Apple Goes To The Movies

Apple Computer launched its long-awaited online movie service Tuesday with minimal participation from Hollywood and showed off a device that will make it easier for consumers to watch the videos on television.

This is Apple's attempt to bring together the computer, the iPod and the TV, CBS News correspondent John Blackstone reports.

The iTunes Music Store will only carry movies from The Walt Disney Co. studios, where Apple CEO Steve Jobs is a board member. The question becomes how quickly other movie studios will get on board, CBS News technology analyst Larry Magid said.

"In the area of movie downloads, Apple does have competition. There are other download services, such as Amazon.com and Cinemanow has been around a couple years already," Magid said.

By contrast, Amazon's movie service launched last week with distribution deals with seven studios — but not Disney.

At a media event Tuesday, Jobs also showed off a compact gadget, dubbed iTV, that will allow consumers to watch movies purchased online — as well as other digital content stored on a computer — on a connected television set.

Blackstone reports that iTV, which will sell for $299, won't be available until early next year. Because iTV isn't available yet, it serves as an assurance that iTunes movie customers will be able to view their purchases on a screen larger than that of an iPod or their computer, according to Magid.

"I think what Apple is trying to say is, 'Look, we are not locking your content into a computer or an iPod.' Apple is signalling its intention to be part of your living room ... to link your computer to your tv set, as well as your iPod," he told CBSNews.com.

It will also have the capability of loading the user's mp3s onto their television sound system, Blackstone reports.

Jobs said more than 75 films will be available 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.

Robert A. Iger, President and Chief Executive Officer of Walt Disney, said 75 movies will be available immediately, and that the success of downloaded TV shows indicates that the download sale of movies will be just as big.

The invitations to the media event, sent last week, had declared simply "It's Showtime," and triggered an avalanche of speculation that Apple would soon shake up the distribution of movies as much as it did music with its iTunes store and iPod players.

Jobs' first announcement of the day ticked off the new products Apple will offer. The new fifth-generation iPod has a lower price — $349 for 80 gigabytes of space.

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[tomflint69]

People who are in IT industry can understand that running IT businesses is a big risk. I hope Apple will stepwse shift its computer business in to other business domains. Good decision.

[CBSTV]

A correction to this report:

The new iPod Shuffle has 1 gigabyte (not 2) of storage, and has a retail price of $79 (not $149). Perhaps the reporter was thinking of the updated iPod Nano when they wrote this.

[CBSTV]

It's amazing how Apple Computer's product announcements generate so much buzz.

The iTV device looks promising. It ought to provide seamless integration of digital media on the home computer with the living room TV.