Apple Heats Up Internet Video Battle

Its new online rental service prompts an immediate response from Netflix.

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Apple TV will soon get access to 1,000 movies to rent.
Apple TV will soon get access to 1,000 movies to rent.

Netflix dropped a nice little surprise in my E-mail inbox this morning: The company no longer limits the video I can stream over the Web. Thank you, Netflix, and thank you, Apple.

The move is an obvious counter by Netflix to stronger competition from Apple. At the annual Macworld conference, Apple CEO Steve Jobs today said the company would revive the moribund Apple TV with a software upgrade. Now users can stream video directly from the iTunes online store without a PC.

More important, iTunes will finally get video rentals, some in high definition. Jobs confirmed long-rumored pacts with Hollywood studios that will put 1,000 movies into iTunes that will rent for $4 each, and those available in HD will go for $5. Plus, he's dropping the price of Apple TV to $230.

Now I'm tempted to get an Apple TV. The box hadn't much interested me because iTunes offered just a couple hundred TV shows and movies, and the movies were for sale only.

But I've already got a PC hooked up to my big-screen TV. And Netflix lets me stream movies and TV free, as part of my monthly membership—now with no time limits. I suddenly sense a disorienting wealth of choices.