Monday, January 7,2008 @ 8:35am
Apple compromising for iTunes rentals?
Apple is close to scoring deals with most Hollywood studios but may have had to make significant concessions to get a large catalog of titles for an anticipated launch at Macworld San Francisco, sources have told BusinessWeek. While the movie houses have reportedly dropped attempts to protect DVD sales by insisting on month-long delays between physical and digital releases, Apple has had to raise the prices of new-release features at or near the $17 mark common for many DVDs to receive broader support. Which companies have asked for the tradeoff is unclear, though negotiations are purportedly close to extend or add movie sales and rentals from Lionsgate, Paramount, and Warner in addition to Disney and Fox.
Some of these deals may not be announced at the Macworld keynote due to only partially-settled terms for some of these studios. Others such as Sony are considering the possiblity, though NBC-Universal's continued dispute over TV shows is reportedly precluding Universal Studios movies from showing through the online service. The information points to rentals reaching a relatively fixed price of $4 each for 24 hours.
Much of Apple's impetus is believed to rest in reinvigorating the Apple TV, which is widely known to have undersold since its launch in February due in large part to a lack of suitable content from the iTunes Store. Reports from various media sources have suggested that Apple may switch on the ability to buy or rent movies directly from the Apple TV and therefore eliminate a common complaint about the lack of direct downloads on the media hub.
Movie studio support as a whole is also considered important but may initially prove secondary. Wal-Mart shut down movie sales last month citing poor sales despite being the only digital movie provider to negotiate deals with all major movie studios, though the failure has been informally attributed to Wal-Mart's willingness to abide by strict copy protection rules and to elevate prices to guard its DVD business.