Apple Pushes Forward With Streaming Video Plans

The latest evidence that Apple (s AAPL) will soon begin streaming video comes from CNET, which reports that the consumer electronics manufacturer is putting its resources behind a cloud-based video service. The report comes as Apple has transitioned many on the team from online music service Lala to work on streaming video instead.

Apple acquired Lala in December of last year, but shut down the streaming music service shortly thereafter. Now it seems Lala’s technology and personnel are being used to build a cloud-based video service, which could replace Apple’s current system for downloading movies and TV shows.

The rollout of Apple’s streaming video service could coincide with the introduction of the next version of Apple TV, which is expected to be sold for around $99. The device will reportedly run the iOS operating system, which is also used on iPhone and iPad devices, and have Flash memory installed rather than a dedicated hard drive.

According to NewTeeVee sources, Apple will also introduce streaming TV show rentals for 99 cents, half the price of its current download-to-own option. CNET reports that the new video service would also allow users to purchase movies once and store them on Apple servers, allowing them to access that content whenever they wanted.

The Apple initiative is similar to plans from the Digital Entertainment Content Ecosystem (DECE), an industry consortium that has announced a cross-platform digital rights management framework allowing consumers to buy a piece of content once and watch it on a number of supported devices. A cloud video service from Apple would presumably enable its users to stream movies and TV shows to their PCs, iPhones, iPads and the new Apple TV set-top box.

Moving to streaming is an important step for Apple, as its iOS-based devices are constrained by a limited amount of Flash-based memory for storing files. A typical hour-long, standard-definition TV download from iTunes is about 600 MB to 800 MB, and about twice that size in HD. That limits the amount of content that users are able to download and store on their Apple devices. A cloud-based, streaming service would give users access to their content only when they wanted it, alleviating the need for local storage.

Related content on GigaOM Pro: Apple’s Path to the Living Room (subscription required)