This is pretty much how I was anticipating this would go down...
Apple's in new territory once again. When they launched iTunes and iPod, no one was certain of the future of the internet distribution model. Even though it's been examined for years (I wrote a research paper on it for a marketing research class in college in 1996) nobody was ready to take it seriously until some numbers came in.
I think now the studios have had their minds changed gradually by a few things:
1. The emergence of iTunes as the dominant music retail outlet in the US.
2. The slow death of music retail chain giants such as Musicland Group in the wake of the internet revolution.
3. The proliferation of technological convergence devices such as iPhone, AppleTV, etc. which have made it horribly easy and addictive to purchase content online.
5. Independent content creation outlets like Youtube which filled the gap during the writer's strike, making broadcast networks and cable subscriptions not the only choice for visual entertainment in the home; the growth of which has also spuurred...
6. An explosion in consumer demand for broadband connections. This was previously overestimated in the 90's when there wasn't content to stimulate demand. Now that media are everywhere on the internet, broadband demand is rising at a rapid pace, and broadband bandwidth with it.
Since the HD rental model has seen some success, and there are actual figures behind iTunes to show how well rentals versus purchases work, NOW there's a basis for etching out an agreement with the studios... and Apple being the #1 music retailer surpassing even Wal-Mart, despite the industry's expectations that internet distribution would have only a small role to play in the future of distributed content, has shifted all the power into Apple's hands.
This is not unlike the way they've changed the game with iPhone... turning the smartphone business model on its head by developing a device compelling enough to take the playing field away from enterprise and into the far more saucy consumer market... Apple's turf.
