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Steve Jobs: struggling to redefine the TV paradigm

The devil is in the detail for Apple TV

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Comment Getting into the mind of Steve Jobs isn't all that simple, and sometimes you just have to wait until he tells you what went through his mind in order to explain the latest Apple phenomena. But the picture around Apple TV is starting to clear with some rumours and snippets revealed this week.

The first is a rumour only, that iTunes will soon launch a film rental site. Now that's interesting for oh so many reasons. The first is that Jobs has always said the way to introduce new media to existing entertainment is to allow for, and potentially copy, the way that people used that entertainment in the past. Music was purchased in singles, in albums and on DVDs, not rented, or bought as a subscription, which is why iTunes was offered in the same way. Film, he has said, is entirely different, but that's where our clues end.

Movies are either watched in the cinema or on TV, bought on pay per view, but more recently and importantly, they are both rented and purchased as a DVD. So when Jobs says Apple TV is an appliance like a DVD player, he is thinking about replacing the DVD, and so he would prefer to offer both rental and purchased content.

But in order to simplify the process the Apple TV device has to be out there in volumes. During its first year the Apple iPod sold not very many, and it was only really a success when iTunes came along, some time later. This could be what Jobs is planning for Apple TV, and it requires the creation of a low priced film service with a huge amount of content. Rental is the second wave of attack, because when Apple first began negotiation with the major US film studios, they refused to give in to Jobs' $9.99 one price fits all video purchase strategy, a fight which was well publicised at the time.

Instead, Apple got the same pricing as Amazon and appeared at that point to become sluggish and less enthused over movies on the internet. Pricing was at $14.99 for new releases with and library titles available for $9.99 for purchase to own. Apple was clearly unhappy and thought this was too complex a message and only a small amount of content was licensed. And Jobs went into a rethink.

That rethink was tricky. He would have to offer rental video, which is where the studios had been pushing him, but how could he emulate the DVD experience online, from iTunes? He would need a route from the download to the TV and it would need to be iTunes only and it would need a rental business model. If the rumours are right (and why wouldn't they be?) this will be announced at Apple's developer conference any day. Deals will emerge with Disney, of course, but also with Universal, Paramount, and Warner Brothers which leaves just Sony and it captive MGM and 20th Century Fox and perhaps Lions Gate to have a full Hollywood house.

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