Apple is reportedly not only busy renewing some of its computer and Ipod models this year, but is close to launch another extension of its Itunes digital media store. According to a report published by Variety.com, “studio sources expect an iTunes movie store to debut by the end of the year at the latest.”
If the report is correct, than the feature addition appears to be a done deal. However, Apple and movie studios haven’t quite reached an agreement over how much movie downloads should cost. Variety claims that Apple CEO Steve Jobs came up with an idea of selling all movie titles for $9.99, an offer “the studios flatly rejected.” A possible reason: Studios may be afraid of offering Apple a better content deal than large retailers such as Wal-Mart, Best Buy and other stores that bring in the lion’s share of the studio’s home video revenues today.
Variety quoted studio executives “close to the negotiations” saying that “We can’t be put in a position where we lose the ability to price our most popular content higher than less popular stuff.” However, the studios also know that they will need Apple and its estimated 80% market share in legal digital media downloads to gain access to a broad distribution of their content: “Every studio wants to have broad distribution in digital, and we all know that having Apple as part of that is very, very important,” the executive was quoted by the publication.
In the end, it is not unlikely that Apple will agree to movie download pricing that ranges from about $10 on the very low-end to $20 and more on the high-end for just-released titles. And even if we don’t doubt that Steve Jobs will be able to sell such an agreement as the greatest service invented in our times, we cannot help wondering if it will be attractive enough. $20 for a digital movie to be watched on a 2.5″ Ipod screen or a larger PC screen is a lot of money, even if its downloaded from Apple’s Itunes.