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Apple and Fox renting movies

From Routers Apple and Fox plan movie rental deal.

I’m sure there’s alot of different ways people will comment on this however I’d like to comment on one particular paragraph which doesn’t make the slightest sense. Most people however probably just glanced over it.

Pali Research analyst Stacey Widlitz said the deal follows a trend of Hollywood studios selling directly to consumers and "cutting out the middleman."

Now correct me if I’m wrong but how exactly does changing your distribution model from

Studio -> Netflix/Blockbuster -> Consumer


Studio -> Apple -> Consumer

cut out the middle man?

The only real difference I can see is the equivalent to a change from studios selling DVDs to stores to rent. To one where studios rent shelf space from stores for their DVDs to rent to consumers. I’m sure alot of video rental stores would love a relationship like this because it moves just about all the risk onto the movie studios.

The other analyst they quoted gets closer to the mark with his comments about how it’s probably aimed at expanding the business to sell rental videos to a different market. However it could also be the start of a disruptive technology which will eventually replace video rental stores. Depending ofcourse on future computer networking infrastructure (Interweb speed) and the penetration/intergration of set top boxes able to take downloaded movies from the internet and play them on TVs.