Why Apple Rental Plan Alienates Most Studios


One studio exec noted that increasing concerns about digital monetization in the creative community, such as Modern Family creator Steve Levitan's recent comments to THR regarding Hulu, could provide an edge over Disney and Fox when it comes to signing top writing and producing talent.

Another competitive edge also could come to the growing list of services competing with Apple to bypass multichannel providers into U.S. living rooms, from video game consoles to Internet-connected TV sets. A few execs highlighted Netflix's recent syndication deal with Warner Bros. for TV content including Nip/Tuck as an exemplary model (Netflix also will be accessible via Apple TV).

The addition of 99-cent rentals also is prompting bewilderment by observers who note the increasing vulnerability to cannibalization among digital platforms devoted to the same programs.

Disney strategy in particular was described by one rival exec as "schizophrenic," considering its series pop up on, Hulu, Hulu's iPad offering and now Apple TV.

The downside of Apple's rental model also was recognized on Wall Street, where Evercore Partners analyst Alan Gould noted: "We recognize the studios have to provide a reasonably priced online version of their content or illegal downloads will become pervasive. However, that does not mean the studios have to provide the product at a long-term money-losing price."