News Corp and its studio Twentieth Century Fox are close to a deal with Apple (NSDQ: AAPL) to begin offering new releases and catalog movie titles through iTunes beginning in early 2008, reports Pali analyst Richard Greenfield, in a blog post (reg. req.) He said the two sides are waiting till early 2008 prevents any impact to the all-important holiday DVD selling season. Disney (NYSE: DIS) is the only major studio with full catalog within iTunes for now, while Paramount, Lionsgate and MGM have partial catalog deals.
The post outlines some reasons for this possible change. The major one: Apple appears willing to modestly increase the wholesale price paid above the $14.00-$14.50 that Disney has been receiving. Others may follow suit if Fox comes into the fold. Also, studios want to sell premium priced DVDs that include a digital copy of a movie..if they add a premium to the digital copy which can play on an iPod, it may become attractive to consumers. One thing that remains unclear: whether the studios will allow iTunes to rent movies or create a subscription service? There has been rising speculation that an upcoming version of iTunes will enable that feature.
NYT’s Bits blog: Another force may be Amazon.com, (NSDQ: AMZN) which is selling downloads from Fox and other studios. Remember that Amazon’s entry into the MP3 business put pressure on Apple to lower the price of its unprotected downloads.