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Can Hollywood Handle iTunes and Steve Jobs?

Posted on Tuesday, June 20th, 2006 and updated on Tuesday, June 20th, 2006 12:34 PM

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Steve Jobs wants to do to movies what he's already done to music and TV shows with his popular iTunes service, but the studios are nervous about being manhandled in the same way that the music studios have been. His approach and selling strategy are their greatest concerns. Variety published a story on Sunday that outlined some of the challenges that lay ahead:
Studios have resisted Jobs' initial insistence that feature films be priced at the easy-to-remember $9.99. After all, library titles are typically sold to Wal-Mart and Best Buy significantly cheaper than new releases. Studios now are trying to convince Apple to sell similar content at multiple price points, something the company has never done. Also complicating the deals: The studios are working out terms with a host of other distributors, including Amazon, Movielink and BitTorrent, in part to make sure that one company does not dominate. It seems that none of the studios wants to be first in making a deal with Apple.
If movies sold online are going to offer less value than those sold on DVD, they should cost less than they do on DVD. So, for new releases, I think that $9.99 for a downloadable version of Syriana would be the right price point, as long as they increase the resolution to something greater than the current iPod resolution of 320x240 (standard DVD resolution is 720x480, 4.5x greater). At 320x240, I wouldn't buy it no matter what the price, and I probably wouldn't even watch it if it were free. Would I pay $9.99 for Doc Hollywood, or some other catalog title that has been out for years? No. And I think that's where the studios have it right. There's no sense in offering catalog titles if every title is going to have the same price and that price is higher than is reasonable for the title in question. Going to a $1.99 price point seems about right, which is what they price TV shows and music videos at now. Now, let's take it a step further and look at the fact that Apple's Quicktime site does offer movie trailers in HD (we link to them extensively in our Trailers & Videos pages). Curiously, iTunes Music Store does not offer HD versions of the movie trailers via its interface, even when such versions exist. This is most likely due to the fact that iTunes is all about the iPod, and the iPod's video is, ahem, so not HD. If you take a sip of the kool-aid served by some pundits, you'll see the possibilities if Apple were to broaden iTunes' focus from just the iPod to the Mac Mini, and you have a platform that could deliver high-definition movies via the Internet to a playback device that rivals the price of HD-DVD players. Now, sell the HD versions of the movies for $19.99 (gotta love that "*.99" marketing approach) and you've got a system that does for movies what iPod did for music. If Apple offered this, I'd probably buy my first Mac! For the complete article from Variety, click the Read link.

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