Filed under: Apple Corporate, iTS, Video
Apple to pay higher wholesale movie price reports Ars
Over at infinite Loop, Former TUAW heavyweight David Chartier posts that Apple will soon be paying a $15 per movie wholesale price to the movie studios. David sees this as Apple caving into Hollywood after a tense face-off.
Me? I see this another way. I don't believe the movie sales over at the iTunes store have been all that hugely successful. With competition from Walmart and weak consumer interest, I think Apple is changing its direction. Instead of movie sales, I'm thinking movie rentals. We've seen evidence for this both on the Mac in the iTunes binary (thanks Evan DiBiase) and on the iPhone (thanks Pumpkin).
Rentals could do a lot for Apple's bottom line. It would re-energize the lagging Apple TV as a platform, it would expand the iPhone's reach as a portable media device, especially for travelers, and it would basically give up on iTunes-distributed buy-to-own movies as an unprofitable but fully explored avenue.
So what do you think? Evil MPAA? Weak Apple? Or a new paradigm on the horizon?
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Reader Comments (Page 1 of 2)
Zak said 12:37PM on 12-04-2007
I would absolutely love movie rentals through iTunes. In fact I would buy an Apple TV just to watch them on my big TV in the living room. I don't rent movies enough to get a membership at Blockbuster, or a subscription to Netflix, so an on-demand online movie rental service like this would suit me just perfectly.
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Colin Hoops said 12:41PM on 12-04-2007
I believe firmly that they need rentals for the video aspect of their media management to end up successful. It would also help if you could stream a physical dvd from your computer to aTV in real time, and also for aTV to portal to online content such as Joost, Vongo, ABC.com, etc, the way it does with YouTube. If purchasing a $20 movie through iTunes is the only way to conveniently access video content, I believe it will fail.
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mingistech said 12:48PM on 12-04-2007
I think the AppleTV as a movie rental devise isn't the best idea. Most cable boxes already do this and people don't need to pay for the extra hardware.
The thing that sets the AppleTV apart from the "On Demand" type of comcast crap is.... you actually own the movie.
But then again... we're all speculating on a rumor.
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Aaron Miller said 1:32PM on 12-04-2007
Have you tried renting a movie on a cable box? The selection is terrible, the interface is even worse, and once you have started it, the clock gives you 24 hours to watch it.
Imagine a rental service that has a bigger selection than the local Blockbuster, is done through a smooth, cool interface, and has reasonable usage limits during the rental period. Add HD rentals to the mix and it would kick butt over everything else. I think Apple could do this.
Jon said 12:51PM on 12-04-2007
The reason why I haven't bought any movies is because of the low quality. In a world where people aren't sure whether to buy HD-DVD or Blu-Ray, Apple could offer an HD alternative that you know you'll be able to play in 1 years' time. I'd pay for that.
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Johnny said 12:57PM on 12-04-2007
I agree. I think the poor quality of iTunes movies is why it is failing. I also think subscriptions couldn't hurt. If they give me the option to rent (or buy) movies in HD quality from iTunes, they'll be getting my money.
YodaMac said 12:53PM on 12-04-2007
Personally, I'm not that thrilled by movie rentals, but I suppose it's okay. If I really like a movie I've seen, I buy it when it comes out. If I wasn't interested enough to see it in theaters, I'm not gonna bother renting it.
Personally, I'd rather be able to buy my movies through iTunes in HD fomat, and never have to buy another DVD again.
Yes, the download times would be long(ish), but I'd still rather purchase movies that way, than buy them on DVD and have to rip them and convert them to play through iTunes on my AppleTV.
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geochick said 12:56PM on 12-04-2007
I think rentals are inevitable. Apple usually pay more to get more b/c they have something up their sleeves I bet SJ will be informing us during the next Keynote in Jan.
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Richard said 1:30PM on 12-04-2007
The "sharing", and I use that term loosely, is directly proportional to the average download and upload speeds of the users. If the movie studios have not heard, download and upload speeds are coming to the point where a good H.264 encode of a movie can be pulled in 10 - 15 minutes, where once it took hours. In the next few years, with the increases in speed, this will become 3 - 5 minutes.
The direction of the marketplace is to make the “sharing” of movies easier, so they need to compete with this by lowering prices, not raising them. Oh well, its their BBQ, let them roast.
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Jeff said 1:12PM on 12-04-2007
When I was a single dude I would watch every feature and every audio commentary on a DVD. Today, married and a new baby, I don't have time (nor patience from my wife to watch commentaries) and end up watching the movie only from Netflix.
$15 a movie sucks UNLESS it's HD. I'd pay $15 for 720p version of a movie I get to keep forever.
I am hesitant on rentals. HD should really be iTunes new deal (perhaps initially in movies, then into TV).
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Greg said 1:28PM on 12-04-2007
I think this is crap. I mean, I'd rather stick to physical copies than have to deal with unique and mutable licenses. Do they think the public really wants their red tape?
Boo on rentals, boo on DRM, boo on not being able to legally convert your DVDs to digital video files for personal use, boo on low resolution movies, boo on increased prices.
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Marc Mitchell said 1:33PM on 12-04-2007
what i want.. is to get up Christmas day 2008, pay for / rent / start downloading the new star trek movie from itunes.
all it will take is for 1 BIG new film to utilise an itunes exclusive pre release & the ball will be rolling.. like pixar WAll-E maybe ?
frankly , itunes is in the right place to replace the pirate services but until it starts dealing with new release / current movies the scales are never going to move.
If i had the choice between paying itunes £10 to watch / rent a new movie in my home or some cam-pot pirate recording ill choose itunes any day, just dont ask me to go to the cinema...
there should also be a HD choice too.. currently itunes movies & apple tv only use 2 channel pro logic audio not full 5.1...
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Luigi193 said 1:37PM on 12-04-2007
Any support for the apple TV would be great!!
How bout a firmware update Apple?
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Jeremy said 2:07PM on 12-04-2007
Rental is fine for folks that like that kind of thing, but it won't work if it's 15 bucks. I am not sure what the 15 dollar wholesale price is going to amount to on the consumer end, but if you are not getting the actual movie (hard copy), there is no way they are worth anything more than a few dollars.
It also seems to me that this will get really complicated pricing wise, because even if rentals are five dollars, then that's way too cheap for a first run exclusive and way too expensive for an old 70's movie from the back catalogue.
Considering every movie ever pressed onto a DVD can be found *somewhere* for less than ten bucks, it's hard to argue that the extra convenience, coupled with the lower quality, and the fact that it disappears after so many viewings, should equate to anything higher than that.
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naptownman said 3:01PM on 12-04-2007
The people who produce the content see people spending $100 or more per month for cable tv to get the few channels we actually like and want to watch. They don't think anything about putting a $15 value on a one-time use movie. We all have very deep pockets, don't 'ya know! The only reason box office sales are going up each year is because the ticket prices are rising three times as fast as inflation. Everyone in the content production ad delivery process is way overpaid. In order to support their house of cards they have to take it from us. I haven't been to a theater, bought or rented a movie in 3 years. So far, I haven't missed it.
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Stan said 3:16PM on 12-04-2007
Hollywood execs are IDIOTS; I should know since I worked at a top talent agency a few years back. They should be lowering prices and making things simple, not raising prices and introducing convoluted rental schemes. Make all movies for sale on iTunes for $5. These fools should realize that's pure money for them if they can get a pirate off of Azureus and onto iTunes. Plus, they should remember there is the added inconvenience of buying a blank DVD and burning a movie on to it to view it on a TV. $5 is a fair price for all. I think the suits have no idea how easy it is to go onto a torrent site and grab a movie in 15 mins.
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Peteo said 3:42PM on 12-04-2007
ATV is cool and all but why would I buy it when I have an xbox 360 that I can rent HD movies from allready?
unless apple has more favorable rental terms, (like i can put it on my iphone) or maybe a subscription service like vongo then I dont think ill jump
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Techslacker said 4:20PM on 12-04-2007
If this is true along with certain other rumors and mix in a little common sense and it would seem that rental and high-def is on the way. If Apple can get the rental idea right, they might be able to get the cost of AppleTV down by quite a bit or maybe even free if they can offer a subscription service.
To be honest while I've never liked the idea of rental for music, rental for tv shows and movies is where rental makes sense. An option to buy would be nice but not necessary.
If it wasn't for the press, a few fanboy analysts, and certain other companies pushing the video side, I don't think Apple would have entered the market when they did. The market really wasn't there. It's still not really there but while it goes a bit against the grain for Apple this is really a case where Apple needs to be one of the first in the game if nothing else to just keep their name meaningful as a player. Jobs doesn't have quite the pull that many would have you believe when it comes to the tv/movie industry.
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David Chartier said 4:21PM on 12-04-2007
While I agree that it sounds (and looks) reasonable that iTunes Store movie rentals are on their way (and have covered y'all at Infinite Loop saying as much), you still can't ignore the massive constituency of users out there who still prefer to purchase, own and keep movies. One only needs to look at overall DVD sales to see that.
The point of this post, according to the original information Billboard reported, is that Apple has tried to keep the average movie price (at least the wholesale price) at or around $9.99 in the same way it's remained solid on selling songs for $0.99. Most of the movie studios haven't hopped on because some want even stronger DRM and—more importantly—the ability to charge higher prices that get closer to the same prices on store-bought DVDs. Billboard's report also stated that pressure for higher iTunes Store movie prices is also coming from Wal-Mart, who's been threatening to drop the sales of DVDs—for which it claims 22 percent of the worldwide market—from its retail stores.
So yea, iTunes Store movie rentals will probably do very well if they ever appear, and they'll likely help bring more users and studios into the iTunes economy. But purchasing movies to own isn't going anywhere, and the struggle over wholesale and retail prices was at the center of Billboard's report.
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Alex said 5:41PM on 12-04-2007
I think your wrong! Haha. Actually I think what they are saying is true, I think selling at a higher price is the next step in order to gain more movie studios on board. I think apple really wants to do rentals - personally i dont do anything but rentals!!!, and I agree I think as a result movie sales haven't been successful on iTunes - but it seems like the movie studios have Apple over a barrel. I think Apple is trying to just get them aboard first, because I think Apple really wants to do rentals, I don't think the movie studios would give that a chance in hell right now, for better or worse! (itd be better if they did...lol).
I would really like to see HD movies though. Seriously, the debate beteen bluray and hddvd is pissing me off, i will only rent blurays not buy them until something settles down, if ever. Apple has a great oppurtunity here, but the movie studios are ruining it for them. Could you imagine 1080p downloads? or rentals, ohhhh mannnnnn
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