Update on Apple’s Entry Into Online Movies

As was widely expected, Chief Executive Steve Jobs announced Apple’s entry into the online movie rental business today.  What was a surprise, however, was that he managed to form alliances with all six major movie studios, including rival Sony Pictures and Universal, which stopped showing NBC Universal TV shows on Apple’s iTunes Store last fall.

Millions of people already use iTunes to download music or TV shows to their iPods, so online movie rental was an inevitable next step.  Films will be available through their iTunes store 30 days after release to DVD.  Initial prices are set at $2.99 for older movies and $3.99 for newer releases.  There’s also an option for a high-definition version for $1 more.  These movies will work on Macs, Windows-based machines, iPhones, iPods or Apple TV set-top boxes.

As an extension to the movie rental news, Apple also announced improvements and price reductions to it’s TV set-top boxes.  Now, $229, down from $299, these new boxes now allow you to rent or purchase content directly on a TV through the set-top box.

While Jobs did admit that there is competition from other online renters such as Netflix, Amazon and Blockbuster, he noted , “We’ve all tried to get movies over the Internet and to the TV, and we’ve all missed.”  Jobs is hoping “Round #2″ will go to Apple.