Since we don’t watch much TV in my house (no cable in our neck of Virginia), movies are our main source of entertainment. We’re always eagerly awaiting the release of a favorite film on DVD so that we can race to the local supermarket or department store to snap up a copy. (For my children, waiting for the latest Harry Potter DVD is like waiting for Christmas.)
But once a DVD is released, that’s when things get tricky. Then you have to play “which store has the best deal?” For instance, I purchased a copy of “The Golden Compass” last week. But I had to look in three different stores before I found one with a decent price tag. The difference between the lowest and highest price was $6. That’s a fair bit of pocket change. (Heck, you could buy a gallon and a third of gas for $6.)
That combination of wanting the newest releases and demanding the cheapest price is one reason that Apple just announced that it will no longer wait 30 days after the release of a DVD before selling the same movie on its online iTunes store. After signing a whack of contracts with movie companies (20th Century Fox, Walt Disney, Warner Bros., Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures Entertainment, Lionsgate, Image Entertainment, and First Look Studios), Apple will now make those movies available on iTunes for download the same day they are released in stores AND they’ll sell it for a price that will be tough for competitors to match — $14.99.
It’s all about convenience, and this is the latest attempt by Apple to corner the way people buy, watch, and listen to their entertainment.
SELLING AT A LOSS
Apple had already been selling more than a few movies and TV shows via iTunes, but it obviously wasn’t enough for boss man Steve Jobs. In fact, Mr. Jobs appears to be so eager to get people to shop for movies at iTunes that he’s basically losing $1 on every movie.
Most experts see two reasons for Apple to sell these movies as a “loss leader.” First, it wants movie fans to get hooked on the iTunes site for all their entertainment purchases. So when you drop by iTunes to pick up that copy of “The Golden Compass,” you might also snap up a couple of tunes by Nine Inch Nails. And since you missed it, you’ll buy last night’s episode of “American Idol.”
The second reason is that Apple wants you to use its gadgets. While movies can be downloaded to watch on either a Mac or a PC (only standard definition for a PC), they will also run on your iPod, iPhone, and Apple TV. They will not work on similar gadgets from other companies. Apple TV is the real fair-haired child here. Now that new versions of the software enable you to both rent and buy movies, Apple wants more people to fork over $299 for this extra set-top box that wirelessly connects your digital library to your TV.
(This is the same thinking behind Amazon’s e-book reader, the Kindle. Its wireless connection gives you the opportunity to buy a book when you want it.)
Hear that sound of bells tolling? It tolls for the DVD. It only seems like a few weeks ago that Blu-ray won the format battle against HD-DVD. These high-definition movie discs promise next-generation visuals that will blow away the aging DVD.
Few people have bought into the idea, so it’s not like the DVD will disappear tomorrow. But as Pacific Crest Securities analyst Andy Hargreaves said in an interview with Wired: Apple’s digital distribution plan “points to the weak spots in Netflix’s and Blockbuster’s strategies.”
Those two offer plans that let you rent DVDs through the mail, and both have dabbled in digital download deals that let users pay a monthly fee — not per movie like iTunes. But Netflix and Blockbuster have their hands tied by all the sticky content-rights issues that come with digital downloads.
“[Netflix] won’t be able to get a lot of new content now, next month, or even four or five months from now,” Mr. Hargreaves said. “Those issues don’t apply to Apple since it’s selling movies a la carte versus subscriptions.”
Apple is also a step ahead because it doesn’t need to transition between DVDs and digital files — it’s been all digital from the start. But Netflix and Blockbuster will probably provide both options for customers for several years to come, until digital distribution is de rigueur for all movie rentals and purchases.
Of course, Microsoft is tooting its horn this week. It just announced that it’s going to sell TV shows for download onto its Zune media player — two years after iTunes did that for iPods. Jobs has basically eaten Microsoft’s lunch in this particular field.
Life just gets easier, eh? We can get our books, music, TV, and movies without ever having to move an inch from anywhere. I’m not sure that necessarily makes it a better world, but it sure makes it a more convenient one.