Report: Apple to premiere cloud-based movie streaming service

Apple (NASDAQ:AAPL) is reportedly deep in negotiations with Hollywood studios to launch a new service enabling consumers to purchase feature films from its iTunes digital storefront and stream those titles from the cloud to devices including the iPhone and iPad.

Citing anonymous sources close to the discussions, The Los Angeles Times reports Apple has been meeting with studios to finalize the proposal and is expected to launch the streaming movie service either in late 2011 or early 2012. The proposed service would complement the new iTunes in the Cloud, which enables consumers to download previously purchased iTunes music to all iOS devices at no additional cost, as well as the forthcoming iTunes Match, which essentially mirrors music files downloaded from sources other than Apple's storefront with a 256 kbps AAC DRM-free version culled from the iTunes Store. An Apple spokesperson declined to comment.

The talks come as Hollywood prepares to officially launch its own Ultraviolet platform, which enables consumers who purchase a film on DVD or Blu-ray to access cloud copies they can stream to their web-connected TVs, smartphones and tablet computers. Ultraviolet digital purchases with no corresponding physical disc are expected to follow sometime next year. All major studios except Disney have pledged their support for Ultraviolet--Hollywood is also working with retailers and electronics manufacturers on the initiative, although Apple is a notable holdout.

Sources say the current talks involve giving consumers who purchase Ultraviolet titles access to that content across Apple devices via mobile applications available for download from Apple's App Store. Titles purchased from iTunes would remain exclusive to Apple's iOS and Mac platforms, however. Apple relies on its digital media and mobile software efforts to drive consumer demand for products like the iPhone and iPad.

Although Hollywood has spent several years fine-tuning Ultraviolet, insiders say studios are likely to embrace Apple's partnership plans. Online movie purchases are on pace to total only $231 million this year, roughly the same as in 2010, according to IHS Screen Digest data--iTunes generates 66 percent of those sales. "This is going to be a huge boost to a struggling online movie business," IHS digital media research director Arash Amel told The Los Angeles Times. "Apple is going to make it work right off the bat."

Apple released its new iOS 5 mobile operating system on Wednesday. The overhaul includes iCloud, which automatically syncs content on Apple servers for access across iOS devices as well as Macs and PCs. Each day, iCloud Backup saves information from the user's iOS devices over Wi-Fi, storing content including purchased music, apps and books, as well as photos, videos, device settings and app data.

For more:
- read this Los Angeles Times article

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