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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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Over at infinite Loop, Former TUAW heavyweight David Chartier posts that Apple will soon be paying a $15 per movie wholesale price to the...
 

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Tracy

I would love if Apple did a subscription rental service like Netflix. Then I would even consider an AppleTV. Thus far I have had no reason to want one as I don't have many movies on my computer. It would be extra-cool if you could get a discount on an AppleTV with a one-year iTunes Movie Rental contract or some such (obviously you'd want Apple to offer non-contract service for the same price).

December 06 2007 at 12:19 AM Report abuse rate up rate down Reply
Matteo

Personally I think the biggest advantage Apple could (FINALLY) create over competition is double:
- HD content
- distribution outside the US (remember, Apple is doing well also outside of the US, where competition in the domains of "rental" and "on demand" is much smaller compared to the US)

I wonder if Studios and Apple are going to wake up in this regard. The biggest market for iTunes rental and online sales is currently the one they have not addressed (ABROAD).

In France, Germany, Switzerland, etc. IPTV is only now starting to take shape, HD channels are 5 or 6, internet online rental (à là NetFlix) are still very much niche markets, there is no TiVo. Anyone ever thought, back in Cupertino, that this could actually be a chance?

I know that the biggest challenge probably lies in the exclusive distribution deals the studios themselves have closed with various distributors, but the potential is so big that maybe it is worth taking a serious look at these matters.

December 05 2007 at 3:23 AM Report abuse rate up rate down Reply
kaleidoscope

If Apple starts offering rentals I would say "to hell with it" and put off my strike for a 16GB iPhone. I wonder if Jobs has considered that if he offers rentals to Apple users, it could boost the sales of the iPhone and/or iPods? Besides the only portable player movie rental service I've seen so far is Amazon UNBOX (I think it's called), and that service is only offered to Windows users and players compatible with Windows Media Player. As of now they haven't, added Mac users. If Apple hops the rental-train now they could see a big boost.

Hmm...Perhaps movie rentals could be the big announcement on January 15? ::sigh::

December 04 2007 at 11:21 PM Report abuse rate up rate down Reply
Erik Mallinson

Maybe they are just going to get better movies? I've spent hours trying to find a hidden gem in a sea of movies I'd rather not see again.


December 04 2007 at 9:41 PM Report abuse rate up rate down Reply
trc

Me? I can't wait for iTunes movie rentals. I hate DVD's. I've got no room for them, and why waste all that extra plastic, when it's not necessary. DVDs, including HD & Bluray are a thing of the past - they get scratched and you have to keep buying the latest format, so you have to buy movies again and again, that's just plain stupid. The future is all digital all the time - part of the any-movie-at-anytime-at-the-click-of-a-button future.

December 04 2007 at 6:14 PM Report abuse rate up rate down Reply
Alex

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

December 04 2007 at 5:40 PM Report abuse rate up rate down Reply
David Chartier

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.

December 04 2007 at 4:21 PM Report abuse rate up rate down Reply
Jim

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.

December 04 2007 at 4:19 PM Report abuse rate up rate down Reply
Peteo

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

December 04 2007 at 3:41 PM Report abuse rate up rate down Reply
Stan

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.

December 04 2007 at 3:13 PM Report abuse rate up rate down Reply
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