Apple prepping movie cloud service
Apple Inc. is preparing to put movies in the cloud, entering a market in which it may be both competitor and ally to a similar offering backed by most Hollywood studios. — Representatives of the iPhone and iPad maker have been meeting with studios …
Context & Ripple Effects
Apple's move is the third act of a long-running push: the company was reported as far back as March 2010 to be working on storing customers' video in the cloud, and by mid-2010 its broader cloud effort was still described as not fully baked. Its Hollywood ties go back further still, to the online film-rental deal struck with Fox in December 2007.
What is new per the Los Angeles Times reporting is positioning rather than technology: Apple representatives are said to be meeting with studios ahead of a movie cloud service that would put it in the same market as a similar offering backed by most of Hollywood — simultaneously those studios' customer and their rival. All of the key claims remain rumored at this stage.
First-order effects
- Studios negotiating with Apple now face a two-front dynamic: license content to the iTunes ecosystem or strengthen the rival studio-backed cloud offering, giving rights-holders unusual leverage over terms.
- iPhone and iPad owners stand to have purchased films accessible from any device via streaming rather than local storage, if the rumored talks produce deals.
Second-order effects
- The studio-backed alternative loses exclusivity as a digital-home answer if Apple's locker ships, pressuring its backers to differentiate on cross-platform portability versus Apple's installed base.
- Competing device makers without comparable cloud-video deals face a widening content gap on tablets and phones, where library access increasingly drives hardware choice.
Third-order effects
- If the pattern holds, film ownership migrates from downloaded files to account-tied cloud access, making platform operators like Apple the de facto gatekeepers between studios and viewers.
- The ally-and-competitor structure could become the template for every subsequent Apple-studio negotiation over digital distribution, with each side needing the other more than either admits publicly.
The trend: Home video is shifting from owned files to cloud lockers controlled by device platforms, with studios bargaining against both their distributor and their rival's partner at once.