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Tuesday, 04 December 2007 04:57

20th Century Fox boost for iTunes movie catalogue

20th Century Fox movies may appear on Apple's iTunes Store in early 2008, an analyst has asserted.

Rich Greenfield of Pali Capital suggests Apple is prepared to accept a modest increase in the wholesale price it pays for movies (it is said that Disney currently receives $US14 to $US14.50) in order to get more studios onboard.

Another part of the problem concerns prices relative to DVDs. If downloads undercut DVDs, the major retailers that currently account for the bulk of sales are likely to cut up rough. Rich suggests that may be solved by reducing the DVD wholesale price but switching to a no-returns policy. While the savings might be passed through to consumers, it is likely that stores would respond by reducing stock levels, so there will be more chance that you won't be able to find the DVD you want when you walk into the store.

But why should consumers pay as much for a download as a physical DVD? The quality is reduced, the extras are missing, and the cost of 'manufacture' and distribution are much lower.

As for the suggestion that studios may be able to charge extra for DVDs that include a copy of the movie that's ready to be transferred to an iPod or other player, that horse has already bolted. It's easy to rip a DVD for this purpose and most consumers seem to think it is a legitimate practice for movies that they have purchased, so few people are likely to pay more than a dollar or so for the convenience of an iPod-compatible file.

So far, the only movies available from the iTunes Store are the Disney catalogue plus selected titles from Lionsgate, MGM and Paramount.

The iTunes Store has so far offered movies for sale, not rental. According from reports from people that have analysed the latest version of the iTunes software, there are signs that Apple is preparing a movie rental service. The idea of announcing such a service at Macworld Expo in January along with @0th Century Fox's participation seems very plausible.

Oh, if the 20th Century Fox deal does go through, what's the betting it will be limited to the US?

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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