iTunes starts movie downloads
Apple promises set-top box to bridge computer, TV next year
By Jennifer Netherby -- Video Business, 9/12/2006
SEPT. 12 | Apple launched movie downloads through its iTunes music and video store Tuesday with 75 films from the Walt Disney Co. and the promise of a set-top box that will help users transfer downloaded video content to their TV from their computer.
Disney's Pirates of the Caribbean: The Curse of the Black Pearl is one of the films now available for download through iTunes.
“In less than one year, we’ve grown from offering just five TV shows to offering over 220 TV shows, and we hope to do the same with movies,” Apple CEO Steve Jobs said. “ITunes is selling over 1 million videos a week, and we hope to match this with movies in less than a year.”
Apple is the leader in both music and video downloads and dominates the portable player sector with its iPod, so its entry into movie downloads is seen as key to expanding the market for feature film downloads.
Film downloads including Pirates of the Caribbean: The Curse of the Black Pearl, Shakespeare in Love, The Princess Diaries, The Incredibles and National Treasure launched Tuesday through the upgraded iTunes 7, which was offline in the morning for the update but available by mid-day. ITunes movie pricing for new release downloads preordered or purchased during the first week of release is $12.99. Prices will rise to $14.99 after the movie’s first week out. Most catalog movies will cost $9.99. New releases will be available day-and-date with DVD.
The iTunes site also is offering pre-orders on upcoming Disney titles Cars and The Little Mermaid.
Apple’s low pricing remains a stumbling block in its negotiations with other studios. “Why would we want to devalue our product?” one studio exec questioned.
An exec from another studio said that although the price of downloads doesn’t need to be as high as the wholesale price of a DVD, they want it higher than the $12.99/$14.99 new release price Apple is using. The exec said his studio would rather start with a higher price point and lower it if necessary.
Amazon similarly launched its Unbox movie download service last week with films from every major studio except Disney.
Jobs said the set-top box, dubbed “iTV” for now, “completes the story” for Internet video downloads. It will launch in the first quarter, priced at $299, and works with iTunes on PCs and Macs. The box will be half the size of Apple’s Mac mini and will include a built-in power supply; an Ethernet port; wireless component video, audio and HDMI ports; and RCA stereo ports.
ITunes downloads will be “near-DVD” quality with video encoding 640 X 480, according to the company. A film will take about 30 minutes to download, depending on the user’s broadband connection speed. Users will be able to download multiple movies at once and begin watching movies while they are downloading. (Click here to see our review.)
Usage rights will be the same as they are for TV shows downloaded through iTunes, in which users can watch the video on their computer or transfer it to a video iPod. Burning-to-DVD is not allowed.
After Jobs made the announcement, he was joined on stage by Disney CEO Bob Iger, who called iTunes’ launch of TV show downloads a year ago a “breakthrough.”
Apple also will roll out updated versions of all three of its iPod lines: the shuffle, the Nano and the iPod.
Video resolution on the new iPods has been upgraded to 640 X 480.
The video iPod will come in a 30GB model for $249, offering 3½ hours of video playback, up from 2 hours on the earlier model. The higher end, 80GB model is priced at $349 and features 6½ hours of video playback.
Apple also will begin selling game downloads through iTunes, with pricing starting at $4.99. Initial games available include Tetris, Mahjong and Mini Golf from Electronic Arts Inc.; Pac-Man from Namco Networks America Inc.; and Cubis 2 from FreshGames.
