I agree, it wouldn't make a very good business model for Apple. Why would anyone buy the HD version if they could just buy the SD version and upgrade for free? And why buy the 4k version if you could upgrade from HD for free?
So, for their trouble, Apple would get millions of people upgrading their old movies and see a huge increase in the load on their servers, all for nothing.
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I hope Apple hires you to roll out their 4k content so we can all upgrade for free! But I haven't seen much evidence of them operating like a charity in the past.