It looks like it is more than a rumor at last — Apple is entering the downloadable movie rental biz with both Fox and Disney as partners. No one could be happier than I... except... oh, dear...

What am I to do now?

I've been a Netflix subscriber since October 2004, getting the most out of that lovely 3-at-a-time unlimited subscription plan. I installed a special security mailbox at my new home specifically so my incoming Netflix discs wouldn't disappear while I was at work. (Netflix was very nice about it, but after losing ten discs since my move a year ago, enough was enough.)

But I also love my Apple TV. I was one of those early adopters, ordering my unit the day they were announced for sale. Despite all the naysayers, I've never regretted the purchase. Apple TV performs flawlessly at bringing my iTunes-based video to my big-screen TV. In fact, I broke down and joined the flat-screen HDTV revolution especially to use with my Apple TV, buying and installing my HD set while waiting for my Apple TV to arrive. I keep my favorites among my personal DVD collection in my iTunes library for convenient repeat viewing (thank you, Handbrake and up yours, DMCA). I buy the occasional movie from the iTunes Store, but I'm mostly too cheap to pay $9.99 to $14.99 a movie for downloads. If I want to own a movie that badly, I buy the DVD.

I do buy lots and lots of TV shows this way. $1.99 at a time is pretty painless, though I have been known to indulge in whole series purchases, too. ( Jonny Quest, you say? Wheeeee!!!!) I use Apple TV for video podcasts, plus I have an Elgato EyeTV Hybrid attached to my new iMac to record all the stuff I miss and bring it right to iTunes and my Apple TV for convenient time-shifted viewing.

So, a rental service from Apple is perfect for me. I get the convenience of Apple TV (and can you imagine Apple doing a download service that isn't Apple TV centered? I can't...) with the lower cost of rental. Will it be subscription based or a la carte? Either way, it works for me.

Except... I love both Netflix and Apple. And I am probably only going to be able to justify using one of them as my rental movie source!

Why do I want an Apple iTunes-based movie rental program?

• Apple will make it fast, fun and utterly effortless. Face it, don't they always? The iTunes Store dominates — hell, it practically owns the downloadable music market simply because the iTunes/iPod ecosystem is easier to use than anything else out there. An iTunes-based movie rental system will have a similarly compelling interface. Movie rentals are an irresistible impulse buy if they are simple and fast. Apple will, inevitably, make the experience amazingly pleasant and transparent.
• Almost-instant gratification. Adding things to my netflix queue is not difficult at all. But then I have to wait. If the title is even marginally popular or new, I have to wait a lot. (I am so tired of seeing "Very Long Wait" pop up on my Netflix queue that I could just scream. I only recently was able to get Shrek the Third, and how long has that been out on DVD?) A downloadable rental service reduces the wait from days (sometimes weeks for a popular title) to hours or minutes, depending on your personal bandwidth. There will be no reason for a popular title to be any harder to get than an obscure one. This works in Apple's favor, too. I often put stuff in my Netflix queue on a sudden whim, only to remove it later before it ships when the casual desire to see the movie fades. With a download service, I get the movie while I am still in the mood to see it.
• Security assured. As I mentioned, I had to put in a special locking security mailbox to protect my Netflix deliveries from theft. No problem like that with Apple downloads.
• The ultimate in easy returns. I got Netflix because I never seem to get around to returning rentals to the store. My late fees ran to more than my rental charges for awhile. I don't have to worry about when I take something back, but I still do have to remember to pack up the Netflix disk and take it to a mailbox somewhere for return. Sometimes I don't get around to this for a long time, thus delaying further items in my queue from reaching me. Occasionally I misplace a disk around the house somewhere and have to dig it up to return it. And it seems to take a lot longer than it should for those returns to reach Netflix, especially since I am quite near to a Netflix distribution center. With a download service, there are a variety of ways they could handle it, none of which should be harder than pushing a button or waiting for a rental to expire on its own. I can't lose a download, and crediting the return should be instantaneous.
• Possible rent-to-buy deals. If Apple (as most people expect) goes with a pay-by-the-rental plan, I can't imagine Apple missing out on the opportunity to nudge extra movie download sales by offering a deal where part or all of your rental cost can be applied toward buying the download for permanent residence in your iTunes library if you choose to keep it. "Only a few bucks more, pal, and I don't have to fade away — whaddaya say? Just click the little button..."
  

But there are a lot of reasons to love Netflix, too — ones that Apple may not be able to duplicate.

• Painless subscription program. I never have to think about shelling out per rental with Netflix. Once a month, my subscription cost is invisibly charged to my credit card, and I get all the movies I want without forking over cash. Apple could (and no doubt should) emulate the Netflix pattern and offer a 3-at-a-time subscription program as well — but I'm not sure that is as sustainable from their side of the bargain with a download program. Netflix controls me to keep me from downloading two movies every night by filtering my choices through the postal service and through a queue-delay system based on how fast I turn over items in my queue. If I'm consuming more than they think I should, my queue slows itself down. Yes, that's a "feature" of Netflix that every subscriber hates with a passion, and it is a violation of the whole "unlimited" use image that Netflix shows to the public. But it works for them, and probably makes a lower subscription price possible. With a downloadable subscription service, Apple won't be able to do that, at least not with any subtlety. They would have to explicitly limit the number of downloads I can get in a given month. If they don't, that "almost instant gratification" advantage I mentioned before will come back to bite them in the ass. Sure, I'd love an Apple download system that let me have any three movies queued up for watching that I want at all times, swapping them out for new ones whenever I desire. Can they manage that (and sell it to the content providers) at, say $16.95 a month? I doubt it. Apple may have to go with an a la carte model instead, and that's not as painless or as good for the consumer.
• Incredible selection. Since Netflix rents physical DVDs rather than downloadable files, it does not have to make separate deals with every content provider. If it exists on a commercially-available DVD, Netflix can rent it out and they don't need anyone's permission to do so. This means Netflix can make available every obsure DVD release there is, from every content provider. And they pretty much do exactly that, with a library of over 90,000 titles. Netflix does have to make deals with all the content providers for their streaming movies viewable on the PC, and that selection is much smaller — around 5000 titles according to the company. But those are much less useful to me because I want to watch on my TV, not on my PC. My tastes run to the obscure genre offerings about as often as to the big blockbuster new releases, making the Netflix selection a particularly important selling point for me. I could get Pirates of the Caribbean from either service, but will Apple ever be able to offer me movies like Comic Book Villains, Atragon, Bugsy Malone, Steamboy, The Magdalene Sisters, The Devil Rides Out, Wrath of Daimajin, and The Conquest of Space — or TV collections of fare like The Flash, Wonderfalls, The Outer Limits, Alien Nation, The Lone Gunmen, From the Earth to the Moon, Jack of All Trades, and Banacek? (All of those are from my actual Netflix rental history...)
• DVD extras. Downloadable titles don't come with all the nifty DVD extras like behind the scenes featurettes, commentary tracks and other bonus material. Granted, some of this is utter fluff when all you want to see is the movie, but in some cases the extras are not to be missed. Except when you rent by download, you'll miss them.

If Apple offers a subscription program like that of Netflix, which way do I go? I couldn't justify both at Netflix-level pricing, on top of a monthly cable bill and the occasional DVD purchase. (Even if I could rent them again at any time, which I could through Netflix, you'll get my Godzilla DVDs and my copy of The Adventures of Buckaroo Banzai Across the 8th Dimension away from me only by prying them from my cold, dead fingers. Maybe not then.) I could crank the Netflix subscription down to one at a time for about $8.99 if I absolutely had to do so to get the obscure stuff and the DVDs where the extras are important. But the larger TV show collections would take years to rent through at that rate! (I get two or three at a time now and watch them in weekend marathons...)

If Apple goes with an a la carte rental model, I could justify only renting the stuff I really want to see right now — impulse rentals and blockbusters I'm dying to see. Anything else I could wait and get from Netflix at no additional cost above my base subscription price. If Apple's offerings don't go beyond newer releases from a few major studios, that would still not add up to many rentals. After all, I have digital cable on-demand films available to me now and I never use that service at all.

I have a perfect solution, but it is unlikely to happen. Still, I think it would be a wonderful deal for Netflix, Apple and all the customers of both companies. Apple should purchase Netflix outright. (Yes, I've said this before. More than once, in fact. It bears repeating, especially now.) This is how it could work:

• Netflix and Apple keep doing what they do well. Netflix keeps renting DVDs and selling surplus rental DVDs at discount prices. Apple keeps selling downloadable content. Nothing available now goes away, though some products and services change form a bit to make them easier, more broadly useful, and more synergistic.
  
• Netflix integrates with iTunes. Apple would integrate the Netflix queue into iTunes, making the iTunes Store the gateway to renting DVDs through Netflix as well as purchasing surplus DVDs from Netflix and ordering downloadable rentals. iTunes as a gateway is a proven commodity and Apple's greatest strength here. Want to watch a particular film? Search iTunes. It will tell you if it is in your iTunes library already, or what is available as a DVD or download purchase or rental — also offering to sell you the soundtrack album and (if Apple's really smart) a link to outside sources of interesting material like related Wikipedia pages, entries from Rotten Tomatoes or TV.com, etc. One click gets you whatever you want in whatever format it is available at the time.
• Apple's superior technology makes Netflix downloadables useful. Right now, the Netflix streaming content works only on Windows systems and cannot be viewed on portable devices or on your big-screen home TV. That means I never use up my free viewings that are a part of my subscription. I don;t want to sit at my computer to watch movies. Replacing that with FairPlay-protected downloadable video using QuickTime makes the downloads much more versatile and improves their quality. I can put TV shows on my iPod, and watch movies via Apple TV on my big family room screen.
  
• Netflix/Apple rentals and sales work together and support each other. You can have one queue, containing both downloadable rentals and rental DVDs, as you choose. Or buy a plan that you like offering a lot of downloadable slots and a few DVD slots, or vice versa. No matter what you are looking for, Netflix/Apple can bring it to you in some form or another. You can rent it or buy it — or rent to see it and then change your mind and decide to buy after all at a reduced price if you find you want to keep it. This one-stop-shop has it all, so why go to anyone else? Those already using Netflix are now exposed to all the Apple offerings, while iTunes Store users are constantly reminded what they can get from the Netflix side of things. Who can resist? Both sides of the business expand. Marketing for both sides costs no more than marketing for one or the other — and grows the whole thing. Gift card sales, credit card processing, web bandwidth — all of this is integrated in the most efficient way, and done with Apple's traditional flair.
• A taste of the Apple. Give three free DVD rentals or downloads — a one-month trial subscription as Netflix does now — to every purchaser of a new Macintosh. Give one freebie to every purchaser of a new iPod or iPhone, just to get them to try it. That gets the user connected to the system. After that, all they have to do is one-click to buy more. Again, who can resist? Soon, everyone's a CouchApple.

Yes, it's a dream. No way is Steve Jobs going to announce a Netflix/Apple pairing in January. It would be impossible to keep that secret. But he is bound to be announcing a video rental program of some sort. So... who will I choose? I have no idea. But I know I'd rather not have to choose. I'd rather just buy it all. If only...