Apple, 20th Cent. Fox Sign Video Rental Deal

What seemed to grow more and more apparent throughout the last few months in advance of Macworld Expo ’08 has finally been outed by big media.

The Financial Times reported early yesterday (in its trademark salmon-colored pages) that Apple and 20th Century Fox, a entity held by Rupert Murdoch’s News Corp, inked a deal that would grant iTunes users the option to rent films produced by the studio. The news of the impending partnership comes in anticipation of the consumer-centric conference to be held at Moscone West in San Francisco, California.

An immediate result of the announcement was the journey of Apple’s share price on the NASDAQ exchange north of $200 for a short while Wednesday. The stock fell to 198.95 by the closing bell, and today (as of 10AM EST) spends its first few hours in play at about $202.

Apple CEO Steve Jobs presumably welcomes very much the bullish attitude investors have portrayed as the company approaches zero hour and the head himself prepares (with classically specialistic attention paid to the minutiae of the his hallmark Keynote presentation in particular) for the Expo to take place from January 14 through 18.

Though Macworld Expos of years past have traditionally been points in time in which Apple (previously known officially as Apple Computer, Inc) has debuted new and/or refreshed hardware offerings and staples, next month’s event is likely to be spent by the Cupertino-based company promoting advances in software. Hence the chatter about the expected emergence of digital, over-the-Web video rentals.

Whether Apple can seduce production studios large and small in addition to 20th Century Fox will of course determine the likelihood of the storefront’s success. While iTunes music has sold at a brisk rate for the past couple of years, its video selection – comprised of feature films, television programs, and those clips once broadcasted by the MTV network – has shown to have a far less notable trajectory.

They do sell, mind you. The TV catalogue in particular has garnered considerable attention since its small (though ambitious) beginnings. Only, on the whole, they take a distant back seat to the storefront’s digital audio warehouse.

But there’s has been ample evidence as of late that the desire for on-demand Internet solutions has grown quite a bit. The sheer idea of iTunes movie rentals has stirred bloggers ever since Apple introduced its Front Row media software (and later its Apple TV set-top box) to formulate predictions as to when the Man in Black and Blue will “do things right,” as it were, and establish an alternative or partnership to/with Netflix or some other movie subscription service. Clearly the answer to such inquiries is now writ large across the Net: the moment is soon to arrive.

Unfortunately, if the Financial Times is eminently correct in its assertion that Apple will work with an arrangement that involves the time-sensitive distribution of film titles to iTunes users via its rental system-to-be, the debut to come in mid-January may well be met with mixed reviews. The “time-sensitive” concept has long lost its acceptance among consumers. Instead, the Netflix-like pay-per-month-and-keep-a-set-number-of-films-indefinitely has become the new norm.

Our own assumption as to what we can expect to arrive as an iTunes update next month is that the release will be met with begrudging disappointment (but acceptance still). Though Mr Jobs is tasked with pleasing the content providers as much as his own company’s customer base today, the fact that inconvenient compromises will have to be made by potential renters to satisfy their demands will mean any approval of the new move is bound to be less than wholehearted.

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