Apple iTunes: Music Subscription No, Movie Subscription Yes

April 12th, 2007

AppleIf Apple is even remotely thinking about offering iTunes Store subscriptions for its music, I really hope they don’t - and instead apply the subscription model to iTunes Movies instead.

I just read this Ars Technica article saying that the sales of downloadable movies through the iTunes store haven’t been so stellar. No big surprise there, from where I stand. Negatives are studios, content, access, price, and quality. I want to add extra emphasis to access.

I’m used to the rental model of movie watching. I don’t want to own the majority of movies I see. For the movies that I do want to own, I want high quality and a permanent format like a DVD. The Apple downloads don’t offer either.

But even if Apple goes with the rental model, they’ll be hard pressed to compete with Netflix, which offers DVDs in the mail for a price that’s pretty darned basement. For a little over ten bucks a month you get as many DVDs (one out at a time) as you can watch and mail. I figure I go through about seven to ten movies a month. You can do the math there, but it basically plummets the cost of a movie rental to a little more than an iTunes music track.

Yeah, I don’t think Apple will be allowed to sell Pirates of the Caribbean for that price, either.

The only way I see Apple competing is to have a subscription option. And even then, they lose to Netflix in terms of quality and selection by a mile.

I think the Apple Movie Store is a great idea and totally forward thinking, but I’m not cancelling my Netflix account any time soon. But I am using the iTunes Store to download video, for those Cylon-based television shows that aren’t on DVD yet.

Disclosure: I own a tiny amount of Apple stock.

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Viewing 3 Comments

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    I think something is going to have to change, but I'm not sure what. I'd definitely advocate a video subscription model. But instead of movies, I"m concerned about tv shows.

    When I buy a track for a dollar - its priced just about right. I get value from that track time and time again. but with most TV shows, once I watch it - it's over. The Season passes cost as much as the DVDs, and so most the time I just grab an episode here or there that I miss. Now, some shows I watch and I want to keep forever because I will watch it again - like Scrubs episodes. But if they make tv rentals and price them at a dollar, they'd have me. I'd probably watch every show I watch on iTunes.
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    Gideon, I hear you on the TV shows. I would be totally happy if it were cheaper. $1.99 a show is just on the edge of my comfort level.

    It seems to me the major studios still think their stuff is worth a heck of a lot more than what many people would be willing to pay, ultimately. Especially when you can watch the shows for free on TV albiet with ads.

    It will be interesting to see how this shakes out.
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    I've been saying the same thing on my own blog... it only makes sense to go subscription -- Netflix and LG are teaming up to push a set-top box (see: http://www.mikull.com/netflix-developing-set-to...) -- which to me is an Apple TV killer.

    One would think the move industry would support Apple here. Hypothetically speaking: I have a mac. Currently there is no LG box and only PC streaming from Netflix... so I rent a movie, get it in the mail, and rip it to my computer easily with handbrake. Pirating made easy, potential P2P ready to go... For the same price and more features, I rent through iTunes and watch in my Apple TV. It's gone in 24 hours, and that's that.

    But to return to your point, I dispute you here: if Apple went subscription, they could match (or potentially beat Netlflix), as their overhead is much lower. They need only have 1 video source, and there distribution is digital. Their server farms vs. all the labor (slave as it may be) to mail out those DVD's they had to buy. Correct me if I am missing something, but isn't it a steal for Apple to simple match it?

    People have been drooling over the idea of an ITMS subscription for a long time... this would be the winner.
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