Apple Lacks International TV Rentals, Packs A Price Premium

Steve Jobs announced a strategic reboot for Apple (NSDQ: AAPL) TV that includes a TV show rentals feature and a £99 local UK pricepoint – but there is no UK TV content on the box, and it still comes at a hefty premium compared with the American sticker price.

The box is moving from a download-to-own to a rental streaming model, with ABC (NYSE: DIS), ABC Family, Fox, Disney Channel and BBC America shows available in the U.S. for $0.99.

But, though a parallel movie rentals feature is available in the U.S., Australia, Canada, France, Germany, Ireland, New Zealand and the UK, Apple’s UK announcement states: “99 cent HD TV rentals only available in the US.” There’s also no Netflix (NSDQ: NFLX) either, of course – the movie renter operates only in North America.

It all means Apple has again failed to secure either significant TV repertoire or a movie rentals partner outside the U.S. And that means the lead promotion on Apple’s UK homepage today is a new iPod touch, while the TV rentals take the homepage slot in America.

Perhaps Apple is launching the product here as a prelude to striking deals – an unusually iterative approach. Having eschewed the rumored tactic of renaming the box “iTV”, which would have put it on a trademark collision course with commercial broadcaster ITV (LSE: ITV), ITV may even be the likeliest deal Apple could find, given its recent expressions of interest in charging micropayments for its shows.

But the BBC would likely refuse to give its shows to Apple TV in anything other than a special iPlayer section.

Regardless, Apple TV looks like making fewer in-roads in to UK TV VOD than across the pond…

Two operators (Sky and Virgin Media) already dominate the pay-TV space. And If the free-to-air broadcasters’ industry-standard Project Canvas connected-TV JV can get going, the brief market for third-party set-top boxes like Apple TV, Boxee and Roku will diminish significantly, as standardised Canvas receivers get added to new boxes and, later, integrated in to TVs themselves.


Across the Atlantic, the new Apple TV box’s $99 price is the equivalent of £64 but, in the UK, Apple is now being tellingly transparent about the price premium, which is common to all its gadgets. Its announcement makes clear the £99 price “includes approximately £23 VAT, duty, and levies”.

And that’s a theme common to all the localisations of Apple’s Wednesday product announcements…

iPod Shuffle 2Gb: $49 (£31.67) or £39 (“includes approximately £6 VAT, duty, and levies”).

iPod nano 8Gb: $149 (£96.31) or £129 (“includes approximately £25 VAT, duty, and levies”).

iPod nano 16Gb: $179 (£115.70) or £159 (“includes approximately £30 VAT, duty, and levies”).

iPod touch 8Gb: $229 (£148) or £189 (“includes approximately £30 VAT, duty, and levies”).

iPod touch 32Gb: $299 (£193) or £249 (“includes approximately £39 VAT, duty, and levies”).

iPod touch 64Gb: $399 (£258) or £329 (“includes approximately £52 VAT, duty, and levies”).

Apple’s effectively saying: “Our hands are tied.”