Apple fighting movie studios to keep 4K films priced at $20 on iTunes

AppleInsider

Ahead of the anticipated launch of a new Apple TV with support for ultra-high resolution 4K video content, Apple is said to be caught in a contract dispute with movie studios, who want to see iTunes prices for 4K films exceed $20.

Apple typically charges around $19.99 for new high-definition movie releases, available in up to a 1080p resolution. But for the jump to 4K, studios want to see Apple charge $5 to $10 more, bringing prices potentially as high as $30 for new releases, according to The Wall Street Journal.

The ongoing negotiations are likely in the midst of crunch time, as Apple is gearing up for a Sept. 12 event where the company is expected to announce a new Apple TV with 4K and HDR, as well as an "iPhone 8" and "iPhone 7s" lineup, and new Apple Watch with LTE connectivity.

On the technical side, Apple has been gearing up to begin providing 4K content through iTunes. But what it will charge for that content remains a mystery.

Not all studios are pushing for higher prices, however. While one executive who spoke with the Journal said they wouldn't tell Apple how to price their iPad lineup, a separate unnamed studio representative noted that Netflix subscribers already receive streaming 4K content for $12 per month, making a $30 movie purchase on iTunes a tough sell.

Earlier this month, lines of code discovered in Apple's HomePod firmware revealed the tech giant is working on a next-generation Apple TV that boasts support for 4K video and HDR in both 10-bit and Dolby Vision formats. The information fell in line with a February rumor claiming the hardware refresh carries the codename "J105," a designation most recently seen in the seventh iOS 11 beta release.

dipdog3

People still buy movies?

smaffei

This move by Apple makes sense. Sales of movies on iTunes have been declining quarter after quarter for a while now. This would be a great way to spur on sales.

In fact, if I were Apple, I would start offering free iTunes credits for trade-ins of competing devices with the purchase of a 4K Apple TV.

gatorguy

This is a two-headed coin. While paying less for media content is nice for consumers (and Apple will profit more if iTunes is the go-to for movies) it may discourage content creators investment in quality films and music. It's already tough for music performers and writers to make a living from streaming songs, and studios may suffer from ever-cheaper movie streaming as well with big-budget productions making less and less financial sense, especially as theater visits are declining.

The problem they will have is with Apple having a least a two-prong approach to forcing their way, reduce old-line studios and production houses profits by demanding lower prices while trumpeting the benefit to consumers (!),  and at the same time using some of the Apple $B's to start their own shows and movies to compete with and replace them. IMO bending now would seem to play into Apple's plans to be the major force in video too just as they were in music. 

Avieshek

Once an art has become a business no disgusting than politics. 

spanish-archer

I was hoping that Apple would reveal an Apple Movies subscription model like Apple Music at the forthcoming event when the 4K ATV is released.

Do consumers really want to own movies anymore?

Surely music subscription services like Spotify and Apple Music have reduced the amount of music piracy significantly because the subscription is reasonably priced.

The same model for movies would surely help reduce movie piracy.

jay3000

dipdog3 said:

People still buy movies?

Yes! Digital, people are buying less DVDs

mattrogers_2

gatorguy said:

This is a two-headed coin. While paying less for media content is nice for consumers (and Apple will profit more if iTunes is the go-to for movies) it may discourage content creators investment in quality films and music. It's already tough for music performers and writers to make a living from streaming songs, and studios may suffer from ever-cheaper movie streaming as well with big-budget productions making less and less financial sense, especially as theater visits are declining.

The problem they will have is with Apple having a least a two-prong approach to forcing their way, reduce old-line studios and production houses profits by demanding lower prices while trumpeting the benefit to consumers (!),  and at the same time using some of the Apple $B's to start their own shows and movies to compete with and replace them. IMO bending now would seem to play into Apple's plans to be the major force in video too just as they were in music. 

You're kidding. Right? Have you seen the sort of bank the studios make on tentpole films?

spanish-archer

Something like that would cost a fortune.

Probably $50 a month. This is assuming this movie subscription has all the new releases.

What is the incentive for consumers to stop pirating films for $0 ?

A smaller amount paid by subscribers is far more profitable than charging a larger amount to few subscribers.

How come Apple Music has all the music releases (well I've not found any music I want to listen to that isn't on Apple Music) and movie releases would be fragmented?

tokyojimu

spanish-archer said:

Surely music subscription services like Spotify and Apple Music have reduced the amount of music piracy significantly because the subscription is reasonably priced.

Probably. But most musicians I know are making a lot less money than a few years ago, as streaming royalties add up to pennies, where in the past they sold lots of CDs at $15 a pop. 

Soli

spanish-archer said:

I was hoping that Apple would reveal an Apple Movies subscription model like Apple Music at the forthcoming event when the 4K ATV is released.

Do consumers really want to own movies anymore?

Surely music subscription services like Spotify and Apple Music have reduced the amount of music piracy significantly because the subscription is reasonably priced.

The same model for movies would surely help reduce movie piracy.

If Netflix can only make this work with older titles then I wouldn't expect that same all-you-can-eat model from Apple as their content mostly follows the disc releases of TV shows and movie titles.

There's likely a price where this becomes feasible for the content owner, but is that price feasible for the customer? Would $50 per month satisfy content owners? How would that be broken up? I don't think I'd pay that much unless downloads were still possible and I'd use it on the rare occasion where I planned ahead for some occurrence that kept me from having access to streaming content for awhile. I recently purchased MoviePass which is only $10 per month, but there are restrictions that I don't think are possible for streaming content.

liquidsky617

dipdog3 said:

People still buy movies?

I still buy blu-rays on the cheap after initial demand fades.
Or (for tv) when they're repackaged as a set vs individual seasons and demand drops.
Rip them for Kodi or Plex, and stash them away.
Don't care for streaming vs playing locally.
I'm probably old school.

dachar

sog35 said:

gatorguy said:

This is a two-headed coin. While paying less for media content is nice for consumers (and Apple will profit more if iTunes is the go-to for movies) it may discourage content creators investment in quality films and music. It's already tough for music performers and writers to make a living from streaming songs, and studios may suffer from ever-cheaper movie streaming as well with big-budget productions making less and less financial sense, especially as theater visits are declining.

The problem they will have is with Apple having a least a two-prong approach to forcing their way, reduce old-line studios and production houses profits by demanding lower prices while trumpeting the benefit to consumers (!),  and at the same time using some of the Apple $B's to start their own shows and movies to compete with and replace them. IMO bending now would seem to play into Apple's plans to be the major force in video too just as they were in music. 

Big Budget does not equal great movie.

Some of my favorite movies have been small/middle budget.

this is more about Studio greed.  

If the studio's focused more on great stories and less on star power and sequels, the industry would be on much stronger footing.

How many film downloads are HD and how many SD? It will be down to the consumers to choose which video size and price. If the price is too higher then there will be few purchases of 4K.  

I usually purchase SD videos as to my eyes they don't look much if any different to HD on an iPad or TV screen. A small file size is quicker to download to an iPad for later viewing. Also SD tends to be cheaper. Would l pay 3 times the price for 4K  which probably is too big to download to my iPad or choose 3 SD films for the same price? Probably l will stick with the cheaper SD. 

MacPro

It seems to me the logical approach given all professional creators will already have switched to 4K for future proofing,  is to retain the same price for 4K and lower the price of HD.  This will eventually happen just as SD was reduced in price in the face of HD so why not start now and encourage the adoption of 4K..  

supadav03

spanish-archer said:

I was hoping that Apple would reveal an Apple Movies subscription model like Apple Music at the forthcoming event when the 4K ATV is released.

Do consumers really want to own movies anymore?

Surely music subscription services like Spotify and Apple Music have reduced the amount of music piracy significantly because the subscription is reasonably priced.

The same model for movies would surely help reduce movie piracy.

Yes, believe or or not, people do like to own moviesz I only purchases movies. Never rent or watch on Amazon/Netflix. Usually but from iTunes or physical copies if it includes iTunes as a option for the bundled digital copy. 

brucemc

dipdog3 said:

People still buy movies?

Anybody with kids will likely say "yes".  If that content will get numerous plays, it is clearly cheaper to purchase rather than rent.  Streaming services are very hit & miss for movie content.

[Deleted User]

gatorguy said:

This is a two-headed coin. While paying less for media content is nice for consumers (and Apple will profit more if iTunes is the go-to for movies) it may discourage content creators investment in quality films and music. It's already tough for music performers and writers to make a living from streaming songs, and studios may suffer from ever-cheaper movie streaming as well with big-budget productions making less and less financial sense, especially as theater visits are declining. . 

you could also say the studios pay the top actors and top music artists too much - I personally think that is where the outgoings should be cut in these industries to maintain profit, not by fleecing the average joe earning minimum wage. same goes for most sports.

Soli

Will Apple keep SD/480p(?), 720p, 1080p, and 4k/2160p? To me, that kills the good-better-best model. I could see either 480p or 720p going away, depending on what their current popularity is with customers.

Additionally, will Apple provide HEVC/H.265 for any other tier besides 4K? Will the 4K tier also get H.264 content as an option?

MacPro said:

It seems to me the logical approach given all professional creators will already have switched to 4K for future proofing,  is to retain the same price for 4K and lower the price of HD.  This will eventually happen just as SD was reduced in price in the face of HD so why not start now and encourage the adoption of 4K..  

Content owners may not like that. You can look at not only the history of HD content, but content in general to see how content owners can be a huge pain the ass to distributors right back to VHS tapes and video rentals.

wigby

gatorguy said:

This is a two-headed coin. While paying less for media content is nice for consumers (and Apple will profit more if iTunes is the go-to for movies) it may discourage content creators investment in quality films and music. It's already tough for music performers and writers to make a living from streaming songs, and studios may suffer from ever-cheaper movie streaming as well with big-budget productions making less and less financial sense, especially as theater visits are declining.

The problem they will have is with Apple having a least a two-prong approach to forcing their way, reduce old-line studios and production houses profits by demanding lower prices while trumpeting the benefit to consumers (!),  and at the same time using some of the Apple $B's to start their own shows and movies to compete with and replace them. IMO bending now would seem to play into Apple's plans to be the major force in video too just as they were in music. 

You're describing exactly what most movie fans want - the scaling down of big budget blockbusters in favor of smaller stories. Even fans of the big budget movies want this, they just don't realize it. When you pack too many big movies in one summer, no one can see them all and everyone gets blockbuster fatigue.

wigby

MacPro said:

It seems to me the logical approach given all professional creators will already have switched to 4K for future proofing,  is to retain the same price for 4K and lower the price of HD.  This will eventually happen just as SD was reduced in price in the face of HD so why not start now and encourage the adoption of 4K..  

That is the most logical however, there is nothing logical about an impulse purchase that someone makes because they just got their brand new 4k big screen TV. The studios and Apple are banking on this overlap period of a few years until the market is saturated with enough 4K TVs and appliances. Then the prices will adjust to their logical end.

retrogusto

Apple needs to make the movie industry understand what Steve made the music industry understand years ago: the price needs to reflect the reality that the competition is free (pirated). It's basically an example of the fact that if you're not willing to disrupt your business model as the world changes, someone else will. 

As fewer and and fewer people "buy" movies, studios will have less incentive to refuse to license streaming rights to their newer and more popular titles, and they will probably just sell to the highest bidder. If we end up with fewer mediocre big-budget movies about superheroes saving the world from destruction, so be it. 

I think the the music streaming model seems to be working out pretty well, all things considered. My friends who were making a living with music pre-streaming are still doing every bit as well, but like most recording artists, album sales were always a small part of their income--it's mostly live shows and licensing. And streaming services are probably at least as good as the average record store for helping lesser-known musicians to become recognized.

It's different for movies of course, but as streaming services grow, there will be more money to go around. If studios have to take a chance on an undiscovered talent rather than paying millions to an established star, that won't be so bad. And I'm with Sog on this one--if you have a good story, you don't need a ton of CGI.