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Wednesday, December 10, 2008, 10:00 am PT (01:00 pm ET)

TV deals causing movies to disappear from iTunes Store

Exclusive deals between Hollywood studios and the networks that secure the rights to broadcast their feature films on TV are the reason iTunes shoppers are seeing movies disappear from the service in bunches, according to a new report.

In recent weeks, users of both the iTunes and Netflix digital download services have noticed an increasing number of titles either vanish from the services without explanation or turn up as being marked for removal.

For example, one user reported bookmarking 15 movies for later viewing on iTunes, but when he returned to his bookmark list later on, he noticed that 9 of those flicks were no longer available for purchase or rental. There was also no sign of them anywhere on the store.

For the most part, the releases were fairly new titles, such as Atonement, Charlie Wilson’s War, Eastern Promises, and Michael Clayton. Essentially, they're movies that were released in theaters last year, have since made their way to DVD, and are now in line to turn up on pay-per-view and premium television stations.

What's happening, CNet News.com explains in a new report, is that Apple and Netflix are being affected by "release windows," an industry term used to describe a period of time in which the television networks (or other media outlets) purchase the rights to air these movies to their viewers as exclusive network premiers.

"Normally, release windows don't affect retailers or video-rental services after they've begun selling or renting films," the report notes. "Warner Bros. doesn't go into Best Buy and pull DVDs off the shelf when Comcast airs Casablanca. The corner Mom and Pop video store doesn't surrender copies of Gladiator to Universal Studios when the film appears on ABC."

But for whatever reason, Internet movie stores aren't being treated the same as their brick-and-mortar counterparts. They're instead seen by Hollywood as competitors to television networks and are therefor being treated as entertainment companies. The reason? Money.

According to News.com, a huge chunk of the revenues that studios make off their films come after their theater release, in the form of licensing royalties paid by premium cable and pay-per-view channels to air the titles to their viewers.

"If they say they don't want Apple, Netflix or any other Internet retailer selling or renting films inside their window then that's the way it is," two high-level studio execs reportedly told the publication.

And that's the reason why iTunes shoppers are seeing movies pop in and out of the service without explanation.