Most of the talk about Apple’s (AAPL) new movie rental business centers around what will happen to bit players like Netflix (NFLX) and Blockbuster (BBI).
While it is not clear that consumers will watch full-length movies on little screens like those on the iPod, they will watch them on TV. The DVD and cable business are largely built around that behavior.
The companies that have the most to lose with next-generation VOD are the cable guys. Comcast (CMCSA) told the Consumer Electronics Show audience that it was expanding its movie rental archive by several thousand films. It is increasing the speed of its broadband offerings. That will, in a twist of irony, help services like Apple’s by cutting download times.
Comcast is also creating an internet portal for TV shows and films. It plans to defend it turf. The most obvious enemy is Verizon (VZ) and is fiber-to-the home project.
But, make no mistake. Apple’s movie plans are not aimed at Netflix. There is not enough revenue there. It wants what the cable TV companies have–the VOD customer.
Douglas A. McIntyre
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