Apple makes web movie rentals mainstream

The biggest news at Macworld 2008 wasn't the launch of the MacBook Air ultra-thin notebook, it was a breakthrough deal with 12 major Hollywood Studios that could see the

Apple TV

become as big as the


. Here's how:

Part 1: Apple, Hollywood and video rentals

Part 2: Apple makes web movie rentals mainstream

Steve Jobs admitted on Tuesday that the company's first stab at Apple TV was a mistake. The version that launched at the start of 2007 was really just an over-priced media extender. It had limited appeal to anyone a) who didn't own an HDTV with HDMI or component video inputs or b) couldn't access TV shows, movies or other content from the Apple iTunes Store - that is, most of us.

The new version announced Tuesday - dubbed 'Take 2' by Steve Jobs - changes that in significant respects. It still only works with flat panel HDTVs, but it's now a standalone appliance in its own right, thanks to a free software upgrade. This enables you to directly access the iTunes Store - including buy-to-own TV shows and movies, and movie rentals - without having to dump them on a Mac or PC first.

Apple TV can also store up to 200 hours of H.264 video on its built-in hard disk drive (160GB version costs £299), which can be used to hold music and photos as well. It even still functions as a media extender - enabling you to access other content on your home network, or to stream video content from YouTube and photos from Flickr.

What Apple TV does and doesn't do

Unfortunately Apple TV still doesn't have a built-in TV tuner, disc drive or PVR, so it's not quite the 'DVD player for the 21st Century' that Apple has claimed. That may not matter if the predictions from Jobs and others are correct - that everything from TV broadcasts to video will be instantly and always available over the net, rendering TV tuners, disc drives and PVRs irrelevant.

However Apple TV should give rival video-on-demand (VoD) services pause for thought. Apple promises that new movies will appear on its service within four weeks of their DVD release, potentially putting it ahead of both Sky and BT Vision, when it's unveiled here later this year. Apple TV's user interface is so simple a child, no, a baby could use it and, of course, it's also capable of handling 720p high-definition video, with appropriate content also available from iTunes.

All this then means that you don't need a Sky HD box, you don't need an HD subscription and you don't need a Blu-ray or HD DVD player.

Value for money?

Apple TV is also great value for money too when compared to its rivals with prices ranging from £199 for a 40GB HDD box to £269 for the 160GB version. Sky's HD PVR, by contrast, costs between £199 and £299 depending on your Sky subscription package (which start at £16 per month), plus another £10 per month HD sub. You can also buy the box standalone for £399.

BT Vision is potentially better value as you get a free V-box Freeview PVR, with video-on-demand content costing as little as 29p. You'll also have to pay between £9 and £19 per month for a BT Total Broadband package (you'd also have to pay for some kind of broadband sub to use Apple TV too), plus £30-£90 connection and optional engineer installation charges. Pay-per-view movies cost between £1.99 and £2.99 each - prices that are inline with those that Apple may charge when rentals finally arrive here.

And of course there are also rivals services from Microsoft. Joystiq has compiled a handy table showing how Xbox Live Marketplace and Apple TV compare.

The Apple TV and iTunes combo is then far from being the only way to legally access movies online or at home. But don't underestimate its potential. That's the mistake many people made when they wrote off the iPod and iTunes. Apple TV could be big, if not bigger, than that.