Apple’s new iTunes Movie Rental service allows you rent movies in standard definition (640-by-480 almost DVD quality) and watch them on your Mac or Windows PC, as well on the iPod Classic, 3G iPod nano, iPod touch or iPhone. You must have the latest software installed on your iPod or iPhone. When you rent a movie you have 30 days to start watching. Once you start watching the movie you can watch for up to 24 hours as many times as you like. Once the 24 hour period is up the movie file will disappear from your hard drive. Prices for library titles (older movies) are $2.99 with newer titles costing $3.99.

HD Movie rentals (720P) will be available in February on the Apple TV only. Apple has announced the Apple TV will receive a major software update in the next week or so to allow rentals while cutting the price of the unit to $229. Once the Apple TV software is updated you will be able to rent movies in standard definition or HD directly from your Apple TV without the need of a computer. Most of the HD movies for rent will include 5.1 Dolby surround sound and will cost $3.99 for library titles and $4.99 for newer titles, just a dollar more than the standard definition versions. As of this writing no rented movies can be played on the Apple TV until it receives the expected software update.

As I said earlier only the current iPods can play rented movies. This leaves out the 5G and 5.5G iPod video. This is most probably due to the copy protection scheme (DRM) Apple has come up with for rented content. Apparently the older iPods lack the needed technology to play back this copy protected content.

When renting movies that you want to watch on your computer, iPod or iPhone you select it in the iTunes Store Movie section and pick “RENT MOVIE” on your computer using iTunes. You do not have to wait until the entire file is downloaded to start watching it. It will play within 30 seconds to a minute or two on most modern broadband connections. When the download begins you will see a new category on the left side of iTunes called “Rented Movies” appear.

Apple allows you to “move” your rental to your iPod or iPhone. You can watch part of it on the computer move it to your iPod or iPhone and pick it up where you left off, if you like. In order to move the movie to your portable device you must connect your iPod or iPhone to iTunes (sync). Select your device on the left, go to the Movie tab where you will see a new section that allows you to move the rental to your device. Click the “Move” button next to the movie and then click the “Apply” button at the bottom. You can only move it to one device at a time.

You must be connected to the Internet to transfer a rented movie. Once “moved” to your iPod it is no longer available in iTunes as it is “moved” not copied. Moving the rental usually only takes a few minutes. Once the file is finished syncing to your iPod or iPhone you can eject your device and watch the movie. You will find it in the new Rental menu under Video.

You can move it back to iTunes and another iPod or iPhone if you like within the time frame of the rental. Just move the Movie Rental back to iTunes and then move it to another compatible device.

Analog Hole
The current iPods and iPhone have the ability to play video on a TV as long as you have an Apple-authorized, authentication chip-equipped accessory or cable. Many older third-party add-ons will not allow video out on the newer iPods or iPhone as they lack this chip. Apple sells new $49 cables to allow for video out. They make composite and component versions. Also Apple Universal Docks allow for video out using S-Video out. I have both the Apple Composite AV Cable and an older Apple Universal Dock that has S-VHS out. Now this leads me to the “analog hole” discussion.

For years copy protection schemes (DRM) have suffered from what is known as the “analog hole” as a way to copy video and audio. The Apple DRM used on the new iTunes Movie Rentals is no different. After renting a movie from iTunes Store I “moved” it to an iPod Classic and was able to play out video and audio from my iPod to my Sony flat screen HDTV without any issues using both the Apple Composite AV Cable and an older Apple Universal Dock.

I tested this playback from my iPod using the Apple Universal Dock with S-Video and RCA audio directly into a Panasonic DVD-R deck and successfully recorded the movie. It made a acceptable recording from the standard definition movie. One problem was I realized was the movie I tested was a little over 2 hours long and my DVD-R stopped at its two hour setting a bit short. I could have chosen a longer record time but quality would have surely suffered a bit.

Next, I decided to test recording my iPod from the Apple Universal Dock with S-Video and RCA audio directly into my Elgato EyeTV 200 (older model) that is connected to my Mac mini. I set the EyeTV software to record at the high quality DVD setting. The EyeTV can export recordings to H.264 video that is Apple TV, iPod or iPhone compatible. This achieved a very decent watchable recording.

Of course recording these standard definition movies is time consuming (must be recorded in real time) and a pain, not to mention taking up lots of hard drive space and that’s the point. Apple has priced the rentals to match most video rental stores and even though DVDs are easily ripped, most people either don’t know how or don’t bother. The only real way to curb piracy is to compete with it.

HD video does not usually suffer from the “analog hole” problem. As the only real way to display HD video is via HDMI which has copy protection built-in or component (RGB). There are really no readily available component recorders that can record this HD signal. Set top boxes that support HD video and sport composite or S-Video outputs can only output standard definition video from these ports. The Apple TV has only HDMI and component video outputs.

Apple has put together a great alternative to driving to the video store or waiting for discs to come in the mail. By signing up every major Hollywood studio I suspect the selection will be pretty decent in time. Apple is promising Movie Rentals after only 30 days of DVD release for most flicks. The pricing is compelling and it is hard to beat renting HD quality movies with surround sound from your couch when the Apple TV joins the rental party in a few weeks. These HD movies will be 720P and are less than Blu-ray’s 1080P resolution, but will be quite great looking anyway.

I agree with Steve Jobs when he says “people want to own their music and rent movies.” Apple is betting big on this reasoning. Sony’s Blu-ray may win in the format war against HD-DVD, without the help of Apple as they have yet to support Blu-ray by making it available in any Mac. But services like Apple’s iTunes Movie Rentals may actually slow the sale of these still pretty expensive high definition disc players. The only way to combat HD downloads is to see $99 Blu-ray players and plenty of rental movies available for them. As most households with home theatre probably have broadband, Sony may find themselves behind Apple repeating what had to be an iPod nightmare for them all over again.

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