Friday, September 01, 2006

Movies on iTunes

The rumor mills are abuzz with chatter about news that iTunes will start offering movies for download by the end of 2006, at prices ranging from $10 to $15. Apparently this has been "confirmed" by Business Week. TechCrunch says,

Apple is pushing for, and apparently getting, $14 wholesale movie prices on new releases. They plan to retail new releases for $14.99 and older movies for $9.99. Normal wholesale DVD prices are $17. Walmart pays that normal wholesale rate, and now anticipates losing a significant share of their 40% market share in the $17 billion annual DVD market. Given that it will be trivial for iTunes users to simply burn a DVD of these movie downloads, Walmart has good reason to be worried. Netflix should be nervous, too.
Being able to purchase movies online will be great - and many folks will probably go out and purchase a Mac Mini [UPDATE: new and improved Mac Mini] that they can hook up their iTunes downloads to their huge HDTV's pretty easily. And when they add HD movies, the endless debate over HD-DVD and Blu-ray will go the way of the Laserdisc. But Apple still needs to prove that people want to actually purchase (rather than rent) movies.

Music is great to sell outright because most people listen to songs over and over again. Movies are very different - with few exceptions, most people watch each movie once or twice. And while no one will argue the success of DVD-sales, it remains to be seen whether the rental business model or actual sales will prove most successful. Apple doesn't seem to like offering subscription, at least for music, but maybe they can make an exception for movies.

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