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Apple CEO Steve Jobs announces the new video download service from iTunes during an event in San Francisco. Photograph: Justin Sullivan/Getty
Apple CEO Steve Jobs announces the new video download service from iTunes during an event in San Francisco. Photograph: Justin Sullivan/Getty
Apple CEO Steve Jobs announces the new video download service from iTunes during an event in San Francisco. Photograph: Justin Sullivan/Getty

Apple takes a gamble: so you want to watch films on your iPod?

This article is more than 17 years old
· Plans for video revolution unveiled by Steve Jobs
· Films can be viewed in living room or on move

It has already changed the music business - and amassed an army of fans sporting its trademark white earphones. But the next revolution, according to Apple, maker of the iPod, will be televised.

The company last night raised the curtain on its plans to take on the movie industry by selling full-length feature films over the internet, for viewers to watch on their home TVs.

Steve Jobs, Apple's chief executive, put an end to months of rumours about its interest in movie downloads by announcing deals with the Hollywood studios owned by Disney, of which he is a director. "Today we're starting out with films from Walt Disney Pictures, Pixar, Touchstone and Miramax films," Mr Jobs said at the company headquarters in California.

"We're making available over 75 films online, and we're going to be adding more every week and every month, including the year's most popular movies, Pirates of the Caribbean 2 and Cars." Mr Jobs also unveiled a forthcoming device called iTV that will be able to transmit video from a computer to a living-room television screen.

The new download service, which will initially be available in America but is expected to roll out in Britain next year, will offer new movies as well as classics such as Shakespeare in Love, The English Patient and Enemy of the State. Downloads will cost as little as $9.99 (£5.30), and viewers will be able to watch their purchases on an iPod, computer screen or stream them to a TV.

"This potentially could be the time that portable video kicks off in a mainstream way," said Adam Vaughan, managing editor of Stuff magazine.

Apple, which has sold more than 50m iPods in five years, will hope it can use its status as market leader in digital music to steal a march on rivals and become the number one destination for online films.

It needs a success. It has been a year since any significant improvements were made to the iPod and, despite huge sales last Christmas, the brand show signs of flattening out. Researchers have warned that signs of a consumer backlash are beginning to appear, but retail experts believe that the new products, which also include a colourful iPod nano and a tiny clip-on iPod shuffle, could provide a boost for the busy winter period.

The public's appetite for video over the internet is growing fast, with sites such as YouTube gaining prominence and studies suggesting that up to a million films are being downloaded illegally every day. While the iTunes store already offers downloadable TV shows and music videos, adding movies to the mix has proved more difficult. Larger video downloads are not only technically challenging - they are likely to take more than 60 minutes, even over most high-speed broadband connections - but Hollywood has also long voiced concerns about working with technology companies.

Speculation over Apple's plans for film downloads has grown massively since January, when Mr Jobs took a seat on the board of Disney. Insiders say his dual role, created after the takeover of his animation studio, Pixar, which has made films including Toy Story and The Incredibles, put him in a unique position to broker a deal with Hollywood's biggest names. While industry insiders expected an iPod primarily intended for showing video, Apple has held back on such developments. The company has stated that it did not think people want to watch longer forms of video on a small device, and focused on making its line of iMac computers increasingly TV-like.

Last night's announcement indicates a shift, and experts say that it reflects the fact that many companies are scrabbling to deliver TV shows and films over the internet. "It's a logical step," said Jerome Buvat, head of research at CapGemini. "If Apple manages to connect the PC with the television, then they'll be very successful. This is what most other players haven't been able to do - and it's not going to be a mass-market service if you don't have the possibility of watching the movies on your TV."

Last week Amazon, the world's biggest online retailer, unveiled its own version of online movie service, allowing customers to download full-length films and television shows to their computers. But Amazon Unboxed, which offers titles including The Matrix, Brokeback Mountain and 24, has already come in for criticism for being unwieldy, slow and restrictive.

The move also comes as Apple's iTunes service faces increasing competition for the digital music market.

As Mr Jobs announced his plans, iTunes' biggest rival was trumpeting its arrival in the UK and Europe. "We really do believe that with this launch the iTunes monopoly in Europe is over," said David Pakman, chief executive of eMusic, America's second-largest music download store. "We don't think Apple and iTunes is what customers want long-term."

Backstory

When the iPod launched in October 2001, it was unique. Today, Apple's competitors have caught up and there are a number of contenders for its MP3 crown. Sony, creator of the iconic Walkman, has a range which matches the iPod family in every respect. Its new Sony Ericsson V630i music phone allows users to link up with Vodafone's internet radio service and rate songs so they hear more of the music they like. The Chinese challenger is the Meizu miniPlayer, which will be in British shops soon. It will offer similar features at a reported £50 less than the iPod nano. The snappily named mobiBLU US2 has capacities to match the iPod and includes a voice recorder and audio enhancement.

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