Apple announces movie rentals through iTunes store

For Apple, aaplit's on with the show.

Responding to lackluster sales of online movies, Apple CEO Steve Jobs on Tuesday announced movie rentals through its iTunes store. Apple cut deals with every major studio, including 20th Century Fox, Paramount, Sony, sneMGM mgmand NBC Universal.

It's a victory for Jobs, who has been tangling with the major entertainment companies about pricing. A few months ago, NBC Universal pulled its TV shows from iTunes in a pricing dispute.

"We had a real meeting of the minds" with the studios, Jobs told USA TODAY in an interview after his keynote speech at the annual Macworld conference. "Everybody has tried selling movies, and we all have failed. Our goal is to learn from our mistakes quicker than anyone else."

NBC Universal pulled its TV shows from iTunes last summer, saying it wanted to price shows higher than Apple would allow.

"Everybody lost in that one," Jobs said. "We lost. NBC lost. Customers lost."

Still, NBC Universal was receptive to his overtures to rent movies, he said. "They're good people. They have kids who own iPods and iPhones. They know this makes sense."

Apple first introduced movies for sale in 2006, at prices from $9.99 to $12.99. Now, movies are available to rent for $2.99 to $3.99, or in high-definition for a dollar more. Movies will be available on iTunes 30 days after their release on DVD.

Several others have tried offering movies online, including online service Movielink, mail-order video rental firm Netflix and Amazon, but the films don't play on iPods.

Nearly 150 million iPods have been sold to date, says analyst Gene Munster of Piper Jaffray. "This is a big deal for Apple," he says.

Adds analyst Michael Gartenberg from Jupiter Media: "For most people, if it doesn't play on your iPod, it doesn't exist."

As part of its renewed entertainment push, Apple also has reinvigorated its nearly year-old Apple TV, a device designed to watch online content on a TV set. Jobs hopes the huge movie offering on iTunes will sway consumers to give Apple TV a try. He announced a price cut to $229, down from $299.

Apple has changed one of the major consumer complaints — that content had to be first purchased via computer to be played on Apple TV. Now, you can make a purchase directly on the Apple TV using a Wi-Fi wireless connection.

Existing Apple TV users must download a software update to get the new features.

The past year was a record setter for Apple, with best-ever sales of Macintosh computers, and enthusiastic consumer reaction to the iPhone. Apple said it has sold some 4 million iPhones to date, which beat analysts' most optimistic projections.

While the Mac faithful oohed and ahhed at the announcements, Wall Street wasn't as impressed. The stock closed at $169.04 a share, down $9.74. But that's because investors expected the Tuesday announcements and bought in anticipation, Munster said.

Last year's Macworld speech was a tough act to follow, Jobs said. "An iPhone only comes around once in a career, if you're lucky. I've been really lucky with iPhone, iPod and the Mac."

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