PRODUCT REVIEW
Apple's New Movie Rentals: Mostly Awesome

So I took it for a spin last night, and let me tell you, Apple is onto something. I'm not ready to ditch my Netflix (Nasdaq: NFLX) account, but it's clear that Apple is going to be serving me a lot more movies in the near future.

First, here's the deal: Apple will continue to sell movies via its iTunes online store, starting at US$9.99 for older titles, with higher prices going to newer releases. Customers will have the option to rent movies for $2.99 for older titles, $3.99 for new releases, and a dollar more for their high-definition versions. You have 30 days to start watching a movie, but after you start, you've got to complete the movie within 24 hours. Within that 24-hour window, you can watch the movie as often as you like.

A handful of movies are available to rent now, and by the end of February, Apple plans to offer more than 1,000 titles, including 100 in HD, which will also support 5.1 Dolby Digital surround sound. All of the major Hollywood studies are involved -- 20th Century Fox, Disney, Warner Bros., Paramount, Universal, Sony, MGM, Lionsgate and New Line -- so the library of titles should continue to grow well beyond 1,000.

Coming to an Apple TV Near You

For now, the only way to rent a movie from iTunes is to use iTunes to start the process. Currently, the iTunes store doesn't do a good job of listing which movies are available to rent -- it's hard to know if you're seeing just the rentable movies, the buyable movies, or both. By clicking on a movie, however, you get a page with Movie Notes, Plot Summary, file size, format (i.e. widescreen), its rating, a button for viewing the trailer, a button for buying the movie, and if it's available, a button for renting it.

In about two weeks, Apple plans to release an Apple TV software update that will let Apple TV owners browse, buy and rent movies directly from their Apple TV that's connected to a TV and a high-speed Internet connection.

Minor Glitches

As for me, I chose to rent "Pirates of the Caribbean: At World's End." I clicked the Rent Movie button, entered my account details, but got stuck with an "unknown error occurred (5002)" pop-up window. I tried again, and iTunes prompted me to look at my address on record again because it didn't appear to a valid U.S. address. The address looked fine, has worked for months, so I left it as-is. I tried again, and the process seemed to work normally. The widescreen movie -- 1.83 GB worth -- began downloading via iTunes.

I gave it a couple of minutes, then opened the movie in iTunes under a new Rented Movies section that appeared in the left side column, under the Library section in iTunes, and started watching the film -- while it was still downloading. Worked great. No hiccups.

Moving It Around

Once you've downloaded the rented movie, you can move it to a video-capable iPod or iPhone, or watch it on your TV via an Apple TV; however, to transfer the movie, you must be connected to the Internet -- no doubt for some sort of DRM (digital rights management) check done by Apple.

I decided to move the film to my iPhone, and to do it, I simply clicked on the Video tab after selecting my connected iPhone in the left side column of iTunes. The Rented Movies section reappears if you didn't have any movies already rented, and it shows you the movies that are in your iTunes library and offers a big directional "Move" button next to it that will move the movie to a box that belongs to the iPhone. It's astoundingly intuitive. Click apply, and the file will begin transferring.

Once it's transferred, the movie no longer seems to exist in iTunes at all. If you want to move it back, you've got to do the reverse process, which seems to copy the entire movie once again. Apparently, you can watch your rented movies as often as you like on any of the supported devices within the 24 hour period, but you can only watch it on one device at a time. Think of it in terms of a DVD rental -- you can move a DVD disc around, but it'll only ever play on the device on which it's physically located.

Here's a well-thought feature: If you start watching the movie on one device, and then move it to another device, the new device recognizes exactly where you left off. Wicked cool.

Silly Downsides

First, the 24-hour time limit is a disappointment. For busy people, it's not uncommon to break up watching movies. Sure, movies are meant to be seen all in a single sitting, but at least a quarter of the movies that I watch at home, I watch over a couple of days. A bit on a lunch hour, a bit before a teleconference call and a bit before bed. For travelers, this 24-hour limit borders on the asinine. A three-day conference lets a customer start a movie on a plane to the destination, either on an iPod, iPhone, or laptop , but if the customer takes a nap and doesn't finish the movie on the flight, the clock is ticking. There's no saving the movie for the return flight home. If some unplanned event comes up during that 24 hour period, too bad, the customer is out of luck.

Odds are, you can thank your Hollywood executives for this one because I can't, for the life of me, imagine Steve Jobs saying, "Oh, by the way, Apple wants to limit rental playback time to 24 hours. Remember how Blockbuster used to have an overnight rental policy and got rid of it? Yeah, we want to start with that kind of policy, you know, the inconvenient one that consumers really dislike."

Seven days would make a lot more sense. By offering the rentals in the first place, Apple has the DRM issues worked out, so a longer time period should be totally doable.

Here's another little irritating limitation that Jobs mentioned at Macworld but hasn't been noticed widely by the press yet: iTunes customers won't get to rent new releases until 30 days after the DVD release. This is clearly a Hollywood-driven rule designed to protect highly profitable DVD revenue. If iTunes Movie Rentals became as successful at renting movies as iTunes has been at selling songs, Hollywood might actually lose money, not to mention cede a little more control to Apple. Plus, if there's anything major movie studies hate to give up, it's control. So brand new releases ... you'll have to wait 30 days.

Overall Experience

Like most Apple products, the entire iTunes Movie Rentals process is easy, intuitive and elegant. For iPhone and iPod users, the ability to rent movies at an industry competitive price -- and then put those movies on your portable device without undergoing a time consuming and possibly illegal DVD ripping process should be welcomed by many. Plus, customers who have an Apple component cable that can connect an iPod or iPhone to a TV will be able to use their iPhone or iPod as a portable device that can play a rented movie on a friend's TV -- quite handy.

The quality? Not bad. When the HD option hits the iTunes Movie Rentals section, it should resonate well with Apple TV owners, if not encourage entirely new sales of Apple TVs. Plus, being able to browse and rent a movie from my couch that I can watch on my HDTV within seconds -- I'll be sitting there in two weeks with a bag of potato chips in one hand and my Apple remote in the other.