DigitalSandbox

The Apple rumor-mill is running full tilt this week. Apple announced that they will be hosting a special event on the 12th of September. These special events have been Apple’s major avenue for product releases lately since they have decided to keep the releases more venue appropriate.

Of course, with limited information on what the event is we have to try to guess what it is about. The invite (pictured at the left) offers a few clues, with the title and background bringing to mind a movie premiere. This, in turn, brings to mind the much rumored iTunes Movie Store. (Sidebar: don’t you think the iTunes Movie Store sounds like an oxymoron? Maybe it’s time for a name change. iMedia doesn’t sound right, but it fits better.)

Of course the rumor mill is abuzz with that and more. The “true” video iPod is a favorite. New hardware from the Merom-based MacBook Pros to 23” iMacs (24” iMacs were released today) has been thrown around. The perennial iPhone is even popping up in analyst expectations now.

Best Guesses

Today’s harware releases have effectively killed some of these rumors as they are now fulfilled. I think the fact that they released these items ahead of the event says a lot. With the hardware out of the way it is effectively “in place” for the release of whatever is coming. So what does that leave us with.

I think that we can pretty much bank on the movie downloads. There are too many other companies that have been able to secure deals with the studios and are offering the service. Other small companies have proven that a market exists. Now with the announcements that they will actually let you do something with your movies (i.e. burn them to DVD), the stage is set for a big player like Apple to enter.

The sticky point is that the video business is different from the music business. For the most part, we don’t buy movies. Sure, we all have our collections, but most of us use that for our favorite movies. How many times have you heard this about a movie, “meh, it was worth a rental.” The same goes for TV shows on iTunes. I wouldn’t mind seeing a lower “rental” price for those of us that don’t want to collect them. Something like 99� for a limited number of views and/or time would be nice.

I think with the higher cost of movies it becomes imperative that a rental option is available. I will gladly pay a few dollars (like $2 or maybe $3) to rent a movie when I feel like it (which is almost weekly). It saves me a trip to Blockbuster (which charges like $3.79 or something for new releases) or redbox (which charges $1 per day). For those that I want to buy, I would pay somewhere in the vicinity of $10. $9.99 gets thrown around a lot because that is what they charge for albums on the Music Store.

If you really want me pay you have to offer me higher definition. Don’t get me wrong here. I am not talking about High Definition. While I wouldn’t be opposed to it in any way, I just don’t see the point. Not a lot of people have HD TVs (myself included) and it would require a metric ton of bandwidth. What I would like to see at least standard definition. Currently the videos are all “iPod” definition which is half of standard definition. While I hear that it scales up nicely on a TV (and it doesn’t look too bad full screen on my monitor) I would still like to have standard definition if I am going to pay for the stuff.

The other thing that needs to happen is the ability to burn DVDs. Currently I am limited to watching the shows I download from iTunes on my computer. I can hook the computer up to a TV if I choose, but that is a hassle that 95% of people don’t want. Other companies are announcing that DVD burning is possible with their service and I don’t expect Apple to offer less. If they really want to impress me they would allow me to download the DVD disk image (an ISO image for my PC-using readers). That would be a VERY appealing feature. Rather than re-encoding from H.264 MPEG-4 to MPEG-2 I get a full quality DVD ready to play.

Reading the Tea Leaves

What I hope to see is movie downloads available for both rental and purchase. It just makes sense that this is where we are heading. I expect that we will be able to burn DVDs of our purchased movies and TV shows. I hope that they are able to allow controlled burning of rentals as well. I don’t know if this is even possible, but it would be very cool.

I think Apple is getting ready to get into the entertainment distribution business in a big way. We aren’t there yet, and this special event will only be another piece of the puzzle, but we are on the path. The improvements to Front Row in Leopard will be, I think, the final piece.

You can see it everywhere in Apple’s consumer lineup. The Mini is just begging to be integrated into a home entertainment set up. Many people have done it and love the utility they get out of the system. The iMac while not a great buy for integration, makes a very capable Home Entertainment Center in a Box for those with little space or no TV. With the 24” model you get a HD TV, a big hard drive, and plenty of power. Plug in a set of 5.1 speakers (or a reciever) and you are ready to go.

The only thing missing is the content. Many have bemoaned the lack of a built in TV tuner on the iMac (and the Mini). It seems like the perfect fit. Plug in your cable and you have everything you need right there. So why didn’t Apple include one?

The answer is because they want to replace your cable company. I know that sounds like a tall order, but hear me out. How much do you pay for cable/satelite? Around here it is $43/month for basic cable from Comcast and the cheapest satelite I can find is the Family Package from Dish Network for $20. That package is pretty limited and so you need to go up one to the America’s Top 60 for $30/month. Add in local channels and you around $35/month.

Assuming that you pay on average $40/month for programming that translates to $480/year for TV. How much TV do you actually watch? How many of those channels do you never even look at except when you pass over them on your way to something else? I know that there are less than 10 shows that I really ever watch. 24, Monk, Psych, My Name is Earl, and The Office are the only ones I can come up with off the top of my head.

If iTunes is charging about $35 for a Season Pass I can buy 10 shows (just the ten that I actually watch) for only $350/year. And I own those shows. All Apple has to do is charge me monthly for it and it feels no different than cable. I come home and see what new episodes I have and decide if I want to watch them. If a new show comes out I can try it for $2 (a lot of shows even offer the first episode free) and if I like it I can get it it too. I save money over cable and Apple revolutionizes the TV industry like it did the music industry. No longer do I pay for a bunch of stuff I don’t want. I only buy what I use. Simple. And that’s if they don’t even change their pricing scheme or business model (i.e you buy everything instead of rent).

The HD Wilcard

Here’s where I think that things get interesting. Today’s hardware releases make it so that every Mac available can play full 1080i/p HD video. The new entry level system for the Mac Mini line can handle it now and the new 24” iMac can even display it natively. The piece of the HD puzzle that is missing is the media. As of today both the HD-DVD and Blu-Ray camps are battling to see who comes out ahead and is crowned the king of High Definition Media.

Now imagine that Apple offers HD video for download. We can’t burn that to a disc yet because the two camps are still trying to figure out who is better. But if you have a Mini in your home entertainment setup you don’t need an HD-DVD/Blu-Ray player to play it. You just play it off the hard drive. Apple could be a means of getting HD video into homes now. Then when a victor is crowned you can burn it onto whichever media won.

With this setup, your Mac is now the center of your entertianment universe. You plant a Mini in your home entertainment center and you can use it listen to music, watch DVDs, watch TV (that you have selected), browse through photos, and more. And since it is on the network it becomes the hub of entertainment for all the systems in your house.

The only thing left for Apple to do would be to come out with a box that hooks up to your equipment and your network with just a Front Row interface. That is all it does, it stores and distributes media. It would be a stripped down system with enough power to handle HD video, and enough storage to hold alot of stuff. No email or other basic computer functions. Just media. But I may have already mentioned this device before. I don’t think we will see it on the 12th, but I think that it is coming.