Wed May 09, 2007 1:12 pm

This is a remarkably good ratio. All together, people saw 183 million shows for free, and bought 23.7 million for two bucks. This means, for every six to seven freeloaders, there is one paying customer. Now, keep in mind, these are actually buying these shows forever, not renting them for a few days.

If Jobs one day decides that short-term rental model is good, the numbers for movies and TV shows would almost certainly shoot through the roof. I don't want to own Desperate Housewives in 640x230. All I want is to occasionally see an episode I missed (hypothetical case; I don't watch TV). If I could rent it for a week and pay $0.5 (or even $1), I'd rather do that, watch the episode and delete it when it expires (or when I'm done with it). Same with movies; instead of buying it for $15, I'd gladly pay $3-4 to rent it for a week.

The sales numbers from Disney are extremely promising. It's time for iTunes Store to get into the video rental business.

Wed May 09, 2007 3:54 pm

I don't think there is a major danger of that happening. Jobs has serious leverage with the near-monopoly of iTunes Store to exert as much pressure as necessary to get music labels to agree to his terms.

In addition, rentals are not the same as subscription. Jobs will fight subscription service as long as it is clear that consumers don't want it. It is obvious that subscription is bean counters' wet dream of a steady revenue stream. As for rentals, music labels haven't exactly stated their position on that. For music, though, it would make even less sense than subscription; DRM would have to prevent CD burning, so that people wouldn't just rent thousands of songs in order to move them over to CDs. Also, rental rates would have to be significantly below $0.99 for it to be attractive. To me, it looks like a non-starter from every angle (consumers', labels', or Apple's).

I still have a feeling something will soon change in the iTS landscape. Let's watch closely...