Apple (AAPL) is set to finally enter the online movie rental business Tuesday. Unlike the 2003 debut of its iTunes music store, it will face a host of competitors who are already there. And just like 2003, it won’t find itself competing with a single, established player with a substantial lead — the race is wide open.
A quick handicapping guide:
Amazon Unbox: Amazon’s download service has a significant rental catalogue and deals with all the major studios but Disney. The service is helped by a distribution deal with AOL and TiVo (4.3 million users), but is hurt by bulky DRM technology. And like many Apple competitors that use Microsoft’s DRM, Amazon’s service doesn’t work with Macs. Ugh.
Netflix: With a user base of 7 million and existing relationships with all the studios, Netflix is coming into digital rentals with a running start. It renegotiated deals with the studios to allow unlimited movie streaming for subscribers, and announced that it will build a set-top device with LG to allow those movies to be streamed to television sets. Potentially one of Apple’s strongest foes.
Blockbuster Total Access: Blockbuster acquired Movielink from the studio consortium last summer, and with it got digital deals with five studios. Blockbuster is de-emphasising its mail-order rental business, and subscribers have fallen to 3.1 million — but it could push some of those mail-order subscribers to try a digital rental. Blockbuster gets 47% fewer online visits than Netflix, according to Hitwise.
Vongo: Starz’ subscription service allows unlimited downloads of Starz films for $9.99; also offers movies from other studios on a pay-per-view basis. Last week, Vongo announced a deal with Samsung to allow downloads to a portable P2 system. Greets Mac users with an “incompatible OS” message.
Vudu: Offers 5,000 titles on-demand through a $399 set-top box introduced in September; movie rentals cost $0.99 to $3.99 and downloads $4.99 to $19.99. Studio-supported Moviebeam, also a set-top play, folded last year. Vudu attempted to jump-start its service by offering free boxes to people who purchase Sharp Aquos high-def TVs over the holidays. Our gut: If people are going to buy a new box to watch movies in their house, it’s going to come from a name-brand company.
Hulu: The NBC U/News Corp. joint venture is still in beta, but it has a limited selection of films from Universal and 20th Century Fox studios. If offers ad-supported films — basically the cable model on the web — but if Hulu is able to build a big catalogue of films, it could present a problem for iTunes.
Microsoft/Xbox 360: Microsoft offers a catalogue of films for direct download to the Xbox 360 from Disney, Warner Bros. and Paramount. Movie downloads are included in the Xbox “gold” subscription for $59.99/yr. Microsoft has sold nearly 18 million Xbox 360s, so far, giving it a huge potential base — and that’s been Microsoft’s goal from the start.
CinemaNow: An unimpressive old-timer, born in 1999, CinemaNow has a lot of “firsts” under its belt: The first service of with all the major studios on board, first to launch an online PPV product, etc. The PC-to-TV divide is a problem — getting the movie to your HD screen isn’t easy. The company claims 1.5 million monthly users.
Cable/Telcos: They’ve already got a box in most TV homes, and they already offer 24-hour movie rentals. Their limited catalogue is what gives online competitors an angle, and they don’t offer the option to own or move video to other devices. And unlike Apple, they can’t rent movies to their subscribers the day the DVDs go on sale.
Jaman: Niche startup boasts 1,000 downloadable documentaries and specialises in foreign films. Cute, not relevant.
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