The code in question references app rental periods, after which apps would automatically be removed from your device and/or computer. Apple uses the same system for rental movies on iTunes. Renting mobile software is an admittedly unusual concept, but there are certainly instances when time-limited access to content makes more sense than buying the whole hog.

Take, for instance, turn-by-turn navigation apps. For the occasional road-tripper who only sets out by car once a year, or who’s travelling in a foreign country for a one-time trip, renting a navigation app makes much more sense than forking over $50 for the full app on a permanent basis. Likewise with travel guide apps and apps that you may need as study aids in preparation for a big test.

Another possibility is that Apple would make the rental system available to developers as an option for trial software. That way, users could test app as a free rental prior to making a purchasing decision. In truth, this might not work out in either Apple’s or developers’ favor, however, since it could limit the amount of impulse buys made by App Store shoppers. If this feature does make its way to consumers, I expect we’ll see it carefully and judiciously applied, and not incorporated automatically across the board.

If app rentals are on the way, they could make an appearance at the iPhone media event Tuesday alongside other iOS 5 announcements. Apple hasn’t made mention of the feature in its preview of its next mobile OS, but we often see a few previously unannounced software features accompany new hardware reveals. Tune in with us tomorrow live for a live blog from the event starting at 10 a.m. PDT to see whether or not it gets a mention.

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According to Zucker, speaking at a Goldman Sachs Investor conference (via AppleInsider), giving in to Apple’s request would be bad for NBC’s brand. “We do not think 99 cents is the right price point for our content,” he said. “We thought it would devalue our content.” More than giving it away for free while shilling for Bud Light and Pepsi? Really?

Still, it’s hard to fault NBC for playing coy initially. Though ABC and Fox have signed on with Apple’s plan, as mentioned, Fox has done so only temporarily. It told investors at the conference on Wednesday that the 99-cent price point was only a “short-term test” designed to gauge feasibility in the longer term.

This isn’t Apple’s first rodeo, though. NBC has played a similar tune in the past, when it pulled all of its content from the iTunes store in 2007 with little warning. It was attempting to use its position as a top mover of content in the iTunes marketplace to bully Apple into doubling the price of its individual episodes.

NBC eventually caved, signing back on to sell episodes at the regular price of $1.99 for SD and $2.99 for HD. Apple TV’s sales success will have a major impact in determining whether history repeats itself or not in this case. I’m betting it will.

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Seasonal DVDs on Amazon

Most television seasons start in either August or September and run through April or May, resulting in a season of around 20 episodes. The average price of the top ten seasons on DVD from Amazon is currently around $30. This would put the price of an average episode somewhere in the $1.50 range. That’s the most likely price point the entertainment industry is clinging to when justifying alternate cost models for renting digital media through online delivery solutions like iTunes or Amazon’s video-on-demand.

One downside of buying seasons is that episodes aren’t available for sale until a season is over. However, in the end, the consumer owns the episodes they buy.

Broadcast and Syndicated Television

Cable and satellite television starts at about $50 per month for at least 200 channels, which provides access to most new and syndicated television shows. This would exclude exclusive access to episodes from channels like HBO and Showtime, which would add to the $50 monthly access charge. It would also exclude any television series not currently being broadcast. What it does include is early access to the latest episodes as soon as they become available.

All distribution costs are included in the monthly fee, and revenues are further subsidized via advertisements. What’s hard to calculate is exactly how many episodes customers would reasonably be entitled to. There are likely multiple consumers per household and multiple TVs for simultaneous viewing.

Monthly DVD Rental Service

Rental services like Netflix and Blockbuster can grant access to about the same list of shows for about $25 per month, depending on how many DVDs you subscription level allows you to have out at a time. The number of shows one has access to at any given time is more limited than using cable or satellite. Shipping charges are included. You can also stream to your game console with Netflix for $8.99 per month, although that does incur some of the hidden costs of distribution, which I discuss next.

Hidden Costs of Distribution

In all of the above scenarios, the cost of distribution is absorbed into the price structure. Any online distribution system would likely be paid for by the consumer in the form of broadband Internet access. Broadband high-speed internet access alone is similar in cost to each of the aforementioned pricing options, not to mention storage. Hard drives, DVDs or the extremely expensive burnable Blu-ray discs. Not only do consumers have to pay for the means of distribution, but also some means of storage, though HD space is getting cheaper by the day and the price of external drives amortized over a year works out to virtually nothing.

Viewing Behavior Patterns

Now that we know the various tolerances for paying, and the hidden costs of online distribution, what about viewing preferences? For prime timers that have replaced thier VCRs with DVRs, following a television series is more like subscribing to a video podcast than purchasing a season of episodes on DVD. How much consumers are willing to pay for a season’s worth of episodes depends greatly on how many episodes each consumer can consume in a given month.

From $30 to own a full season outright, to somewhere between $25 – $50 per month to watch and discard as many episodes you can bear to watch. How does $.99 to rent a single episode measure up? At just one episode per day you are already at the similar costs of the alternatives, and that does not include the hidden costs of distribution and storage. So is it then worth it to rent a-la-carte from Apple in convenient individual packages, or is it still much better to just pay for the water hook-up represented by cable and Netflix and drink from the tap whenever you like?

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For those who aren’t familiar with Zipcar, it’s a car-sharing service that allows members to rent a car during the day for running errands, etc. Cars can be picked up from convenient parking lots located throughout the urban areas served by Zipcar and dropped off again in another designated area. Zipcar members pay a monthly subscription fee and hourly and daily rates for use of the car.

The Zipcar app was one of those touted as taking advantage of new iPhone OS 3.0 features to deliver innovative functionality for users of Apple’s wonder device. And it seems to work just as advertised. The app uses your location as a starting point to find nearby cars available for booking. You can filter your results by time, type and model, which will highlight pins on the map in green that fit your criteria.

All of Zipcar’s automobiles are named, and once you find one that fits your needs and schedule, you can book it directly from the app, so long as you are a Zipcar subscriber. If you’re not, you can still try out the free app, you just won’t be able to book any cars. Clicking on a car at any location provides you with further information, including the hourly and daily rate for the vehicle in question, and supplementary information, including things like cargo capacity and any special features.

The iPhone app also includes a virtual wireless entry key fob that connects with a car once you’ve booked it. If you’re not a member and you’re just playing around with the app like I was, you also won’t be able to use the remote car unlocker/horn honker, although you can use it to make noise on your device itself. If you are a member, the inclusion of this feature means you won’t need anything besides your iPhone to get on the road.

Even though I don’t have a membership myself, I can tell this app is an impressive example of using the iPhone to help make people’s lives easier. It further simplifies a process which is meant to be simple to begin with, and I only hope other companies are watching and follow suit.

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If you’re like me, you have one of many choices to view your television shows. TiVo, your own DVR, Netflix, Hulu, cable — whatever makes you happy. But for the last 6 months, I’ve been trying to budget both my time and money. In doing so, I’ve cut cable completely.

Between regular channels (with no DVR) and Hulu, I’ve been able to keep current with most of my favorite shows. However there is only so much I can keep up with on Hulu, and so much eye strain I can take from a 13-inch screen.

I propose, and with the community’s support, that rentals should be extended to television shows within iTunes. I’d love nothing more then the opportunity to rent a series, or subscribe to it for less than half the current price to own a TV series from the iTunes store.

This would allow viewers to watch within 24 hours of a current show, instead of waiting for up to two weeks with other free, online services. It would also allow viewers the comfort of watching premium content and shows completely commercial-free, where and when they please. If a current standard definition video sells for $2.99, would it not be possible to rent a single episode for 50 cents? This would roughly make a season of 12 episodes about $6, or $11 for a 22-episode series. Depending on how many seasons or shows you watch in a year, this could be really cost-effective.

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Apple today released an update for iTunes, bringing the version number to 8.1.1.

The new version (currently available from Software Update) supposedly fixes syncing issues with the iPhone and iPod touch (which I’ve been lucky enough not to encounter) and with VoiceOver, the we-don’t-need-no-stinkin’-display substitute for the iPod Shuffle.

It’s also supposed to bring HD movie rental support to the media management software, though a cursory investigation by yours truly does not reveal any movies that are currently available for rent in said format, in either the Canadian or the U.S. iTunes stores. Maybe the standard $3.99 rental price now includes an HD resolution copy when available? I’m too scared to try it out, so let us know if you’re a braver soul than I.

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In what seems like another addition to a long list of examples of how when you rent digital content, you’re actually renting it with a strict set of conditions, Apple owners are running into trouble with High Definition Content Protection (HDCP). The problem, affecting owners of the new aluminum MacBooks and MacBook Pro, occurs when you try to play some iTunes-rented movies on an external display attached to your notebook.

The HDCP causing the problem is intended to prevent copying high-def content across an HDMI connection. It’s also included in DisplayPort tech, which is the new standard for video output on current generation Mac portable computers. According to Ars Technica, the problem seems to affect movies protected by Apple’s FairPlay Version 3 DRM, although not all files which have Version 3 protection are affected. Whether or not the movie plays appears to be somewhat random, at least in Ars’ limited sample pool.

The person who pointed out the problem to Ars was just trying to play Hellboy 2 for a class of high school students using an external projector. Another case reported in an Apple support discussion thread occurred when a MacBook owner tried to playback content to his external 19-inch monitor. This report was quickly joined by many, many others. In all cases, playback works fine on the computer’s built-in display.

Is there a fix?

Is this another issue to be resolved quickly and with relatively little stir, like the trackpad hard-click recognition problem? Likely not, since a fix in this case might open up rental HD content to potential piracy. A software solution would take more time and attention to preserve HDCP integrity while allowing proper use for those who rented content and have no intentions of copying the content.

That’s not to say that Apple can let this one pass. One of the great incentives to even rent movies through iTunes is the ability to play it back on your HDTV or projector. If new MacBook owners (who represent a very sizeable group) feel like they’re playing Russian roulette when they rent content from iTunes, they’d simply stop doing it. And those caught unaware will go back to Apple for some kind of compensation and possibly swear off the service for good. Some angry MacBook owners are already seeing this as a ploy to get people to buy AppleTVs. This is probably not the case, but even the impression that it might be is damaging.

In a time when many are turning to their computers as home theater supplements and substitutes, Apple would do well to nip this in the bud right away. Since some movies do and some don’t encounter the HDCP problem, it may be a studio issue and out of their hands. If it is, they’ll have to lobby the studios, paint a picture of lost revenue, and hope to pressure a switch in the encoding of affected movies.

What do you say? Does this HDCP mess have you looking to jump the iTunes ship, or do you trust in an Apple fix?

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I have spent about $300. That is about as much as an original Apple TV (and does not include the rented movies). If I did the same for the next two years (assuming Apple does not create a subscription model), my cost would be at least $800. But this article isn’t about the cost of an Apple TV. Nor is it about the added benefits of DVDs over digital downloads that Bob talked about a couple weeks ago (and take the time to watch the alternate ending of “I Am Legend” if you haven’t, it is amazing).

It seems that Blockbuster is trying to compete with the Apple TV by creating their own set top box. Netflix announced in January that they are working with LG to make an Apple TV competitor also.

I think it is great that Blockbuster and Netflix stepped up to the plate (allbeit a little late) to offer some competition to the Apple TV. The competition will force Apple to continue innovating and creating a better product. I sincerely hope that if Blockbuster is in fact making a digital download box, they are going to offer a subscription model similar to their Blockbuster Online service.

The problem with competition, though, is that there will be at least four set top boxes that you can download movies to: Apple TV, Vudu, Blockbuster, and Netflix. That is all well and good if they each have support from all the major studios. Frustration arises when consumers want to watch a Universal movie, and Universal decides they want to support Blockbuster and Vudu, but I only have an Apple TV. I do not want to have to buy four different boxes to be able to watch movies. If the movie studios don’t play favorites, all that competition will benefit consumers. If they do play favorites, it is going to get real old real fast.

Don’t get me wrong, I don’t mind a few exclusives here and there that differentiate the product, and I probably won’t hear about those unless I have the exclusive player. For example, I see a lot of “Blockbuster Exclusive” movies, but I don’t miss those that are “Netflix Exclusive” movies (if there are any). Now, if I don’t miss those exclusives, will I miss the movie studios? Well, if Nickelodeon’s movie studio doesn’t support my player, I think I might live, but to not have access to any of one of the major studios’ movies would certainly be annoying.

Is there room for multiple players in this market, or must we all bow down to the Blu standard? There has to room for multiple players because digital media distribution is a different animal than high definition DVDs. Compatibility (or availability) of alternate methods of viewing the content (computer, iPod, or whatever else may be available on the horizon, wink, wink streaming iPhone media content) is not something we expect from DVDs, unless we know of a killer app that makes watching movies on those devices very easy. We do expect digital media to be able to transfer to another device. Even our DRM music and videos can at least go between the computer, Apple TV, and our iPods. We don’t expect to be able to put our DVDs in our iPods, and therefore, we want one standard so that we don’t have to buy a bunch of different players.

Apple TV does have a corner on the personal media player, set top box, and computer triangle. This simple fact could exclude Vudu, Netflix, and Blockbuster from the runnings. Those three companies would have a hard time edging themselves into the computer market (say nothing of the PMP market).

Help me out here: am I missing anything? What else do consumers need to make digital downloads from multiple carriers worthwhile?

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