Commentary


Movie ReelWith the success of the iTunes Music Store in carrying television series and music videos, people often wonder if Apple’s next step is to start carrying full-length feature films in the iTunes Music Store. It appears to be a logical next step to most people. However, the variables and complications involved in carrying films are much different than those for television shows.

You have to look at selling movies online from a value proposition perspective. What value is it for the motion picture industry to sell movies online? As it stands right now, very little. Let’s start with pricing. The average retail price for a DVD is around $29. Now, of course, no one pays that much (unless you still shop at Suncoast), but even a good price on Amazon will put an average DVD at about $17. Would the average consumer be willing to pay the same rate for lower-quality video with no DVD extras online? Probably not. A more reasonable price that your average consumer would be willing to pay would be about $10 which, as it so happens, is about what Apple charges for “feature-film-length” content already (see Conan O’Brien’s 10th Anniversary Special and The Best of Triumph the Insult Comic Dog).

But here’s where the problem lies. The motion picture industry looks at their content and says, “Well, you’re getting a full-length feature film, so you should pay full-length feature film price” and would want Apple to charge $19.99. The average consumer will, of course, balk at that price and say, “I might as well buy the stinkin’ DVD and rip it with Handbrake.” And this is where the disconnect occurs that could very well prevent movies from being sold online:

You and I perceive the value of a movie sold online as being less than the value of a movie sold on a DVD, while the motion picture industry perceives the value as being exactly the same and would want it priced accordingly.

And let’s not forget the perceived problem of piracy and the motion picture’s “my way or the highway” method of doing business because of it. As it stands, it would be trivial to take iTunes content and distribute it online, but it doesn’t happen because there are better ways for pirates to put content online. Lost is available through torrents the next day at a higher quality than the iTMS for free and yet thousands of people purchase Lost each and every episode. Not putting your content out there just because of the threat of piracy (which will persist irregardless of the industry’s efforts) is stupid, and it may take some great convincing on Apple’s part to prove otherwise.

But let’s look at this more positively. There was a time when we didn’t think that Apple could get all of the record labels to cooperate together and release their content online. “Oh, the risk of piracy is too great,” they cried. And yet, the iTunes Music Store is a rousing success. Of course, there are still several obvious and important holdouts (The Beatles, AC/DC, Metallica), but by and large the content library is wide and varied. There was a time when we didn’t think that Apple could get a number of the television networks to cooperate together and release their content online. “Oh, the risk of piracy is too great,” they cried, but less vocally than before. And now, the iTunes Music Store is doing gangbusters selling television shows.

So, the possibility is there. And let’s not forget the Disney-Pixar deal. If anything ends up as the catalyst for getting movies in iTunes, that will be it. Pixar is releasing Cars on June 9. Its DVD release will most likely fall just before Christmas. Think of the timing: just prior to Christmas, say around October, Apple has a media event announcing new iPods with larger storage capacity and extended battery life. “Oh, and one more thing…” and Steve Jobs announces the iTunes Movie Store, leading off with Cars as the marquee title (and maybe Pirates of the Carribean 2 or Apocalypto too—they may both be out on DVD around the same period). If it succeeds (and it will because the demand for iPods next Christmas will probably even eclipse this year’s record numbers), suddenly you’ll have millions of people buying Cars the day it’s released. They’ll sell more copies of it in one day than Sony has ever sold with any UMD title (after all, the most Sony’s ever sold of one UMD title is 100,000).

And let’s face it, with Disney onboard (and Buena Vista, Miramax and Touchstone), NBC Universal may want to jump in on it. Maybe even Viacom (MTV Networks are owned by them) and with them Paramount and Dreamworks. The only holdouts are going to be 20th Century Fox, Sony and WB/New Line. Independent Studios like Magnolia, Lion’s Gate and Weinstein would probably all trip over each other trying to get the opportunity of getting their films out to a now-enormous audience—way more than they could ever hope of reaching in limited-engagement art-house theater chains.

So, will iTunes ever carry movies?

Maybe. Eventually. If Steve Jobs can round up the studios to release their movies at a reasonable price ($9.99—nothing else will do) on the same days they release their DVDs, and if the technological hurdles (HD space, battery life and let’s not forget bandwidth) can be overcome, I’d say it’s totally plausible. The earliest this could happen I’d wager would be around late 2006. It may even be more realistic to think sometime in 2007. But it could happen and that’s something to look forward to.

UPDATE: There is some new, compelling evidence for the iTunes Movie Store that has been released since this was written. Check this post for more information.

Survivor LogoCBS is planning to release future episodes of Survivor through their own web site. CBS has been releasing episodes of some of their programming through Google Video which, by all accounts, has been a flop. There has not yet been any indication as to what will happen to their deal with Google, but this is not looking good for Google Video. The bad news for fans of the show is that CBS is still insistent on maintaining full control over their content and is only “renting” an episode of Survivor for $1.99 for a 24-hour period. Only time will tell to see how many times CBS has to fall flat on its face before they realize that the iTMS is really the best way to go.

UPDATE: A Marketwatch article says that CBS is also talking to several different companies about distributing their content including Apple. Perhaps CBS is smarter than they look.

(Thanks, Mac Daily News)

Some people are very displeased about the new programming efforts from ESPN. iLounge is reporting on this, but I noticed it during the brief period of time on Saturday before the “This Is SportsCenter” ads were temporarily removed. The comments were all negative and the idea of paying $1.99 for 30-second commercials doesn’t seem to be sitting right with anyone at all. Especially when many of the older (and, in my opinion, funnier) ones are available online for free.

I’ve been working on a future commentary piece last week called “Handicapping New Programming” (I’m hoping to have this up later this week) and I had actually speculated that ESPN might offer their “This Is SportsCenter” ads as a free download. I honestly didn’t think they’d consider charging people for advertisements, no matter how funny some of them were.

This has gone quietly unnoticed, but the most popular additions from last week are clearly the stand-up comedy bits from Comedy Central. Dane Cook’s session is the #3 download and Mitch Hedberg is close behind at #6, and these have been this way since they were released. I think it’s a combination of a number of things, but it essentially boils down to 20 minutes of comedy for $2, which works out to be cheaper than most comedy CDs. If Comedy Central continues to add new comics to this, it looks like it will end up being easy money for them.