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http://www.wired.com/gadgets/miscellaneous/news/2008/01/ipod_rentals

by Bryan Gardiner

A number of iPod owners have discovered that their recently purchased iPods won't work with Apple's new iTunes video rentals, even though the iPods have video playback capabilities.

As of Tuesday, the issue had been raised multiple times in Apple's support forums. So far the company's only response has been to confirm that movie rentals work only with the iPhone, iPod touch, iPod classic and the third-generation iPod nano. Earlier iPods, including fifth-generation iPods sold before the September 2007 release of the sixth-generation iPod classic, are incompatible with rented videos.

"This is false advertising," says Raymond Blanchard, a disgruntled iPod owner. "I demand an upgrade or fix."

Others were more upset over the apparent randomness of Apple's decision.

"Why on earth would they not make this service available to fifth-generation iPods?" one forum poster notes. "Mine is less than six months old! If all of the other services are available for the fifth-generation video iPods, why not rentals? I have a tough time believing it would not be technically feasible."

Indeed, Apple has recently boosted functionality in certain products with firmware updates -- while offering no upgrades (or charging for upgrades) for other products. At the recent Macworld exposition, Steve Jobs elicited cheers from Apple fans by announcing a completely reworked AppleTV and saying that the upgrade would be free to previous AppleTV owners. Similarly, iPhone users received a free firmware upgrade that allows them to use new features like webclips, multiperson text messaging and enhanced Google map functions. Owners of the iPod touch, on the other hand, have to pay $20 for those same features, a fact that likely has to do with Apple's accounting and revenue realization practices.

Apple did not immediately respond to Wired's request for comment, and the company has yet to provide any definitive reason why its fifth-generation iPods won't work with iTunes movie rentals. But that's not stopping the speculation.

Some analysts, like Forrester's James McQuivey, say the issue could be related to digital rights management or a planned obsolescence strategy -- encouraging people to buy the most current generation iPods.

For now, the most likely suspect has to do with what some have deemed the "analog hole" present in 5-G iPods. Previous generation iPods have an analog video output that works with standard video cables. As some have observed, this theoretically makes it easier to copy rented movies, by plugging the iPod into a camcorder or other video-recording device.

In the most recent iPod classic and iPods nano models, the TV-out port no longer works with older, third-party video cables and docks -- most likely in order to close the analog hole, according to The Unofficial Apple Weblog's Christina Warren.

"I guess it would just be too much of a risk for Apple (and the movie studios) to allow 5-G customers (to) connect their iPods to a TV via an open TV-out cable so that the (standard-definition) content could then be captured using the analog hole," Warren concludes in a recent post.

Yankee Group's Carl Howe offers another likely reason for 5-G iPod-rental incompatibility.

"The other factor is whether you have a secure real-time clock," Howe explains. "Why do I want a secure clock? Because you don't want people messing with the time code since (iTunes) rentals are only supposed to last 24 hours after you start viewing them."

This was almost certainly a requirement imposed by the movie studios, he concludes. Indeed, some users recently discovered that by setting back the clocks on their PCs, they could temporarily extend the duration of their iTunes movie rentals, and movie studios probably wanted to limit their exposure to that hack.

In short, Howe says, iPods don't fall under the growing trend of "hardware as a service," whereby hardware receives continuous upgrades via firmware updates.

"(The iPod is) 'hardware as hardware' instead of 'hardware as service,'" Howe says. "Not that that's going to be very consoling for iPod owners."

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slightly related note:

Apple already failed in making a game console?
http://www.wired.com/gadgets/mac/multimedia/2008/01/gallery_apple_flops?slide=2&slideView=2

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