Apple, Hollywood Close To Streaming Movie Deal? - InformationWeek

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10/13/2011
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Apple, Hollywood Close To Streaming Movie Deal?

Reportedly negotiating with movie industry representatives to let consumers buy movies from iTunes and access them via streaming from any Apple device.

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Apple is said to be close to a deal with Hollywood studios to store and stream movies from the cloud.

The Los Angeles Times reports that Apple has been negotiating with movie industry representatives to allow consumers to buy movies through iTunes and access them via streaming from any Apple device.

Apple presently offers Apple TV, which allows consumers to rent movies and buy TV shows. In each case the content must be downloaded to a computer through iTunes first, which takes time, as opposed to a stream that plays back immediately. The downloaded content can then be streamed from the user's computer to Apple TV. iTunes provides the ability to purchase a limited number of digital films, but purchased content resides in the buyer's iTunes library.

A streaming deal would make Apple TV, which the company has characterized as "a hobby," more competitive with the streaming services offered by Amazon and Netflix. And it would enhance the value of iCloud, Apple's new cloud service. iCloud presently doesn't store video content.

[ Apple's iCloud depends on iOS 5. See what iOS 5 has to offer. ]

iCloud hosts consumers' personal content, and content purchased from iTunes, and makes those files available across all of the subscriber's Apple devices.

The talks between Apple and Hollywood come at a pivotal time: The major studios, except for Disney (which has close ties to Apple), have just launched UltraViolet, an online digital film library. The project is an effort to avoid being left behind as content distribution shifts away from physical discs toward downloads over the network.

It's also an effort to sustain the important DVD/Blu-ray revenue stream upon which the movie industry still depends--the initial crop of movies available through UltraViolet come in the form of physical discs that have digital copies and associated viewing rights bundled with them.

Apple, meanwhile, has been spearheading the move toward network-based distribution and away from discs, having been the first computer maker to achieve broad market success with a notebook without a disc drive, the MacBook Air.

The problem facing Hollywood is that some 66% of online movie sales go through Apple's iTunes Store, according to the Los Angeles Times. And that's to say nothing of Apple's dominance of the tablet market: The company's iPad is said by ComScore to account for 97% of tablet Internet traffic. Without Apple's support, UltraViolet faces an uphill climb to mass market acceptance.

But by working with Apple, the studios risk cementing Apple's status as the preeminent digital toll collector. Apple's support would probably guarantee the success of UltraViolet even as it ensures that Apple can extend its dominance of the online music and apps businesses to the online movie business.

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