Report: Apple pursuing studio agreements for early movie rentals

Apple is attempting to negotiate with Hollywood studios to offer access to movie rentals — possibly as early as two weeks after they open in theaters — according to a new report by Bloomberg. The move appears to have been initiated by several of the big studios, including 21st Century Fox, Warner Bros. and Universal Pictures, which have confirmed that they are looking for ways to offer “high-priced” video rentals of new movies shortly after they open in theaters. People familiar with the matter have said that the studios are considering a deal with iTunes as a possible option, although Apple is not necessarily the only company that the studios have been in talks with. Sources have suggested that one of the main concerns regarding whether iTunes will be a suitable choice centers on the security of the platform to avoid jeopardizing box office sales from pictures that are still in theaters. Despite Apple’s tight FairPlay DRM security on existing iTunes rentals, studio executives are concerned that users could still use a camera to record a movie playing on a TV screen; by comparison at least one competing startup named in the report has implemented watermarking technology that would in theory allow the source of a leak to be tracked to a specific end user, thereby discouraging piracy.
Studios hope that an early home rental option, albeit it at a premium price — ranges of $25 – $50 are being considered for such online rentals — would help to bolster flagging home video revenue and build new areas of growth, in addition to deterring online piracy of new releases. On the other hand, the studios face a battle with theater chains that, of course, would prefer to retain exclusivity on new releases. Both theater chains and studios are in talks to find solutions that could benefit both sides, with at least one source saying that such a service is likely to come to fruition within the next 18 months, regardless of the technology platform that is ultimately chosen for it.

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