Originally created 09/17/06

Apple unveils online movie store, gadget to connect TV



SAN FRANCISCO - Seeking to further push digital media into homes, Apple Computer launched its long-awaited online movie service Tuesday and showed off a device that will make it easier for consumers to watch the videos on television.

The iTunes Music Store, however, will initially carry movies only from the studios of The Walt Disney Co., where Apple CEO Steve Jobs is a board member. By contrast, www.Amazon.com Inc.'s movie service launched last week with distribution deals with seven studios - but not Disney.

Mr. Jobs said more than 75 films will be available on iTunes from Walt Disney Pictures, Pixar, Touchstone Pictures and Miramax. New releases will be priced at $12.99, when pre-ordered and during the first week of sale, or $14.99 afterward. Library titles will be sold for $9.99 each.

Other online movie services already exist but haven't attracted many customers. Apple is already being cast as a leading competitor with its entry.

Several sources at Hollywood studios said disagreements over pricing and other issues remain unresolved, but some analysts expect it'll be only a matter of time before more distribution deals are signed.

Part of the reason is the credibility that Apple has gained with its online music and TV show offerings: more than 45 million TV programs have been downloaded since they first became available on iTunes less than a year ago, and more than 1.5 billion songs have been purchased from the online store.

Another reason is Apple's strategy of bringing digital content stored on a computer and playing it back on a television - a challenge that has so far dogged online video providers and other companies looking to expand digital multimedia into the mainstream market.

As many expected, Apple is tackling that problem.

At a media event Tuesday, Mr. Jobs showed off a slim, compact set-top box, dubbed iTV, that will allow consumers to wirelessly send movies purchased online - and other digital content stored on a computer - to a television set. It will sell for $299 and be available early next year.

With iTV, digital content stored on computers could more easily be played on TVs, Mr. Jobs said.

"We think it completes the picture here. Now I could download content from iTunes. I could enjoy it on my computer, my iPod and my big-screen television in the living room," he said.

The device, which looks similar to a much flatter but slightly wider version of the Mac mini computer, will work with Windows-based or Mac computers that use the iTunes software to manage multimedia files. Phil Schiller, Apple's senior vice president of worldwide marketing, said the product is designed to work best with flat-panel televisions formatted for widescreen viewing. He refused to elaborate on other product details, such as what strain of wireless technology will be used to address potential video delivery-hiccup problems.

Similar media appliances that are designed to link a PC to a television already exist, but none have gained much traction, analysts say.

As a result, relatively few PCs are hooked up to television sets. Though others, such as cable providers and startups such as Akimbo Systems Inc., have introduced set-top boxes and services to deliver on-demand videos and TV shows through a broadband Internet connection, full-length feature films from major Hollywood studios either aren't on their libraries, or are available only on a rental basis.

Mr. Jobs also debuted downloadable video games such as Tetris and Bejeweled that have been designed for the latest video-iPod models. They can be purchased at the iTunes online store for $4.99 apiece.