Apple Announcements: iTunes Movie Rentals, Apple TV2

As many tech pundits predicted, Apple Inc. CEO Steve Jobs announced an upgrade to his company's Apple TV device. (See photo, left, from the MacWorld Expo by Gizmodo staff.) The new Apple TV allows users to rent movies from the iTunes store and play them directly on their TV screens. You don't have to stream them from a computer, you don't have to have a computer at all. The biggest surprise in the announcement is that all the major movie studios are participating.

Apple has a video guided tour on its web site now. And Macworld has a brief summary of features.

The implications of this device for the entertainment industry are potentially huge. In BusinessWeek magazine, the WGAw's Assistant Executive Director Chuck Slocum said "It could validate everything that we've been saying. ... If [Steve Jobs] also announces that it will be in high-definition and you can order from the TV, it will mean the creation of a whole new market." Well, Steve did, and it probably does. (HD content is rolling out already.)

Much as the iPod has changed the music business, Apple TV and devices like it promise to radically alter the home video market. As tech website Gizmodo puts it, "Netflix is screwed." That's debatable certainly, given Netflix's massive selection of titles and all-you-can-watch subscription model. But the company has made some defensive moves recently including allowing its subscribers to watch unlimited streaming movies on their computers and announcing a streaming set top box with manufacturing partner LG.

And as Apple TV (and NetFlix and TiVo) build this market for direct-to-TV streaming, don't think the cable companies will sit idly by. All of these new Internet-based services are variations on pay-per-view, something every cable company has been trying to promote for years. The cable companies are certain to redouble their efforts... and their boxes are already in our homes.

So however you define it, a market for "new media" distribution of Hollywood content is here and it is growing. This is not a theoretical construct, this is not a fad. It's time for the big media conglomerates to make a fair deal with the people who create the content that streams into homes and drives the bottom line. They can make that offer to the WGA or they can make it to the DGA if that will make them feel better. But the time to make that offer is now.