Although Steve Jobs announced in his keynote at the Macworld 2008 expo that 1,000 movies would be available for rental from the iTunes Store by the end of February, it didn't happen.
In fact, the number of movies you can rent from iTunes is well below half that number. Last week I checked the "all rentals" box on the iTunes Store and got just 287 items, although a power search with the "Search movies available for rental" box checked turned up 436 films.
Many in the blogosphere have hammered Apple for what some are calling a broken promise. Paul Thurrott, who has an ugly reputation in the Mac community for his frequent knocks on Apple, actually called the mid-January announcement a "lie," as if Jobs knew then the company wouldn't make the 1,000-movie goal.
Jobs told those gathered at the annual Apple shareholders meeting that he is "not happy" about coming up short. According to the San Jose Mercury News, Jobs "blamed the delay on the time it has taken movie studios to get the necessary approvals from various rights holders. ... "
One would think Apple had a high degree of confidence in having 1,000 movies for rent on iTunes by the end of February or Jobs would not have said it. Apple had little to gain by lying about it, though it may have sold a few extra Apple TVs. Even that would hardly have been worth it, as the Apple TV has an uncharacteristically small (for Apple, anyway) profit margin.
If Apple thought it would have 500 rentals by March 1 and 1,000 by May 1, Jobs just as easily could have said that. I think most customers realize that a major new service such as this will build inventory slowly. Remember, the music version of the iTunes Store had only 200,000 songs at launch in 2003, compared with 6 million today.
With Jobs himself on the hot seat, you can be sure Apple will resolve whatever issues are holding up the addition of more movies to the rental store.
A few years from now, when Apple dominates the online movie rental business with Apple TV and the iTunes Store, this red-faced moment will be long forgotten. (OK, I'm going out on a limb here, but I think it's a likely scenario.)
I also have to question the timing of the problems the movie studios are having. They didn't know how long it would take to get approval from the rights holders? Please.
It's not like the iTunes Store is the first entity to rent movies online. Amazon's Unbox service has been doing it for over a year and boasts 10,000 titles. NetFlix rolled out its streamed-over-the Internet service last year; "Watch Instantly" has 7,000 movies in its catalog.
Just last fall a company called Vudu Inc. began offering movie rentals over an Internet-enabled set-top box and now offers 5,000 films.
All three have deals with all, or nearly all, of the major studios. I'm wondering if the major film studios, fearing Apple's ability to replicate its success in the music download arena, purposely dragged their collective feet to embarrass Apple and slow its entry into the market.
In any case, the studios have - intentionally or not - seriously annoyed Jobs. And that, my friends, is never a good idea.