Apple close to movie distribution deal with Fox - report

Posted:
in iPod + iTunes + AppleTV edited January 2014
NewsCorp's Twentieth Century Fox is close to striking a deal with Apple to offer digital copies of its major motion pictures through iTunes, according to one Wall Street analyst.



Pali Research analyst Richard Greenfield in a blog posting (activation required) on Monday said the two companies are "actively negotiating" terms of the deal, which could be announced sometime in early 2008. Apple and Fox are reportedly prolonging the engagement as not to tamper with this year's critical holiday DVD shopping season.



The proposed deal, which would end a considerable standoff between Apple and nearly all Hollywood studios over the digital sale of movies, has reportedly been helped by the iTunes operator's sudden willingness to increase the wholesale price of new flicks beyond $15.



The Cupertino-based company currently prices new releases at $12.99 when pre-ordered through iTunes during their first week of availability, and $14.99 thereafter. Older library titles sell for $9.99.



Thus far, however, Apple has only been able to court the likes of Disney to offer its entire catalog at those prices, while MGM, Paramount and independent film studio Lionsgate have agreed to just partial distribution deals.



In his posting, Greenfield refers to an emerging desire -- presumably among studios -- to sell premium priced DVDs that include a digital copy of a movie for an increased cost of $3 to $4. This, along with growing piracy concerns and the emergence of Wal-Mart's own digital download service, is likely to influence studios into finally embracing an Apple deal, he said.



"While we suspect FOX will be the first studio other than Disney to fully embrace iTunes, we believe others will quickly follow suit," the analyst wrote, explaining that the major fear for Hollywood studios is proving to Wal-Mart and other physical DVD retailers that a lower wholesale price on digital copies is warranted relative to DVDs.



He added that, "the last thing the movie industry needs is pressure on new release DVD wholesale pricing, although the studios probably make more money on an iTunes wholesale of $15-plus, than most DVDs at $18 due to returns."



It should be noted that talks between NewsCorp's Twentieth Century Fox and Apple date back over a year.
«13

Comments

  • Reply 1 of 41
    wallywally Posts: 211member
    Quote:
    Originally Posted by AppleInsider View Post


    ... has reportedly been helped by the iTunes operator's sudden willingness to increase the wholesale price of new flicks beyond $15...



    If Apple does indeed offer movies for more than $15, then their only plan is to prove to these ass-wads that no one will ever pay that much.



    I have never bought a movie from iTunes because I think paying $10 for a movie that lacks close enough quality to a dvd as well as no discrete surround tracks isn't worth it for me. Now I would definitely use iTunes for rentals (as long as they don't cost more than evil Blockbuster).



    These studios are ridiculous. $15 or more for an electronic file is robbery.
  • Reply 2 of 41
    wallywally Posts: 211member
    Quote:
    Originally Posted by AppleInsider View Post


    He added that, "the last thing the movie industry needs is pressure on new release DVD wholesale pricing



    TRANSLATED: "We don't want Wal-Mart to get butt-hurt and threaten to take all our movies off the shelf"
  • Reply 3 of 41
    bageljoeybageljoey Posts: 1,763member
    I am glad to see other studios coming on board.



    I'm still not interested at those prices, however. Maybe an occasional spur-of-the-moment thing.



    I think I would most want to rent like I do now with NetFlicks. For special titles, I like to own the DVD with its case and transportability. If the iTunes purchase price was significantly cheaper maybe--maybe I would buy from the site, but this isn't headded there...
  • Reply 4 of 41
    It would be nice to see more movies, but I can't see sales going that well with higher pricing and the same resolution.



    The only thing I can see justfiying higher prices would be quality that is full DVD or better (including surround sound). And the other features that DVD's have like bonus extras, multiple audio tracks, and closed captioning.



    Right now, a download of a movie gives you less than buying the DVD. The download SHOULD be cheaper since you're getting less.



    And what about rentals? A decently priced rental program, particularly a subscription comparable to netflix, would be very appealing.
  • Reply 5 of 41
    cory bauercory bauer Posts: 1,286member
    Who in their right mind would pay more than $15 for a VHS-quality copy of a film?
  • Reply 6 of 41
    dr_lhadr_lha Posts: 236member
    Quote:
    Originally Posted by Cory Bauer View Post


    Who in their right mind would pay more than $15 for a VHS-quality copy of a film?



    Its a lot better than VHS, but I must admit that I wonder this myself. I just can't see the value proposition of spending $15 on an iTunes movie, compared to spending $15 on a DVD. TV shows for $2 are impulse purchases and there's few other way to buy individual episodes, and iTunes albums are mostly cheaper than CDs, but Movies for $15, I just don't get it.
  • Reply 7 of 41
    mimicmimic Posts: 72member
    Quote:
    Originally Posted by Cory Bauer View Post


    Who in their right mind would pay more than $15 for a VHS-quality copy of a film?



    I agree! Yes, when they first came out a picked up a couple to see how they were. But the quality is not worth the price. Period!
  • Reply 8 of 41
    Insanity and stupidity. I would NEVER pay that price for a movie, especially with the limited quality available for iTunes. Movie/music execs keep making the same mistake over and over and over and over and over and over again. Lower the price to a reasonable level, make the interface user friendly, get rid of DRM and people will buy your product. Stick to the same outdated and hostile policies of the past at your own peril - I suspect the vast majority of the world would not buy their products at those prices. These people are fossils and the world has passed them by.
  • Reply 9 of 41
    Apple can't up the quality without making its movies incompatible with all of the iPods. So that's simply not going to happen until we see iPods that can play higher-quality movies. And quality is just not an issue for most people, anyway. That's why people aren't flocking to HD TVs and Blu-Ray/HD DVD players.



    The real issues when it comes to movies on the iTunes store are selection and the option to rent. There are simply not enough movies at the store, making it far more likely that you won't find what you're looking for than that you will. It looks like Apple is about to cave a little to the studios to solve that problem. Hopefully, Steve is adding a rental method, one that works like Netflix only without physical discs to ship back and forth, to the deal.



    I say it needs to work like Netflix because the last thing I want to see is a rental scheme based on time-bombed files that self-destruct x number of hours after you download them, or even x number of times you've played them. I've fallen asleep watching movies so many times, I'd hate to wake up the next morning and realize my rental is now gone even though I really didn't watch it. It would be far better if, like Netflix, you could watch as many times as you like, but you just can't check anything else out until you turn that one back in. Have tiered pricing for one, two, three, or five rentals at a time, and make it a recurring monthly charge. That would just about destroy the competition, including Blockbuster and Netflix, if and only if Apple manages to get the selection problem solved as well.



    It would also get Apple TV sales off the ground finally. Which would in turn help speed up HD TV sales, which would eventually lead to increased interest in Blu-Ray and HD DVD, which would then, finally, necessitate Apple upping the video quality. One step at a time.
  • Reply 10 of 41
    irelandireland Posts: 17,684member
    You can get movies on iTunes? News to me.

    TV Shows too? More news.
  • Reply 11 of 41
    They need to sell to the hardcore audience first and without good quality DVD will still remain king. I am much more likely to get an HD-DVD player then buy an iTunes movie at the price and quality. Not to mention upping the price, HA!



    They make a lot more off iTunes then DVD, no physical product, no ability to resale them (used market), no store placement needed, no licensing fees, just the cut off the top like any store takes.



    iTunes videos need to move to rentals to become successful IMO, and that is the only way I would really use it anyway. I like my highquality physical discs for keeping my favorite movies. But I don't need to own every movie I see.
  • Reply 12 of 41
    "let's sell more expensive electronic downloads. people will surely buy more this way."



    idiots.



    i'd go for digital movie rentals, no more than 5. maybe 6 bucks if it's a really kick ass movie.

    i'd go for digital movie purchases for no more than 10 bucks and with the ability to back them up to a dvd+/-r.
  • Reply 13 of 41
    The studios should absolutely have freedom to price their movies wherever they want. Sales, or the lack thereof will be the best indicator whether or not it makes sense for customers.
  • Reply 14 of 41
    Quote:
    Originally Posted by Wally View Post


    If Apple does indeed offer movies for more than $15, then their only plan is to prove to these ass-wads that no one will ever pay that much.



    I have never bought a movie from iTunes because I think paying $10 for a movie that lacks close enough quality to a dvd as well as no discrete surround tracks isn't worth it for me. Now I would definitely use iTunes for rentals (as long as they don't cost more than evil Blockbuster).



    These studios are ridiculous. $15 or more for an electronic file is robbery.



    Don't know if this is outside LA or not yet, but you guys should check out redbox.com. $1 rentals per night, just stick an ATM card into the machine and you're off. better than Netflix, imho. Limited selection right now but will hopefully grow.
  • Reply 15 of 41
    Quote:
    Originally Posted by Cory Bauer View Post


    Who in their right mind would pay more than $15 for a VHS-quality copy of a film?



    I agree. the regular price for any movie should not exceed the average price of a ticket to that movie: $10.



    Any studio that thinks folks will pay that much is smoking crack.
  • Reply 16 of 41
    How out-of-touch can Fox get? $15 for a crappy, sub-DVD quality movie without any extras, or good audio? Please.



    I've bought tons of iTunes music, and a moderate # of TV shows, but never a movie. Wake me up when Apple and the Studios start renting titles for $3-$4 a shot (including an HD encode).
  • Reply 17 of 41
    Yet again Murdoch will get his claws in...what next?!



    any one else notice how the UK adverts for the iPhone feature the device displaying The Times newspaper website (proprietor: Rupert Murdoch)?



    This kind of thing doesn't happen by accident. Money changes hands, deals are struck, free coverage given and News Corp becomes ever more powerful...



    For the record...



    News Corp =



    The Times (London)

    Fox News

    Fox

    20th Century Fox

    Harper Collins

    New York Post

    Sky TV

    numerous radio stations, Australian TV/print

    Harper Collins publishing





    ...if this continues, you won't hear a "Fair & Balanced" word said about Apple on Fox.
  • Reply 18 of 41
    jeffdmjeffdm Posts: 12,949member
    Quote:
    Originally Posted by MiMiC View Post


    I agree! Yes, when they first came out a picked up a couple to see how they were. But the quality is not worth the price. Period!



    The original round of videos for sale were close to VCD resolution. That has changed. While it's now just sub-DVD quality, it's nowhere nearly as bad as VHS quality.



    I think it's incredibly silly to think that iTunes movies can cannibalize DVD sales. Subs, alternate audio, bloopers and such are nowhere to be found on the iTunes versions. Almost no DVDs sold these days are missing those features.
  • Reply 19 of 41
    jeffdmjeffdm Posts: 12,949member
    Quote:
    Originally Posted by mrjoec123 View Post


    And quality is just not an issue for most people, anyway. That's why people aren't flocking to HD TVs and Blu-Ray/HD DVD players.



    I think HDTVs are in about a third of US households now. The costs are now quite cheap, so I expect it to continue to accelerate. What I paid five years ago for a 27" flat tube SDTV now gets a much larger HDTV.



    I think the issue with Blu-Ray/HD DVD is the format split, waiting for the price of the players to go down and hopefully settle out the format differences. The formats are doing OK for its first year, considering the split and all.
  • Reply 20 of 41
    quinneyquinney Posts: 2,526member
    Quote:
    Originally Posted by mrjoec123 View Post


    The real issues when it comes to movies on the iTunes store are selection and the option to rent. There are simply not enough movies at the store, making it far more likely that you won't find what you're looking for than that you will. It looks like Apple is about to cave a little to the studios to solve that problem. Hopefully, Steve is adding a rental method, one that works like Netflix only without physical discs to ship back and forth, to the deal.



    I say it needs to work like Netflix because the last thing I want to see is a rental scheme based on time-bombed files that self-destruct x number of hours after you download them, or even x number of times you've played them. I've fallen asleep watching movies so many times, I'd hate to wake up the next morning and realize my rental is now gone even though I really didn't watch it. It would be far better if, like Netflix, you could watch as many times as you like, but you just can't check anything else out until you turn that one back in. Have tiered pricing for one, two, three, or five rentals at a time, and make it a recurring monthly charge. That would just about destroy the competition, including Blockbuster and Netflix, if and only if Apple manages to get the selection problem solved as well.



    I notice that Netflix had a market cap of $1.65 billion today. I wonder: if Apple acquired Netflix,

    which would only use up about 10 percent of Apple's cash position, if they could obtain all the

    distribution agreements of Netflix, as well as the ability to use Netflix's rental scheme (which

    may be protected by patents), as well as Netflix customer database... would it be worth the cost???
Sign In or Register to comment.