Visions of a Disc-less World

By Rob Pegoraro
Thursday, January 17, 2008


Steve Jobs's keynote at the Macworld Expo is almost never a dull show.

His opening presentation Tuesday showed how well Jobs pitches his own products, bubbling with an isn't-that-cool enthusiasm the rest of the business seems to have forgotten.

But a "Stevenote," as it is known in tech parlance, also has one more thing sorely absent from most industry executives' speeches: surprise.

Apple works hard to keep its news secret before Macworld, then announces it's going in a direction that people didn't expect.

At previous Macworld Expos, Apple has introduced compact, stylish all-in-one desktop computers when other machines were big, bulky, beige boxes. It rolled out affordable wireless networking when only computing pros messed with home networks. It launched the iPhone when most smartphones were required to meet the needs of busy executives, not bored commuters.

With Tuesday's product introductions, Apple floated a particularly audacious suggestion: Get rid of those shiny discs we use for songs, movies and software. The company that popularized homemade mix CDs and DVDs with its iTunes and iDVD programs now seems eager to let the CD and the DVD fade away.

At the Moscone Convention Center here, Jobs introduced movie rentals at the iTunes Store and an updated Apple TV media receiver that lets you download and watch the movies on a TV set without using a computer. He followed up by unveiling the MacBook Air, an ultra-thin laptop without a CD or DVD drive.

This might sound crazy, like suggesting to the users of 1998 that the floppy disk had outlived its usefulness. But just as Apple was right about going from floppy to compact disc, it could be right about going from disc to download -- if the movie industry will cooperate.

The idea makes sense on the basis of price alone. The cost of digital storage -- especially the most portable and compact kind, flash memory -- has cratered over the past few years, allowing devices to hold more data yet cost less each year.

Consider the iPod, which every year holds more gigabytes.. It makes sense that music sales have been moving from CDs to digital downloads. Record companies abandoning "digital rights management" copy controls should spur that shift.

Software is also easy to download. Only a handful of big-ticket items, such as Microsoft Office and Apple's iLife and iWork, have to be installed from discs -- and many computers come with those applications installed.

The only holdouts are movies. Online movie sales have been a bust so far. In Tuesday's keynote, Jobs said the 7 million movies that sold via iTunes "did not meet our expectations" -- and Apple has one of the smoothest movie-download systems around. In comparison, there have been 4 billion iTunes music downloads.

For its second stab at the movie problem, Apple is offering rentals. New releases will rent for $3.99 each, with back-catalogue releases at $2.99 each. You'll have 30 days to start watching them, then 24 hours to finish. Apple has signed every major movie studio for the venture.

The iTunes Store has about 1,000 titles for rent, and more than 100 high-definition movies, which rent for a dollar extra.

The updated Apple TV is a huge part of this revived movie download strategy. It will let customers browse, pay for, download and watch movies without touching a computer, keyboard or mouse. And at $229 ( $329 for a higher-capacity version), it beats the price of a Blu-ray player, Hollywood's favored high-definition movie player.

Apple TV, like the version introduced last year to disappointing sales, can also play digital music and videos stored on your computer, display your digital photo albums and even play YouTube clips off the Internet. All those features leave even fewer reasons to take a disc out of a case in the living room.

However, conditions attached to these movie rentals could end up being restrictive enough to snuff out the whole thing. It amounts to a very short-term rental; offline video-rental deals don't allow just a day to watch a movie. Also, the copy controls attached to each rental prevent it from being viewed with anything but Apple software.

Worst of all, the new HD rentals are imprisoned inside the Apple TV. You can download them only to one of those boxes and can't move them to an iPod or a computer.

Hollywood just can't seem to make movie downloads easy for consumers to use. It has to impose just enough nitpicking limits to keep users wondering if they wouldn't be happier sticking with DVDs.

The best hope for disc-free movie viewing may be a replay of Apple's history with digital music. When iTunes was launched, it had a limited inventory and copy controls. But once the music companies got over their initial fears about pirating, the store enlarged its catalogue. The result is that a lot of people won't think of going anywhere but the Internet for music.

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