According to a report in the Financial Times, Apple has inked a deal with News Corp.’s 20th Century Fox that will bring a new video-on-demand service to iTunes. The companies are expected to announce the deal on January 14 at MacWorld.
The agreement reportedly will allow consumers to rent, for a limited time, just-released Fox movies via digital download from iTunes. Although Apple already peddles newly released movies through a deal with Disney, this is the first time iTunes will be renting rather than selling movies digitally.
MGM, Lionsgate, Viacom, and Paramount restrict their digital libraries to older titles. However, the Fox deal could open the floodgates for new release rentals. Apple is reportedly in talks with Paramount, Warner Bros., and Sony to make their new releases available on iTunes for rent or purchase.
Leveraging Apple Ecosystem
The reports of a movie rental deal with 20th Century Fox, if they are accurate, represent an important shift in Apple’s business process, according to Michael Gartenberg, an analyst at Jupiter Research.
The deal, Gartenberg said, is Apple’s recognition that renting movies is an understood business model that could add profits to Apple’s already swelling bottom line.
“The idea of people being able to rent movie content, put it on their iPod, watch it on the go, and then move on to the next thing is definitely a concept that will resonate with consumers,” Gartenberg said.
Of course, iTunes won’t be the first digital-download store to rent movies. Netflix and other companies offer digital rentals. But Apple’s deal with Fox — and the possible deals with the other studios — could shake up the decades-old rental business.
“The Fox deal could become a tipping point for digital movie rentals because Apple has already built out this tremendous ecosystem between the computer, the iPhone, and the iPod,” Gartenberg said….