AFI BLOG: Media and Technology

The Los Angeles Times

Apple closed two gaps today with its announcement about downloadable movies for sale through the iTunes Store. The one it emphasized was the agreement by six major studios to pony up their films the day they were available on DVD. This was a no-brainer for Hollywood. In fact, according to a publicist for Vudu, the studios have long been providing downloads for sale through other online vendors “day and date” with DVD releases. The more interesting element here is that Apple has finally persuaded Hollywood’s largest studios to sell movies through iTunes.

When Apple started selling movies through iTunes in September 2006, only one major studio agreed to participate. That was Disney, on whose board Steve Jobs sits. Studio executives complained about the wholesale discounts Apple sought, and disparaged Apple’s approach to copy protection. Among other things, they didn’t like the fact that movie buyers could transfer copies of the film to unlimited iPods. Paramount, Lionsgate and MGM eventually provided older movies for Apple to sell, but the pickings remained slim for new releases. With today’s announcement, new and older titles from Sony, Universal, Warner Bros., 20th Century Fox, Paramount and Lionsgate are all joining Disney in making new releases available for sale. That leaves MGM, a studio that hasn’t been much of a force in new releases, as the largest holdout.

Apple eventually made some concessions to Hollywood on copy protection, although they don’t seem significant from the consumer’s perspective. And with Disney reporting that iTunes was adding to its profits, there was no reason for the rest of the studios to stay on the sidelines. Not that iTunes is printing currency for Disney; Silicon Alley Insider’s Peter Kafka called the studio’s revenue from iTunes “a rounding error.” That’s true at least in part because studios have forced Apple and other downloadable movie outlets to offer flawed a product. By not allowing shoppers to burn movies easily onto discs that can play in conventional DVD players, the studios have made it much more complicated to watch a downloaded movie on TV than it is to watch a disc.

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