Price a sticking point as Apple negotiates for movie downloads
Apple Computer Inc. is negotiating with most of Hollywood’s studios to offer movie downloads on its iTunes website, potentially by the end of 2006.
The major sticking point to the talks seems to be price, according to Variety magazine.
As with the recording studios, who have been pressuring Apple to offer different pricing for different songs, the studios want to charge more for their most popular products.
But Apple chief executive Steve Jobs wants a flat price of $9.99 per movie.
The flat price format has worked well for music at iTunes. Its simplicity appealed to consumers, who adopted legal downloading in large numbers with the advent of Apple’s iTunes music store.
In May the recording studios agreed to renew their contracts with Apple with the same flat price scheme, which gives them 70 per cent of the revenue.
But Hollywood has so far rejected the concept of flat pricing, Variety reports, saying executives want a range of prices, such as consumers might see at stores selling video and DVDs.
Hollywood movies have a limited online market now at websites like Movielink and CinemaNow, and Warner Bros. recently agreed to make movies available via BitTorrent. But no site offering films yet has the wide exposure of iTunes.
Several European countries are worried about iTunes’ dominance in the music downloading market.
Scandinavian consumer action
France is trying to introduce a law that will force Apple to make its iTunes music operable on any portable player.
Last week consumer agencies in Norway, Sweden and Denmark sent a joint letter to Apple, accusing it of having illegal restrictions on product usage.
Apple is violating contract and copyright laws by ignoring consumer rights to copy music they’ve bought into any format, they said.
The regulators have given the company until to Aug. 1 to respond and say they will take Apple to court if they’re not satisfied with the answer.
They also objected to Apple’s practice of constantly changing software and its contract with consumers, which waives the company from responsibility for damages related to its service.
“Consumers must be free to choose the equipment and software they want to use. Access to content should not be limited by accidental choices of technology,” Torgeir Waterhouse, a senior adviser on the Norwegian Consumer Council, wrote in a complaint to the Norwegian Consumer Ombudsman.
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