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Apple to Offer Movies Via iTunes
Techtree News Staff, Jun 20, 2006 1508 hrs ISTReports say that Apple Computer is in active negotiations with most Hollywood studios to offer movie downloads via its iTunes Music Store.
Reports say that Apple Computer is in active negotiations with most Hollywood studios to offer movie downloads via its popular iTunes Music Store.
It is believed that a foray into the movie business is a natural progression for Apple. Having started with music downloads, Apple graduated to offering iPod owners the chance to watch TV shows on their digital music players; and the latest move is quite in-step with what analysts have been long expecting from the company.
According to sources, iTunes might begin offering film downloads by the end of 2006, but currently pricing issues are said to be holding back the negotiations.
Apple's chief executive officer, Steve Jobs, who has been personally involved in the talks, initially proposed selling all films at a flat price of $9.99, an offer the studios flatly rejected.
As against Jobs'suggestion, studio executives want a range of prices that rightly mirror prices of videos and DVDs available at retail stores, which typically run into amounts of up to $19.99 or more especially for new releases. One of the studio executives who is in the know of these negotiations, says that the studios cannot be put in a position where they lose the ability to price their content differentially on the basis of its popularity.
Apple is known to offer television and music companies a 70 percent wholesale rate, and is now believed to be offering the same to film providers. In case of songs and television shows, Apple was largely defining a new market but in case of feature films, DVDs of these are already being sold at varying wholesale prices depending on the date of release.
For the studios though, putting-up movies for sale through iTunes seems like a logical next step as they already offer movies online at Web sites such as Movielink, CinemaNow, BitTorrent, etc.
All said and done, studios are very much looking towards Apple to grow digital distribution mainly because of iTunes' huge install base, and the popularity of video iPods. Apple says it has sold over 22.5 million iPods since the video version was launched in October last year.
A studio executive added that every studio wants to have broad distribution in digital, and that they all know having Apple as part of this is very, very important.
It is believed that a foray into the movie business is a natural progression for Apple. Having started with music downloads, Apple graduated to offering iPod owners the chance to watch TV shows on their digital music players; and the latest move is quite in-step with what analysts have been long expecting from the company.
According to sources, iTunes might begin offering film downloads by the end of 2006, but currently pricing issues are said to be holding back the negotiations.
Apple's chief executive officer, Steve Jobs, who has been personally involved in the talks, initially proposed selling all films at a flat price of $9.99, an offer the studios flatly rejected.
As against Jobs'suggestion, studio executives want a range of prices that rightly mirror prices of videos and DVDs available at retail stores, which typically run into amounts of up to $19.99 or more especially for new releases. One of the studio executives who is in the know of these negotiations, says that the studios cannot be put in a position where they lose the ability to price their content differentially on the basis of its popularity.
Apple is known to offer television and music companies a 70 percent wholesale rate, and is now believed to be offering the same to film providers. In case of songs and television shows, Apple was largely defining a new market but in case of feature films, DVDs of these are already being sold at varying wholesale prices depending on the date of release.
For the studios though, putting-up movies for sale through iTunes seems like a logical next step as they already offer movies online at Web sites such as Movielink, CinemaNow, BitTorrent, etc.
All said and done, studios are very much looking towards Apple to grow digital distribution mainly because of iTunes' huge install base, and the popularity of video iPods. Apple says it has sold over 22.5 million iPods since the video version was launched in October last year.
A studio executive added that every studio wants to have broad distribution in digital, and that they all know having Apple as part of this is very, very important.
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