No mention was made of the resolution of the film being releases. Rumors have Apple looking at a pay-per-view type of HD download service, but the maximum resolution would be only 720p at its onset when the current state of the art of HDTV is 1080p at the consumer level.

If you are a subscriber to the theory of the “Long Tail” this move on Apple’s part is a very big deal. The concept of the long tail states that the idea of being number one (at the box office, on the Billboard charts or even in a search result) isn’t nearly as important as having a vast reach of smaller, more specific elements.  For example, I am Legend will sell nicely as a download but could easily be outsold by the aggregate of 100 far less popular back catalog titles.  Now Apple gets both.

This move will directly compete with cable and satellite companies who are offering more and more content “on-demand”.  Apple’s bet, and it’s a good one, is that people will want to actually own a title even if they only own it on a hard drive (don’t forget to back that sucker up).  The need for wireless connectivity and overall home networking will become more and more pressing for mainstream consumers who want to access movies throughout their homes.  Up until now, it took systems like the unbelievably pricey Kaleidescape video server to deliver this kind of video throughout your home.  Now you can do it with Apple TV for a tiny fraction of the price and paired with the easiest and most robust download service.  It’s a powerful value proposition for consumers as iTunes also merges with a customer’s music collection and other media.

Convergence just got a lot closer to mainstream success.

Sources: Apple.com

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