It's not just Steve Jobs leaving Apple (AAPL).
The iEverything company is killing off the option of television show rentals at $0.99 a pop from iTunes. It's true that just two of the major Hollywood studios were participating in digital show rentals -- and only offering up a limited amount of content -- but this is lousy timing on Apple's part.
Netflix (NFLX) is now just days away from boosting prices by as much as 60% for subscribers. This move will not only increase the perceived value of temporary streams, but it will also create a fair deal of churn at Netflix itself. More than a few of the service's 24.6 million domestic subscribers will begin exploring video alternatives, and now iTunes is making itself less competitive.
Even if higher prices at the Netflix buffet don't result in a spike for piecemeal rentals, there's no point in backing out now when there could be a clearer answer a few months later -- specifically, if the persistent rumors of Apple introducing an iOS television next year prove true.
Apple's decision to boot couch potatoes isn't the only recent head-scratcher. Let's go over some of last week's other biggest surprises, blunders, and just flat-out boneheaded moves.
A bad recipe for BlackBerry jam: The key to turning Research in Motion (RIMM) around -- if that's even possible at this point -- is not pumping up the volume.
The BlackBerry maker is introducing a music subscription service, hoping that smartphone owners will be willing to pay another $5 a month for a bizarrely limited platform. Premium subscribers will be able to access as many as 50 songs from a large digital catalog of music on their phones with BBM Music. The tracks can be swapped out, but with surprisingly limited flexibility.
More generous services have struggled to gain traction. Rhapsody and Napster have had their ownership change over the years, and there has to be a reason why Apple's iTunes has never gone this route.
Beyond that, the aim is off here. I'm not suggesting that BlackBerry owners don't love music, but you rarely see a BlackBerry user jamming out with earbuds on. This remains largely a corporate smartphone platform with folks who have other things to worry about than which 50 tracks will make the cut in any particular month.
There's also a silly social element to BBM Music, where fellow subscribers can expand their offerings by sharing playlists. This would be a winning viral move if the service was established, but as Zune's own social sharing failure taught us several years ago, a fringe player rarely draws a crowd. Finding a single BBM Music subscriber will be tough, but two? Don't expect symphonic grandeur at a solo recital.
Misplaced optimism: Bad news doesn't always result in a lower share price.
Collective Brands (PSS) -- the footwear retailer behind Payless ShoeSource and Stride Rite -- reported a steep charge-laden deficit in its latest quarter. Collective Brands also expects to shutter 475 underperforming stores, with most of those closing by the end of this year.
This all sounds pretty grim, so why did the shares soar 34% higher last week? Well, the company also revealed that it will explore "strategic alternatives," which is Wall Street speak for putting itself up for sale.
Even crummy companies move higher when they put themselves on the bidding block, but I can't be the only one wondering how much a footwear retailer can fetch when business is doing so poorly that it's closing down hundreds of stores. They don't call them Payless for nothing!
Another stock that thrived in light of problematic news was TiVo (TIVO). Shares of the DVR pioneer soared 26% last week on strong licensing royalties in its latest quarter. However, TiVo continues to lose money -- and subscribers: It closed out its fiscal second quarter with 1.9 million cumulative subscriptions, 456,000 fewer accounts than it had on its rolls a year earlier.
I get the appeal of TiVo on the licensing front. The company is either getting cable and satellite giants to fork over juicy royalties for using its time-shifting patents or spanking the renegades in court. However, unless TiVo begins to grow its subscribers or return to profitability, one has to wonder if it will still be relevant in the inevitable future of streaming, when everything is on demand -- Apple's $0.99 TV show rentals notwithstanding.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Netflix. The Motley Fool owns shares of Research In Motion and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Netflix, as well as creating a bull call spread position on Apple.
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