Macworld Is Jobs’ World

Taking the stage dressed in his trademark blue jeans and black mock turtleneck pullover, Apple CEO Steve Jobs didn’t rock Macworld with just one gadget, like last year’s iPhone, but with several products.

The big rumor leading up to Jobs’ Macworld appearance was all about iTunes going to the movies. Or, more specifically, movies coming from iTunes to your desktop. And this time the rumor was true.

iTunes Movie Rentals works with Apple TV and pretty much functions as the name implies.

Customers can start watching a movie as soon as it starts downloading, otherwise they have 30 days to view the film. Once a viewing starts, customers have 24 hours to watch the movie before the file expires. Prices start at $2.99 for library titles, $3.99 for new releases and a $1 bump in price for high-definition versions.

Unlike other online movie rental services that restrict viewing to the computers used for downloading, films rented from iTunes Movie Rentals can be watched on TV. But there is a catch. You’ll need Apple TV to do so.

Introduced in fall 2006, Apple TV is a digital media receiver that connects to the television and can be used for playing music, displaying pictures, watching TV shows, or just about any other media content you can store on a computer. While you still need a computer connected to the Internet to fully enjoy Apple TV, you control the unit via a handheld remote control, much like operating a DVD or DVR remote control.

Apple promises that it will have more than 1,000 titles available on iTunes Movie Rentals before the end of February. Apple TV costs $229.

Do people want to rent movies from iTunes? That’s for consumers to decide, but investors apparently think so.

Shares of Blockbuster dropped nearly 17 percent to end up at $2.69 per share the same day Jobs announced iTunes Movie Rentals. Netflix also saw its stock drop 3.2 percent to end at $22.05.

But tech stocks were also on the down slide on the same day Jobs announced Apple had entered the movie rental biz, and Apple shares fell 5.5 percent to close at $169.04.

Along with iTunes Movie Rentals, Jobs announced another movie product: Digital Copy for iTunes. This product allows movie fans to transfer DVD films to computers, and then transfer the file to personal players or Apple TV units.

Here’s how it works. After inserting a DVD in a computer’s DVD tray, iTunes then prompts the user for a code number that comes with the DVD. Punch in the number and then the iTunes software transfers the movie to the computer.

However, unlike music CDs, Digital Copy for iTunes allows a DVD to be copied to only one iTunes-enabled computer. This, along with having to enter the DVD-supplied code, is meant to prevent unauthorized copying and distribution.

So far, only Twentieth Century Fox is participating with Digital Copy for iTunes.

Digital Copy’s success will depend on whether the other major film studios are willing to trust Apple with their digitized celluloid wares.

Movies weren’t the only news coming from the mouth of Jobs. A free iPhone software upgrade offers several programming tweaks, such as revamping the mapping software to give users instant location information. A software upgrade for the iPod Touch lets the player do everything an iPhone can except make or receive phone calls. The company also upgraded its Time Capsule software used for automating computer backups.

But perhaps the exciting announcement at Macworld wasn’t about iPhones, movies or iPods. Instead, it was the debut of the world’s thinnest notebook computer.

The MacBook Air is only .16 inches at its thinnest point, has a maximum height of 0.76 inches, comes with a 13.3-inch monitor and weighs in at 3 pounds. Go ahead. Take a look at your own laptop and then try to convince yourself you don’t want one of these lean, mean computing machines. Prices start at $1,799.

"We’ve built the world’s thinnest notebook – without sacrificing a full-size keyboard or a full-size 13-inch display," Jobs said. "When you first see MacBook Air, it’s hard to believe it’s a high-performance notebook with a full-size keyboard and display. But it is."

Pepsi’s Amazon Adventure

Only a few months old but with plenty of e-commerce savvy under its belt, Amazon MP3 has teamed with Pepsi to serve up one billion free downloads.

The promotion starts February 1st, when consumers purchasing specially marked Pepsi products can collect points redeemable for music at Amazon MP3. Pepsi will send 4 billion marked packages to market, and each song in the contest can be had for accumulating five points. Contestants "bank" their points on PepsiStuff.com and then trade them in for tunes at Amazon MP3.

Although the promotion starts three days before Super Bowl XLII, Pepsi and Amazon plan on making a big splash during the big game by airing a commercial starring Justin Timberlake. If all this sounds like déjà vu all over again, it was only four years ago when Apple aligned itself with the soft drink manufacturer and launched a Super Bowl ad promoting a 100 million-song download promotion.

But now Amazon MP3 and its non-DRM policy is the latest name in the music download race, although iTunes still commands more than 80 percent of the market. Even though the major labels praised Steve Jobs when Apple launched the iTunes Music Store in 1993, the labels slowly discovered that they had gone into business with, well, Steve Jobs, and quickly took a disliking to Jobs’ habit of having things his way.

Like pricing and DRM. It was only a year ago when Jobs posted an essay on Apple.com decrying the use of digital rights management technology. It was only a few weeks later when EMI announced it would sell non-protected tracks on iTunes.

And EMI is still the only major label to sell unprotected songs on iTunes even though all four majors, including EMI, permit Amazon MP3 to sell DRM-less MP3 tracks. That the majors granted Amazon to sell unprotected music while insisting that Apple keep using its proprietary DRM for iTunes selections is probably one of the bigger signs that the recording industry wants Amazon MP3 to succeed, if only because Amazon might be the only online service capable of giving iTunes a run for its download money.

"We are excited to team up with Pepsi and reward millions of Pepsi Stuff participants with high-quality DRM-free music downloads from major and independent labels," said Bill Carr, Amazon VP for digital music and movies.

Sony BMG Goes DRM Free

Going from clueless to cool within a week’s time, Sony BMG is joining the non-digital rights management crowd on Amazon MP3, thus completing the major label presence on the music download site that has no use for DRM.

Only a few days before Sony BMG announced it was dropping DRM the label drew criticism for its MusicPass.com promotion where customers actually have to visit brick-and-mortar stores to purchase plastic cards redeemable for unprotected tracks online. By making customers jump through so many hoops to legitimately download music, it seemed as if the execs at Sony BMG were living in another universe. One where P2P doesn’t exist and people never, ever consider sharing their favorite songs.

"We are excited to be working with Amazon as they continue to build new markets for digital music," said Thomas Hesse, Sony BMG President of Global Digital Business and U.S. Sales. "We are constantly exploring new ways of making our music available to consumers in the physical space, over the Internet and through mobile phones, and this initiative is the newest element of our ongoing campaign to bring our music to fans whenever they happen to be."