Apple Looking Less Shiny? Look Again

(page 2 of 2)

Jobs denies there were any last-minute dramatics or super-charged negotiations involved in getting the studios to back his plan. "It wasn't a big deal," Jobs says in an interview. "The studios are all run by smart guys. They have iPods, and their kids have iPods, and they just want to get their movies out there." He says studios were enthusiastic when Apple came to them with an Apple TV that lets consumers buy from iTunes without leaving the couch. That wasn't possible with the first iteration of Apple TV, which even Jobs concedes was ill-concieved. "I used [the first Apple TV model] for a few weeks, and then I didn't use it much," Jobs says. "This time, I think we've nailed it."

The Entertainment Choice?

Jobs didn't get everything he wanted. The movies will only be available for rental 30 days after they become available as DVDs on store shelves. Over time, the industry will evolve to where digital rentals and DVD sales will start on the same day, Jobs reckons. Also, he won't discuss whether the studios will also let Apple sell their recent movies on iTunes. So far, only Disney (DIS) allows for sales as well as rentals. "We think this is the way most people are going to want to get their movies," says Jobs. "The lightbulb went off for us on this quite a while ago. Our focus is on movie rentals."

And the new services won't revolutionize how people watch movies. To some degree, the offerings emulate what is available through such means as ordering video on demand from cable or satellite systems, or via the Net using a Microsoft (MSFT) Xbox game console, TiVo (TIVO) set-top, or Netflix's (NFLX) new download feature.

Yet, Apple doesn't have to dominate the digital living room to benefit from Apple TV. The real win is if more customers—existing and potential—decide that Apple can meet the range of their digital entertainment needs. Once people make the shift to Apple's universe, they'll be tough to win back.

Burrows is a senior writer for BusinessWeek, based in Silicon Valley .