Apple Vows to Succeed Where Botched Online Movie Services Failed

Apple to announce movie rental download program weeks after Wal-Mart cancels similar service for lack of consumer interest

Movie fans know going to the movie store isn’t always convenient and late fees are a pain. So why haven't downloadable movie rentals caught on yet? Even the infamous Enron had plans to produce infrastructure for video-on-demand libraries as early as 2000.

With the recent demise of Wal-mart's downloadable services, the time might be ripe for new blood. According to the Associated Press Apple will announce the new movie rental service next month that will work on top of its iTunes infrastructure.

The new service is not to be confused with existing movie and TV downloads on iTunes. The new service would increase content several times over, with titles from several different studios.

Apple has a much stronger user base for its iTunes service, which allowed Apple to attract its first major movie studio for the rental deal -- Twentieth Century Fox. Apple also agreed to license Fox its copy-protection scheme FairPlay, already built into Fox movie releases. This will allow Fox DVD films to be transferred to computers and iPods for playback.

For many movie fans the real viability for download services like this comes in the price per movie. If Apple can provide fast downloads of first run movies at a price within a few dollars of what the same film rents for in stores, the service should be a hit. However, if Apple and Fox price the download rentals too high the vast majority of movie fans will continue to make the trek to the movie store.

Rumors that Apple was considering a movie rental service surfaced in June of 2007. At that time the rumored price was $2.99 for a 30-day rental of a movie via digital download. If Apple offers new releases at that price the program would likely be very successful.

Wal-Mart recently nixed plans for its download movie program after it failed to meet expectations. This cancellation left those who had bought digital movies from Wal-Mart’s service hanging. The flicks can be viewed after the service was shut down on December 21, 2007, but they cannot be transferred to another PC.