Monday, January 07, 2008, 06:00 am PT (09:00 am ET)
Warner Bros, Paramount join iTunes movie rental discussionsApple is closing in on agreements with almost all of the major motion picture studios for an iTunes movie rental service that will serve up 24-hour rentals for $3.99 a pop, according to a published report.
Citing sources, BusinessWeek reports that of the more prominent studios, only Universal — whose parent company NBC previously yanked its TV shows from iTunes over a pricing dispute — is not currently discussing a movie deal with Apple.
Specifically, Apple is said to be nearing agreements with Warner Bros., Paramount Pictures, and Lionsgate to allow movie sales, rentals, or both through its iTunes digital download service.
The Cupertino-based electronics maker is already reported to have sewn up a similar deal with Twentieth Century Fox for both rentals and sales, which is expected to be announced at next week's Macworld Expo in San Francisco.
Thus far, Apple has faced difficulties translating its success in the digital music business over to film downloads, as Hollywood studios have proven less willing to conform to chief executive Steve Jobs' demand for uniform and low-cost pricing structures. Its Apple TV set-top-box, which serves to stream iTunes movie content to big-screen TVs, has routinely been characterized as a dud by pundits and industry watchers.
Through iTunes, Apple currently offers Disney's movie catalog for sale at prices ranging from $9.99 for library titles to $14.99 for new releases. Other studios, however, have so far balked at deals that would see their own catalogs made available under a similar arrangement.
So what's courted many of the majors out of their standoff with the iTunes operator and back to the bargaining table? Neither the studios nor Apple are talking, but BusinessWeek suggests concessions have been made on the part of Jobs to pay closer to the $17 wholesale price the studios get from "physical" DVD sales by Wal-Mart and other big-box retailers.
For movie sales, it's unclear whether Apple will eat the cost of the higher-priced downloads in order to boost sales of its fledgeling Apple TV device, or pass those costs on to the consumer by raising the sale price of some of the movies it will offer through iTunes.
On the rental front, it's unknown how much studios are demanding for each movie rental, though reports have stated that Twentieth Century Fox has agreed to a deal that will see Apple charge $3.99 for rentals that will expire 24-hours after they've been purchased.
Warner Bros. and Paramount are reportedly mulling agreements that would see their movie catalogs made available on iTunes for both sale and rental through a similar set of arrangements, and Sony is also said to be interest. However, one ongoing source of contention between Apple and the studios is said to be Hollywood's practice of requiring a 30-day grace period between the time new films make their debut on physical DVD and when they are released for electronic distribution.
BusinessWeek says Jobs wants new movies available for download "day and date" with DVD releases so that iPod users can rent them the same day the DVDs become available at Blockbuster, Wal-Mart, and other rental venues.
Fox appears to have backed down from that 30-day requirement, but other studios are still studying the issue, according to the publication. These include Warner Bros., which is said to be "contemplating" the demands, and Disney which has surprisingly declined.
It remains unclear whether studios other than Fox will have inked formal agreements with Apple ahead of next week's Macworld Expo.
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