Disney sells nearly 500,000 movies via Apple’s iTunes Store in less than two months

“Box office success with Pirates of the Caribbean 2 and bigger audiences for its hit ABC television shows such as Grey’s Anatomy helped Disney double its fourth-quarter net income,” Matthew Garrahan reports for The Financial Times.

“Bob Iger, chief executive, said the company would build on digital initiatives such as the sale of movies and TV shows on Apple’s iTunes by revamping Disney.com, adding features such as streaming of its programmes and social networking,” Garrahan reports. “Since June there have been 53m downloads of shows on DisneyChannel.com while ABC streamed 19m advertiser-supported episodes of programmes such as Desperate Housewives and Lost. Disney has sold nearly 500,000 movies on iTunes.”

“However, the group’s digital push has not pleased everybody, with US retailers such as Wal-Mart and Target privately expressing concern about the effect of digital sales of Disney product on DVD sales,” Garrahan reports. “Mr Iger said the digital strategy had created ‘tensions over issues like pricing and [release] windows.’ But he added: ‘In general, our relations with retailers are in great shape.'”

“Disney’s fourth-quarter net income rose from $379m to $782m. Revenues increased from $7.73bn to $8.8bn. Full-year net income rose $2.5bn to $3.4bn,” Garrahan reports.

Full article here.

MacDailyNews Notes:
• After the initial week of curiosity with approximately 125,000 movies sold via Apple iTunes Store, the following 7-8 weeks averaged roughly 50,000 movies sold per week.
• On Monday, Disney announced that the #1 animated film of the year, Disney/Pixar’s “Cars,” and the #1 motion picture of the year, Walt Disney Pictures’ “Pirates of the Caribbean: Dead Man’s Chest” will be available for download at Apple’s iTunes Store on November 7th and December 5th respectively.

Related articles:
Fox movies, including ‘Star Wars’ franchise, coming soon to Apple’s iTunes Store? – November 08, 2006
Analyst: two major studios seen joining Apple’s iTunes Store – October 10, 2006
Report: Apple and Wal-Mart in discussions over iTunes Store alliance – September 29, 2006
Disney’s remarkable 1st week iTunes movies sales should have studios clambering aboard Apple train – September 20, 2006
Disney sells 125,000 movie downloads via Apple’s iTunes Store in first week – September 19, 2006
Apple debuts iTunes 7 – September 12, 2006

37 Comments

  1. First of all, with the advent of iTV, these numbers will only grow… If movies happen for iTunes (as did music and TV shows) then we will all be kissing Steve’s ass. (As will all motion picture studios). These numbers are a good start, as the validate the marketplace, however, it will only be after iTV that we will all see substantial revenue (from Apple stock) as a result of movies on iTunes…

  2. It has been the criticism of true music lovers for several years that given a choice between convenience/instant gratification and quality, most people will choose the former, 128kpbs downloads from iTunes for example. Sadly, it appears the same thing is happening to video.

    I have downloaded both music and videos, and absolutely love it. I will agree with others-Go Apple! However, I only download a missed episode of a TV show, or music from artists that I can’t find in a store or on the internet. I’m not faulting other people’s choice to download a couple of low quality songs rather than buy the whole, higher quality CD, but iI don’t understand at all downloading whole seasons of shows or movies ever at 320 x 240. A regular commercial DVD is at most $4-$5 more, if that, and has a nice case and in many cases extras, PLUS much higher video quality.

  3. I downloaded 1 movie just out of curiosity and was very pleased with the whole experience and quality. However, Apple will have to offer movie rentals before I even consider the “iTV”. I have no desire to fill up my hard drive with movies I will probably only watch once.

  4. Well here’s my opinion… anybody that pays a dime for a movie has money to burn! You can view or record any movie you want on TV, for free. You might wait a year or two or more but so what! If you have to ‘own’ the movie or if you have some kind of a need to watch a movie more than once, you have issues that need dealing with. So, put that in your pipe and smoke it.

  5. Jay –

    FYI the video quailty is 640 x 480 which is better then standard TV but not DVD quality.

    Some of the TV content on iTunes is not availble on DVD yet (i.e. Bones, or NCIS season 2) so downloading a whole season is a great way to get the back story or just watch past episodes of a show you may have just started watching this season. That just one of meny reason that I have downloaded from iTunes.

  6. In the little town I live in we’re lucky to have any kind of broadband at all (thanks Verizon – NOT!). The “mom and pop” ISP we have is great for most utilitarian internet needs, but for downloading movies – well. After the first 60 seconds or so, at a particular URL, the fall-back I/O rate of our service goes to less than half, still exponentially faster than dial-up, but we’re simply not getting 3-5 MB/s or more. As it is downloading the quality that’s being provided now is almost too long to make it worth it. (I do purchase quite a few tv shows.)

    On downloading movies – I’ve downloaded one (Lady Killers), the quality is acceptable in full screen mode on my wife’s 17″ iMac Core Duo. My problem with movies from iTMS is that I can’t legally burn even one copy onto a DVD that I can then watch downstairs in the living room, or on the road on my portable widescreen DVD player, or anywhere I want to. So, the part of the equation that simply does not make buying movies at iTMS worth it for me is: Cost + No Burning ≠ Satisfying end-user experience.

    And if the quality issues that some are concerned about are taken into account later on by Apple, it will only make the fact that I can’t burn one DVD of my movie purchase an even bigger slap in the face. I understand this is not Apple’s fault, but I hope they’re working hard at negotiating this ability into future agreements with the movie mogals. Until then, I want to buy movies on iTMS, but I don’t.

  7. I’m with you Jay,

    I have a season pass of “the Avatar” and love it. The quality’s just fine and the price is great compared to the DVD. My sons watch the episodes over and over (great show BTW). Well worth it.
    I was going to purchase “Cars” via iTMS but then realized that for $14.99 I could get the DVD via Amazon with free shipping and no tax! Like other DVDs I bought I will use Handbreak to transfer it to my Mac and at the end will have a great resolution movie for the same price I would have paid for a low quality version on iTMS. I can even transfer it to my iPod and PSP (I know, I’m a geek) I realize that the pricing is probably not Apple’s choice. I bet they fought for a $9.99 deal and gave up. I really don’t think I will ever purchase a full length movie at the current jacked up price unless they include all of what’s on the DVD and match the resolution as well. Hopefully when iTV comes out they will.

  8. You can view or record any movie you want on TV, for free.

    Yes, true. The device to do this is called your brain. Otherwise you have to pony up money for something that will record a little more reliably, like a DVR.

    if you have some kind of a need to watch a movie more than once, you have issues that need dealing with.

    Don’t watch any David Lynch movies, do you?

  9. Once Apple introduces movie rentals, they should be selling 500,000 PER DAY! Considering iTunes sells 2 million songs per day, there’s no reason they couldn’t achieve this number with movies…

    … And Mr. Peabody, why not just transfer “Lady Killers” to your iPod, get the a/v cable for $19 and watch it anywhere you like?

  10. DVD Movie sales in the US are a 17 billion Dollar a year business in which 60% of those sales come from Wal-Mart Alone.

    At an average selling price of $15, that breaks down to 3.1 million DVD’s sold per day in the US.

    If Apple is selling 9000 per day, that means they already have 2.9% of the total pie with Disney alone!

    No wonder Wal-Mart is scared.

  11. I stand corrected on the resolution-thank you. However, my basic point is that I am prepared to wait for the commercial DVD(s) rather than download anything other than a missed episode. Apple’s model is good but I usually want more. I’ll eat fast food if I have no other choice in dining, but I almost always do, and I prefer higher quality.

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