News of the finance

Apple announced a deal with 20th Century Fox, adding Fox films to the iTunes video store. The movies will be available for download...

...as video rentals, the first time iTunes has offered rentals, showing that low-price rentals are the better deal for users than offering the same DRM-laden low-quality videos at a higher price for permanent sale.

Apple is the Xbox Live Marketplaces only real competition for digital movie distribution, and them embracing movie rentals (chatter is Fox is only the first studio, with more to come), leaves another wrinkle for Microsoft to deal with. Worse, part of the deal is that Fox DVDs will ship with iPod-formatted copies of the movie on the disk, wrapped in Apples FairPlay DRM. Those movies wont run on anything but an iPod/iPhone, due to the copy protection.

Two years ago, Microsoft could have pushed for similar treatment for its own DRM, but thanks to its abandonment of PlaysForSure and splintering of the WMV-based DRM market, it cant claim that its DRM serves the entire non-Apple player market. Apple gets a great deal, and Microsoft has no hope of getting something similar for itself.

Microsoft needs to think of some means to even itself out with Apple. One suggestion: Its time to finally bring the Xbox Live Video Marketplace to the PC. If you have to, require the movies to stream from a 360, but make the connection work.

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Tag: Apple, 20th Century Fox, Xbox

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