. They listen to their favourite tracks over and over, and it is more practical to own their favourite songs. Movies are different, we watch movies either once or a few times, it lends itself far better to a rental approach".

Movies can be transferred to iPods, with video iPod Nano, iPhone, iPod Touch and sixth generation (silver and black) video iPods supporting movie rental content. Firmware updates for all devices listed have been released today to enable support for movie rentals. Owners of fifth generation video iPods (white and black) will not be able to view movie download content on their iPods.

Movie downloads will also be supported by the Apple TV device, which has received a major software overhaul. Users will be able to buy TV shows and rent movies direct to the Apple TV, rather than streaming them from an existing Mac or PC. The entry-level Apple TV also received a price cut to $229 in the US, but not in the UK where it remains £199.

Unfortunately, Apple has one again left users in the UK disappointed and overlooked, failing to deliver the service to the UK at launch. A brief passing comment from Jobs noted that the company wanted to bring movie rentals to the UK as soon as possible. It should be noted that the same reference was made at the US launch of TV show sales on iTunes. It took two years for TV show sales to arrive in the UK.

Also announced during the Apple chief executive's keynote address were significant firmware updates for the iPhone, which received overhauled SMS and mapping software, as well as the ability to customise the home screen, while the iPod Touch gets five new applications including an email client. The iPod Touch software update will cost £12.99, while the iPhone update is free.

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