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Apple looks to movie rentals to revive Apple TV box

Price cut, new system software coming

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Macworld Expo Apple is to re-launch its Apple TV set-top box as a movie rental system, offering HD content for $4.99 a pop as a direct download. The hardware's getting cheaper too.

Regular, DVD-quality programming will be on offer to, CEO Steve Jobs said, at a lower price: $3.99 for new titles, $2.99 for old ones.

Viewers will have just 24 hours to finish watching a rented movie once they've started watching it. But they'll have up to 30 days to press Play before the content vanishes from the Apple TV's hard drive.

The downloads will incorporate a Dolby 5.1-channel soundtrack, and they'll also be available to Mac and PC users through iTunes in the usual way, and with the same restrictions. Jobs claimed movies can be watched almost as soon as they've started downloading.

They'll also play on iPods and iPhones - hence the addition of chapter marks, subtitles and different-language soundtracks to those two devices.

Jobs said all the major studios, including Touchstone, Miramax, MGM, Lionsgate, Newline, Fox, Disney, Paramount, Universal, Sony and Warner, had agreed to provide rental content - a big improvement on the turn out for iTunes movie downloads, launched last year. Then a much smaller number of studios were willing to participate.

Still, Apple managed to sell 7m movies in the last 12 months, though Jobs admitted this figure was lower than Apple had been anticipating.

Apple TV will also gain the ability to show photos stored on Flickr and websites hosted by Apple's own .Mac service. It'll now display video podcasts as well as the audio variety.

Movie rentals will become available in the US later today. The rest of us will have to wait until later this year. Similarly, Apple TV owners will be able to buy music and movies directly too. Purchased tracks and videos can then be synched with an iTunes library, much as iPhone downloads are today.

The new Apple TV will cost $229 for the 160GB version, down from $299. Presumably the 40GB model's for the chop.

Jobs said the new Apple TV system software will be available in two weeks' time.

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