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Monday, January 21, 2008

More color on last Tuesday's Apple news

I did some post-MacWorld analysis for Variety, focusing mostly on the addition of movie rentals to iTunes. (Diane Garrett also wrote this piece a few days later.)

The big things that could hamstring Apple's move into rentals: the breadth of its selection, and the fact that rentals won't show up there until about a month after the DVD release. Both those limitations, in my mind, still favor Netflix.

Let me share some interesting studio exec comments that didn't make it into my piece...

    - Jim Gianopoulos, chairman of 20th Century Fox, told me that his studio had eventually gotten comfortable with Apple's DRM system, Fairplay: "Nothing's perfect, but they've worked hard. The better the content protection, the easier content flows... and the more comfortable content providers are about handing over their titles." He said that digital revenues simply won't grow in the presence of rampant piracy: "None of this works if there's a parallel flow of freely-available content."

    Gianopoulos also said he didn't think that digital rentals from Apple and others would necessarily undermine bricks-and-mortar rental chains, or services like Netflix. "People make choices, and they make choices that are most convenient to them. We're in all of those businesses, and we want to support all of them. It's up to those providers to provide good value."

    - Thomas Lesinski, president of Paramount Pictures Digital Entertainment, told me that last week's announcement from iTunes "will be the beginning of a significant digital media business." He added that Apple "learned a lot from the original Apple TV, and changes in the 2.0 version will get a lot of people interested in digital distribution in the home. It's a very easy-to-use product, and they lowered the price."

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