iTunes feature film service by year's end?
A version of Apple Computer's iTunes Music Store that will serve up feature film downloads should debut by the end of the year at the latest, sources within the film industry told Variety.com.
The report, which offers very little new information on the Apple initiative, reiterates the popular consensus that the iPod maker and major picture studios are locked in debate over pricing.
Apple chief executive Steve Jobs is reported to have been involved in the talks, initially proposing to sell 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 told Variety.
Apple has historically charged a standard fee for its online downloads, such as 99 cents for music tracks and $1.99 for TV shows.
According to the report, there are signs Apple may bend and allow price points ranging from $9.99 to $19.99 in order to differentiate older titles from new releases.
Nevertheless, the report states that sources within the film industry expect "an iTunes movie store to debut by the end of the year at the latest."
"Every studio wants to have broad distribution in digital, and we all know that having Apple as part of that is very, very important," a studio exec said.
Analysts also believe it is only a matter of time before Apple introduces film downloads through its iTunes service. However, Gene Munster, an analyst for PiperJaffray, says the company doesn't see the rush.
"Ultimately, we expect that iTunes will offer feature length movies on iTunes, but we do not believe this is a top priority for the company at this time," Munster recently told clients. He notes that consumers can easily find any movie they want on DVD or on-demand.
"Apple has focused on TV shows because unlike full length movies, there is a clear value proposition to the consumer and the networks in offering TV shows," the analyst said. "For a consumer, if you miss an episode (or entire season) of a show, iTunes is the only way to see it unless you want to wait until the episode comes out on DVD. The benefit to the networks is that this is a new way to monetize original TV content."
The report, which offers very little new information on the Apple initiative, reiterates the popular consensus that the iPod maker and major picture studios are locked in debate over pricing.
Apple chief executive Steve Jobs is reported to have been involved in the talks, initially proposing to sell 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 told Variety.
Apple has historically charged a standard fee for its online downloads, such as 99 cents for music tracks and $1.99 for TV shows.
According to the report, there are signs Apple may bend and allow price points ranging from $9.99 to $19.99 in order to differentiate older titles from new releases.
Nevertheless, the report states that sources within the film industry expect "an iTunes movie store to debut by the end of the year at the latest."
"Every studio wants to have broad distribution in digital, and we all know that having Apple as part of that is very, very important," a studio exec said.
Analysts also believe it is only a matter of time before Apple introduces film downloads through its iTunes service. However, Gene Munster, an analyst for PiperJaffray, says the company doesn't see the rush.
"Ultimately, we expect that iTunes will offer feature length movies on iTunes, but we do not believe this is a top priority for the company at this time," Munster recently told clients. He notes that consumers can easily find any movie they want on DVD or on-demand.
"Apple has focused on TV shows because unlike full length movies, there is a clear value proposition to the consumer and the networks in offering TV shows," the analyst said. "For a consumer, if you miss an episode (or entire season) of a show, iTunes is the only way to see it unless you want to wait until the episode comes out on DVD. The benefit to the networks is that this is a new way to monetize original TV content."
Comments
While I might end up using the service now and then I'll still be hitting the bargain bins and used DVD stores for reasonably priced movies - mainly because I tend to stock up on a few before heading out on a business trip.
Originally posted by kenaustus
The movie studios are thinking too much about new releases and not enough about their old library. Someone who might go for "Casablanca" (or any other older movie) at a good price isn't going to pay even $9.99 - not when it shoes up in the bargain bins at $5.99.
I agree - flex prices may be in order, given that movies cost more than CD's (on average), but everyone knows those oldies aren't worth that much. I'll bet Steve will bend on this one.
This is a really obvious prediction, but I'm seeing "next-gen iPod" (the REAL iPod video) this fall...
8)
Anybody want to guess at possible screen size??
Originally posted by kenaustus
The movie studios are thinking too much about new releases and not enough about their old library. Someone who might go for "Casablanca" (or any other older movie) at a good price isn't going to pay even $9.99 - not when it shoes up in the bargain bins at $5.99.
While I might end up using the service now and then I'll still be hitting the bargain bins and used DVD stores for reasonably priced movies - mainly because I tend to stock up on a few before heading out on a business trip.
Sorry, I'm not normally this picky, but here goes.
The studios love the old hits like Casablanca because they can sell the "special edition" DVD set with commentary by roger ebert for like $29.99 and it sells. Very rarely will you see such famous old films in bargain bins due to the "special edition" DVD sets.
You're much more likely to find steven segal, b-list movies that no one was interested in even when they first came out in bargain bins.
They could give you a version for your iPod, and when you're watching it you could be also downloading the High Def version. (they need to give you two versions for that price)
If they are not at the least in Dvd quality, I wont ever buy one!!!
There is not such thing as one monolithic DVD quality.
You are really saying you would like the least compression possible for a given movie length on a 720x480 screen that can fit on 9 GB's of space.
I won't be buying feature length movies from iTunes. Seeing as how no movie download service is doing well Apple should wait at least until bandwidth increases.
Originally posted by TenoBell
There is not such thing as one monolithic DVD quality.
You know what I mean.
There are too many elements that don't work and its a business model that won't work very well.
Perhaps wait for a time when more parts of it may work easier and better.
It's the wrong time at the wrong price. Rentals and/or subscriptions are a better way to go for movies in my (and many other peoples) opinion. Jobs said himself that you do not watch movies more than a few times.
Blu-Ray and HD-DVD are finally being introduced which means 1080i and 1080p resolutions. Plus Wi-Max, Higher speed Broadband as Standard (8mbps+) Mobile Broadband services (1mbps) and WUSB are almost here which means we can stream content pretty much anywhere.
From what is being reported (they might not be accurate but that's the only basis we have right now), it sounds like this idea is 10 steps backwards.
We need 'real' innovation. HD Videos, streamed around your home and on the move using a new iPod Video. NOT Lower than DVD quality DRM'd videos at $9.99 each!!!
One option that I might consider would be to purchase the rights to stream a movie from the iTunes movie database to watch on my HDTV. Apple would build a database of the movies I've purchased, and that would enable me to stream and view them, without having to worry about long-term retention at my end. Then, I'd only need the hard disk space for the streaming buffer to view them. You still have the bandwidth issue, but the consumer can now purchase a movie from Apple, leave it on the Apple servers, and view it at their leisure, without having any of the user maintenance concerns I see above. Then, Apple incurs the obligation to maintain a streaming infrastructure online to feed millions of streams to households as users watch those movies at home.
You can always burn your purchased music to a CD and keep it no matter what. If you lose your account, if iTunes goes under in 10 years, if you trash your hard drive, you still have that music on CD (granted at lower-than-CD quality).
It would be nice if you could put your downloaded content onto a DVD and watch it on your TV, just like you can burn your music to CD. Perhaps Apple could just include the same copy protection - macrovision, whatever - in the files you download, and then iTunes would have the capability of burning a copy-protected DVD, just like commercial DVDs are copy protected. Maybe you could only burn it 5 times or something.
The movie studios make upwards of 5-10x profit on DVD sales than rentals - in otherwords, when people OWN their movies. In fact, they only make about 2-5x profit on the box office compared to rentals. Jobs has the right idea to focus on ownership to reach the largest profits. Rentals would get people using the service, but nobody would be making money. The movie studios are trying to protect their largest profit-making method, but they also know that DVD sales are beginning to decrease and they cannot milk the special editions much longer.
Rentals will always be around (in store or online) but they scrape the bottom of the profit bowl and are not seen as a way to move forward with technology + profits. The next big profits will come from an ownership method. Maybe iTunes, maybe blu-ray discs. Hopefully Jobs harnesses both.
I also understand that iPod Video is where the video action is going to take place. But I think people want to stream/watch this content around multiple rooms/locations and devices. You shouldn't have to buy one version for high quality home viewing and another version for mobile viewing. It's just opening up another market to monetize the same content. Maybe I'm being a little over-ambitious but I dont want to purchase multiple versions at different quality rates etc. I want a solution that works similar to Mobile DVD players that allow you to watch anything from your home libray whilst you are on the move.
(Pulls hair out)
I think what i'm trying to say is.... If the videos are intended for iPod viewing only; they should be cheaper. If they are intended for multi-purpose viewing/streaming they should up the quality and add features such as Artwork and Extras and charge the $9.99/DVD Prices.
Either way my only wish is that Apple split the video store away from iTunes to a separate "iVideos" app or whatever, because I find the iTunes interface inefficient and buggy when dealing with video files. Frankly, I find Windows Media Player's approach more usable (gasp!) for video files - a relatively small playlist on the side and the rest of the window used to play the video. I'd like to watch what I'm playing without the player launching a separate window (which after you close it does not stop the video from playing) or playing in a tiny corner of the screen. Full screen is an option of course, but iTunes doesn't offer the lovely on-screen controls that QuickTime 7 (Pro) does.
Oh well...