Among the many announcements made by Apple CEO Steve Jobs, perhaps the least surprising was its immediate launch of a new movie store. How does this announcement affect the nascent movie download industry as a whole? Apple shook up the music download business, scored big with television (Lost anyone?), and naturally sees digital flicks to be its next medium to conquer.

 

Competitors like Amazon, CinemaNow, and Guba offer movie download services. LAPTOP spoke with the head of Guba to get his take on the state of the movie download service as well as Ross Rubin, Director of Industry Analysis for the NPD Group, a market research and analysis firm. (Full disclosure: Ross also writes our Portable Pundit Column.)

 

 “We worried about Apple because, historically, they’ve done well with media. However, with video, it’s a different space.” said Thomas McInerney CEO and founder of Guba, an online entertainment destination which lets users browse, download, share, and buy user-generated content as well as hundreds of Hollywood movies and TV shows.  “Our affiliate program, which pays users 25-cents for each person that they sign-up, gives us an advantage as well as our aggressive price points.”

 

Aggressive indeed. Guba has some of the best online video store prices around. A Guba user will pay $4.99-$9.99 to purchase a film while an iTunes user has to pony-up $9.99-$12.99 per flick. As expected, Steve Jobs used his famed mojo as the ex-chairman of Pixar and the largest single shareholder in Disney to land the studios that reside under the Disney umbrella: Disney, Pixar, Miramax, and Touchstone. Guba, on the other hand, is heavily backed by Warner Bros. and Columbia Pictures. Both movie download services offer a far more limited major studio library than Amazon’s just-recently launched Unbox service, which charges $7.99-$14.99 per movie. They have such studios as 20th Century Fox, Lionsgate, Paramount, Sony, Universal, and Warner Bros. (See the full Amazon Unbox  listing.)

 

“Although the iTunes movie store currently has Disney-related material, I expect to see more studios onboard before the year’s end,” said Rubin. When asked how the store would compete against CinemaNow, the first online movie service that allows customers to download and burn films to DVD for playback in any DVD player, Rubin speculated that iTunes brand recognition and “confusing Playsforsure DRM scheme” adopted by both CinemaNow and Amazon Unbox may be the double-whammy for those competitors.  

 

Rubin also commented on Apple’s other announcements, namely the refresh of the nano, Shuffle, and video iPod lines. The tiny new Shuffle (1GB) is priced at $79. SanDisk, which has been making waves in the music player market, recently announced its 1 GB flash player, the Sansa c200, for $79.99. The 2GB and 4GB nanos now cost $50 and $20 more than comparable Sansa players, respectively. Should Apple be worried?

 

“Sansa has been doing well in the flash area.” says Rubin. “The c200 line is strong and SanDisk is moving into a wider audience, demonstrating itself to be quality competition. However, Apple’s movie store and large capacity 80GB hard drive players will separate it from the SanDisk’s flash players enough to find a different audience.” 

 

Rubin also stated that the re-introduction of colored players is key to expanding the nano line as variety is what drove the popularity of the now-defunct iPod mini which preceded it.

 

It’s clear that Apple’s announcement, while a surprise to no one, is going to make major waves in the digital media industry.

 

 

See what consumers have to say:  We took to the streets to get people's candid reactions on Apple's announcements.