Report: Apple in negotiations with movie studios; $9.99 feature films coming to iTunes soon?

“Five years ago, when Steve Jobs was in negotiations to sell songs on iTunes, he gave music execs a choice: Either work with me or get left in the dust,” Ben Fritz reports for Variety. “They worked with him.”

“But even though the deals may have helped save their business from piracy, many in the music industry now call it a devil’s bargain. Apple now commands more than 80% of the growing digital music market and has a huge influence on how much such music will cost,” Fritz reports.

“It’s that type of clout that makes many in the film industry nervous as Jobs and Apple negotiate to extend iTunes to feature-length films, a natural step after the store added TV shows last fall,” Fritz reports.

“Since 2001, when Apple introduced the iPod digital music player and iTunes software, followed by the iTunes Music Store, the company has undergone a radical transformation. In just five years, it has sold 1 billion songs, and since last October, 15 million TV shows and music- videos,” Fritz reports.

“As for adding movies to iTunes, Jobs personally heads up most negotiations, although VP Eddie Cue has taken up some of the slack as competing studios are wary of doing business with a member of Disney’s board,” Fritz reports.

“Studios have resisted Jobs’ initial insistence that feature films be priced at the easy-to-remember $9.99. After all, library titles are typically sold to Wal-Mart and Best Buy significantly cheaper than new releases. Studios now are trying to convince Apple to sell similar content at multiple price points, something the company has never done,” Fritz reports.

“Also complicating the deals: The studios are working out terms with a host of other distributors, including Amazon, Movielink and BitTorrent, in part to make sure that one company does not dominate. It seems that none of the studios wants to be first in making a deal with Apple. Disney would be the logical leader, but even they are cautious, fearing it will look like in-house synergy rather than a business decision,” Fritz reports.”

Full article here.

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Related article:
Apple releases iTunes 6 with 2,000 music videos, Pixar short films & hit TV shows for $1.99 – October 12, 2005

28 Comments

  1. Good god movie industry, would you get with the program already? It’s 2006. We have this thing called the “internet” now, it’s not going away, so get used to it. You should have been selling movies online in the ’90s. Instead, you and your friends in the music industry decided to attempt to roll back the clock to the pre-internet era using lawsuits, threats, and political clout. You failed. Get your shit on iTunes or get out of the industry to make room for more innovative artists and companies.

  2. Realistically I would think that some of these companies would initially make short term deals for a limited number of films. I think they have to realise that at the beginning new markets such as this have to be as simple and as transparent as possible. I don’t think anyone is under the belief that in 5 years from now that all downloads will be 1 price, or at the same quality etc, etc. At the moment, even with the music market (with which Apple has been massively successful) we’re still very much at the beginning. You don’t go into it thinking that any initial attempts are gonna be the be all and end all of sales through this medium.

  3. Good article by Fritz. Balanced with a fair amount of research and new information not written about elsewhere on the web or in the MSM.

    I think Apple should adopt a 3-tier for movies – $4.99 for older or not popular movies (bargain bin), $12.99 for new releases in their first month, and $9.99 for the rest. People have grown used to variation in DVD pricing, especially with the bargain bins/racks at the big box stores.

    Even at those prices, I would expect the 16:9 ratio and a resolution increase to 640×360 to go with the new video iPod and for home TV use.

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