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

33 Comments

  1. Sum Jung Gai Says: “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.”

    Don’t want your “own personal copy”? Well, you’re in the minority of the consuming public there, Gai. Either that, or your’re just a movie company exec (or from Netflix), trolling the forums in a weird effort to bend the masses towards favoring a business model that they’ve already established is ‘niche’.

    I will agree that the storage thing is going to be an issue for a lot of people, especially if there’s no option for burning backups (an almost certainty). If that isn’t addressed, and if the studios get their way on pricing, I’ll lay down money now that the worst days of music P2P will look like a picnic once the pirating of movies takes off. The combination of lack of convenience and high pricing will gaurantee it.

    “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.”

    Copy-limited, yes, but I doubt that will be the default size. Most likely these movies will be in Standard Definition format, or just slightly better, with some easy way to down-sample them so the current versions of the video iPod can play them. Maybe with a special iMovie plug-in or something.

    This pricing bruhaha sounds like it’ll be quite a battle for Apple in the short-term. On the surface it would seem that if the studios get the upper hand, they would wind up killing the goose before it’s golden, and thus cooler heads will prevail. However, I think these guys know that the real action will happen when HiDef content comes online, and they won’t be doing that until TPMs become a little more ubiquitous (for Apple as well as every other computer maker). Once they have their piracy fears alayed by those little bits of silicon in everyone’s rig, they’ll probably loosen up on pricing, if for no other reason than they may be able to make copies dissappear or what have you & then FORCE you to buy again. Until then I think they may be more than happy to keep the price of admission pretty high, just to recoup whatever piracy losses they think will occur with the current situation, as well as to keep the market of ‘good enough’ definition content from getting to big before the onslaught of HD.
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  2. Odyssey67 says: Don’t want your “own personal copy”? Well, you’re in the minority of the consuming public there, Gai.

    Gai is in the majority there, Odyssey67. There are far more dvds rented than purchased. Movies are a whole different ball game than music.

  3. Yep, I really do want to watch VHS quality movies on my 15″ laptop screen (or tiny iPod screen) Plus, I’d also love to pay more than $10 for the privilege of doing so, (not forgetting my bandwidth and disk storage costs).

    Rrrright.

    I have quite a few DVDs already, and they’re pretty good quality. Why would I want to go backwards and watch a movie in crappy quality on a small screen? Or really crappy quality on a big screen? I’m not even going to mention the fact that the content itself is often crappy as well. Ooops, I did, oh well.

    Where’s the HD version of the movie? Where’s the XServe-style rack device available so I can plonk it in with the rest of my hi-fi gear? Where’s the laptop with a reasonably sized hard drive (> 250GB) capable of storing many films, as well, as computer related data?

    I honestly don’t think that technology is ready for this yet and my guess is Apple is rushing this just to beat the other guys. Early adopter is never truer.

    Now, the other issue – convenience is important, but is it really *that* important to trade this for quality? The answer is unfortunately, probably a resounding yes: McDonald’s does a roaring trade on selling poor quality food quickly. There may also be other evidence – how many people really think that watching a widescreen movie on a 4:3 TV is somehow robbing you of some of the picture?? (Don’t laugh, many people do think this way, because, ironically, they aren’t thinking about it properly.)

    Or maybe this is all just another upgrade scam. Maybe DVDs as we now know them will disappear in the future (at least for first release movies), leaving us with crappy $10+ downloads, or $30 HD/BluRay DVDs? Or maybe just $10+ crappy downloads and $30 HD downloads we have to store ourselves.

    The optimist in me hopes that bandwidth and storage will drop so much in the next few years that $10 HD versions will indeed be available for downloading and will be stored on a cheap rack mounted player capable of sending it’s data to any TV in your house. Then again, maybe local storage will disappear entirely, leaving us with a $5 24-hour hire of a movie, available anywhere, anytime. Or better yet, if you’ve got a server at home, why can’t u just stream off of that where ever you go? I hate hotel TV!

  4. quote: “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,’ :End quote

    Ok this not a problem between Steve Jobs and the movie people.

    Those who sell movies in theaters all want one price, even if the movie is good or bad. Because they have fixed costs to cover.

    Also if a movie is listed at say $3 when it’s normally $6 what does that tell everyone? That’s it’s a bad movie right?

    Would you bother even sitting partially through a bad movie and waste $3, plus snacks just to be disappointed?

    So that’s why movie houses charge all the same price for movies across the board as not to send a signal to people that a movie sucks.

    Another thing people don’t know is this: Sure Apple’s DRM is light now, it’s because the hardware isn’t able to enforce stricter DRM schemes yet. But those schemes are indeed coming and in fact the hardware needed to implement the strict DRM schemes are present in the new Intel based Macs.

    Extensible Firmware Interface is a extra firmware level between the OS and the main firmware/hardware. Any calls to hardware are first “verified” through EFI. EFI built drives can go online, download updates, report what it wants before, after and DURING any opertating system running on the machine.

    All part of Trusted Computing you can learn more here, our machines will soon not be ours any longer.

    http://en.wikipedia.org/wiki/Extensible_Firmware_Interface

    http://en.wikipedia.org/wiki/Trusted_computing

  5. Never Fade, We are different. I rented Braveheart once. It was awesome. A year or so later I got a copy for Christmas. I have never opened it.

    If most, or even many, people will watch a movie over and over, the iTunes purchase model may make sense.

  6. Nobody is going to be downloading FULL HD 1080i/p quality video any time soon. There is not enough bandwidth and for that matter infrustructure of the net itself to support this. Take an HD-DVD – approximately 30GB of data. I can download 200MB in about 5-7 min. – depending on traffic. Let’s take the best case scenerio of 5min. To download a full HD 30GB file will take 12.5 HOURS. Not. Gonna. Happen.

    It will be downgraded and compressed for the forseeable future. It’s going to take fiber to the curb. Period.

  7. Charging more for popular movies is GOUGING. With the exception of bandwidth, which is all on Apple anyway, where is supply and demand? They make the file one time and Apple duplicate’s it (serves the file) and sells thousands of copies. No matter how huge the demand is supply will never be short. So charging more is pure GREED!

    And HD, it is a total joke. THis is just another marketing scheme to sell more players and TV’s. Honestly we could go on watching DVD’s as they are now for years and years. Just about everyone has a DVD player by now. Who are they going to sell to? Big companies like Sony know this so they are pushing more technology to suck your wallet dry. Doesn’t matter that old DVD player would run for ten more years, you need to throw it away get a new player, TV and while you are at it re-purchase all your favorite movies in this new format because it really is that much better. What do you know Sony makes money from that too. When there is a new HD DVD player in every home they’ll gather ’round the table and convince you that is no good either. Hopefully this time it will be something better than the tiny baby step from DVD to Blu Ray or HD DVD.

  8. You can get 3 DVD’s at a time with unlimited access from Netflix for $18.00 a month; therefore, a DVD junkie can watch 12 DVDs in 30 days which equals $1.50 per disc. For a measly $10 you can watch 4 DVDs per month or $2.50 per disc.

    The fact that Apple wants to charge at least four times a much as Netflix for the convenience of downloading the same DVD versus getting it delivered to your mailbox is ridiculous. The fact the film studios want to charge even more if incredible. Anyone who is willing to pay the prices that Apple and the studios are wanting has more cash than brains.

  9. With all the talk about blue-ray and hd-dvd, how about the humble hard drive?

    Surely the whole point of downloading at whatever the price or quality is so that movies can be downloaded period! Sort out the legal mess to enable at least some sort of movie file download then the quality stuff will come.

    This was the same during the early years of VHS, just after it won the consumer battle where movies on VHS weren’t versions of the last major Hollywood blockbuster, but a lot more amaturish and not forgetting the porno movie!

    Isn’t it true that Quicktime 7 can display Hi-Def movies via the net using the H.264 protocol?

    Personally I’d use blue-ray and/or hd-dvd just to store my paid for hi-def movies as a backup medium and only use a hard drive to actually watch a movie hooked up from a Mac Mini to an LCD screen. Yes add expansions to the Mini to get the highest storage you can afford.

    A note on LCD’s these maybe smaller, 40″ is the minimum so I’ve been informed for HDTV, but they will not burn so easily as Plasma’s do and so will last longer.

    $9.99 does seem too low to me and don’t forget the studios have been listening and watching the music industry, let alone be involved with both industries. These people rarely, very rarely make the same mistake twice.

  10. McDonald’s Red Box rents DVDs for a dollar per night. If you keep it, they keep charging until you’ve paid for it. It’s great except that you have to go to McDonald’s to find out if the machine’s working or not. It’s not in all parts of the country either.

    You would think Apple could negotiate a similar deal where you download a movie once and pay each time you view it. At a dollar that’s excellent. Even at $2, it would be fantastic–unless you want to watch part of it one night and the rest later.

  11. b says: “Gai is in the majority there, Odyssey67. There are far more dvds rented than purchased. Movies are a whole different ball game than music.”

    That may be, but it has yet to be proven that the ball-games are very different. And until they are, I think it’s instructive that the iTMS model has trounced streaming audio, which is the nearest equivilent we have to compare with’renting’ a digitized, downloadable video.

    You mention renting DVDs being a bigger market than owning them – well all I know is that the Blockbuster near me has an empty lot in front of it even on the weekends, while BestBuy’s DVD isles are bristling with buyers everytime I walk in there. In fact, BB is the only big box video rental place left near me – all the rest have closed down. I myself have rented maybe one DVD in the past year, but I’ve bought about half a dozen, and most people I know are doing about the same.

    Besides, even if you’re right b, think of it this way: Renting is pretty big in residential real estate too, however only a small minority of people don’t prefer to own their own home. People rent apts & what not in high numbers due to the high price of actually buying their own place. And this is exactly what you see in the video market- Blockbuster et al got huge during the years when buying a video could run you $40-50 on average. As those prices have dropped, so too has the rental business, and I think Netflix – good as it is – is simply cannibalizing whats left of that market with superior convenience and no return fees. Return fees themselves got out of hand when the straightup rental side of the business started falling for the retailers, so that should tell you something too.

    There might be more money to be made by the studios if the public is herded into a renting paradigm again, and ‘herding’ is the only way this can happen since the straight-up technology continually makes owning video & audio content cheaper and cheaper for the consumer. But as I and a bunch of others have been telling you guys for years, this – TPM’d & EFI’d Macs – has never been about making things cheaper/better for consumers; it’s been about rounding up the herd an forcing them back into a more profitable paradigm from the past.

    Moo. ” width=”19″ height=”19″ alt=”cool cheese” style=”border:0;” />

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