Movie Downloads Finally Coming to iTunes

Posted on June 20, 2006

The New York Times reports that Disney is expected to be the first company to offer movie downloads on iTunes.com. Disney was also the first to offer TV shows for sale via iTunes, starting with several shows from ABC including Lost. The Times article says Steve Jobs is proposing a $9.99 fee for the download-to-own films.
While Mr. Jobs is getting resistance from some studios, they are more open to the idea since most now offer their television shows on iTunes. "Steve wants to get this done, and the studios want to reach an agreement, too," said one person apprised of the negotiations.

But people involved in the negotiations said there were several potential snags, including fears about piracy and Mr. Jobs's proposal to charge a flat price of $9.99 for movies already sold on DVD.

Studios are concerned about preserving relationships with traditional partners, including theaters and retailers. In particular, one person involved said, a price of $9.99 for a movie would undercut the price Wal-Mart charges for DVD's.
$9.99 is cheaper than the price of new DVDs. However, it is not cheaper than rental fees or the price to watch a film using one of the on-demand services provided by cable companies.

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