Apple overhauled key elements of its online video strategy following an admission by Steve Jobs that the company's early efforts had been a disappointment. He confirmed earlier reports of a new online rental service for movies and a revamp of the Apple TV set-top box so that viewers can stream movies direct from the internet, without the need for a computer.
Jobs conceded that customers had not taken to watching online video the way Apple had expected. His comments came at the MacWorld show in San Francisco. The company's initial plan had involved selling movies on its iTunes store that customers could download to their computers, then use the Apple TV box to watch them on their TV sets. So far the company had sold seven million movies. Jobs said: “That's more than everyone else put together, but it did not meet our expectations. Rather than buying movies, viewers would prefer to rent them.”
Under the new plan, movies will be released to rental 30 days after their DVD release, with new titles renting for $3.99 (E2.73) each and older movies for $2.99. Once downloaded the movies remain on the hard drive for 30 days or for 24hours after a viewing has started.
Thomas Lesinski, president of Paramount Pictures Digital Entertainment, called the rental service a “defining moment. This is really going to take things to the next level.”
Backing from competing studios across Hollywood was vital. “All the studios are supporting this which will make it a success.”
Jobs also admitted that its plan for letting viewers stream video from their computers to their TVs had failed. Apple will offer a free software upgrade for existing boxes so that they can access video direct from the internet, he said, while the price of the Apple TV will fall from $299 to $229.