Report: Movie studios flatly reject Apples’ proposed $9.99 pricing for feature films via iTunes

“After conquering the digital music biz and taking the lead with TV shows online, Apple is looking to feature films,” Ben Fritz reports for Variety.

“The computer company is in active negotiations with most major studios to add movies to its iTunes Music Store, most likely by the end of the year, numerous sources confirm,” Fritz reports. “The main sticking point is price.”

Fritz reports. “Apple CEO 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. ‘We can’t be put in a position where we lose the ability to price our most popular content higher than less popular stuff,’ said a studio exec close to the negotiations.”

“Studio sources expect an iTunes moviestore to debut by the end of the year at the latest,” Fritz reports. “Many predict feature films will bow on iTunes at the same time the video iPod with a bigger screen more appropriate for films is launched. But Apple is remaining tight-lipped, not even telling potential studio partners about its hardware plans.”

Full article here.

[Thanks to MacDailyNews Reader “bjh” for the heads up.]

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Related articles:
Report: Apple in negotiations with movie studios; $9.99 feature films coming to iTunes soon? – June 19, 2006


  1. Who freaking cares whether it’s $9.99 or $29.99? I don’t want to buy my own personal copy of every movie I watch. And until Apple or anybody comes up with a laptop with enough storage to save an entire movie collection, this is just Such a Dumb Idea. I just want to pay a monthly fee like I do on NetFlix to watch all the movies I want. And if I ever do decide to build up my own personal movie collection, it sure as hell won’t be 320×240 copy-limited versions.

  2. give the movie studios what they want. multiple pricing.
    9.99 for new releases and 5.99 for older movies.

    for a low resolution movie like the ones they sell on itunes, they
    should be happy people still buy them.

  3. I don’t mind having a library of movies, as long as the quality is high enough to replace DVDs.
    Of course, download times for such files might be too much for the average consumer and studios clearly would not want DVD quality copies that they will say would hurt their DVD sales and lead to piracy. Nevermind that with the correct pricepoint they could have a similar or higher profit margin on downloads compared to DVDs. Or that iTMS has shown that the right pricepoint will provide consumers incentive not to pirate because it is simpler to pay and avoid the pain of P2P (truncated files, poor file quality, viruses, spyware, and adware for Windows users, long, painful downloads, etc). Of course, the real reason is that they want to sell you the DVD and the download. The DVD for home viewing on the TV and, because ripping of DRM’d DVD illegal, the download your portable copy.

    I don’t really see the size of laptop HDs as being an impediment. Leave the entire collection on your home server and put 10 on your laptop for the trip.

  4. If it stays the same as the current video, I feel $9.99 is close or slightly too much for 320 x 240 high compression video. Especially when I can pay $15-$20 for 720 x 480 DVD or a hair more for 1080i HD blue-ray or HD-DVD these days. I personnally think $6.99 is closer to the value it should be.

  5. I agree with Jeffrey. Since I bought an HDTV last year, sd broadcasts and dvd’s are not as compelling to watch anymore. I have stopped buying dvds (rent only). Waiting for HD-DVD or Blu-Ray. I will not get anything unless its highdef…..

  6. Here’s what I think… If steve bends to the studios on movies, what will happen when he has to renew with music? they will want the tier system too. $5.99 for that new Chili Pepper’s song.

  7. $9.99? You can buy almost every DVD you want for less than $7 if you know how. (new) I can’t imagine paying $9.99 for a crappy quality download, I can barely get myself to pay $7 for a DVD knowing BluRay is near.

  8. I think that the studios will price themselves out fo the market if they are not careful. As stated by others, I will not spend $15-20 for less than broadcast quality. If they want to charge regular DVD prices, they better give DVD quality. Me thinks that the studios are getting very gready here since the downloads have no distribution costs and no packaging costs.

  9. I do not understand why people want to own movies. I seldom want to watch one more than once. Even when I do a second time will do me for years and years.

    That being said, why would I leave Net Flix, even at $9.99 a pop?

    Make them cry “Uncle” Steve.

  10. Missing the boat?

    Is not renting more profitable than selling movies? Netflix, all those Blockbuster mall stores – that’s a fortune in lease costs…

    I can only assume consumer movie sales is where retailers and distributors (Warner, Sony, etc…) make the high margins, thus selling movies vs. renting is where they want to play…

    I can equally assume, Apple will virtually give away the movies in order to sell more iPods and/or home theater (eMac = entertainment Mac) devices…

    EU: Of course, the EU wishes to destroy a model people keep choosing (iPod/iTunes) over other “open” models. The EU is hoping to defeat FairPlay DRM, which would of course lay the groundwork for the EU to dictate to Apple “You do the same lock-in game with your OS. So until you sell your OS to work on any Intel-based box, you can’t sell a Mac or OS bundled in our Communistic – eeerrrr, Socalistic free world!…”

    Overall, Hollywood had best go with an initial Apple dictated model (or close too) in order to successfully launch legal online movie downloads, and quit squibbling over money they don’t even have yet.

    One concession Apple could make is a two-tier pricing model:

    Stnd Def (720 x 480 CD Quality range): $9.99
    HD (1080i): $14.99

    This would be a concession to the industry to some extent, and give consumers some version of choice. Looking at it technology-wise, storage would cost incrementally more for the HD version, while margins for the studio’s would be much higher, a model they may agree too.

    As for downloading, the HD version would be downsampled on an iPod Video player for playback, and could either the HD or downsample version could playback to a TV – user choice.

    Apple has taken their time on whole model, and probably for good reason. Whether technical or otherwise, it is best they take the time required to bring a great and simple solution to the market and nail it, rather than rush the product/service and open a huge crack in the door for M$ to rush in and steal the day…


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