Apple Bringing Movies to iTunes?

ByJONATHAN SILVERSTEIN

— -- First it was music a la carte. Then it was TV shows on demand. Now there are reports Apple is in negotiations to offer downloads of full-length movies on iTunes.

A report in the trade newspaper Variety today says Apple is in negotiations with "most" major motion picture studios to iron out the details and bring the inevitable to fruition.

According to the report, price is holding everything up.

Steve Jobs is allegedly pushing for an across-the-board price of $9.99 per film, but the studios aren't biting, saying that new releases should cost more than older films.

As is typical for the maker of the fashionable and ubiquitous iPod, the company had no comment on the report.

"Apple loves secrets," commented Ina Fried, senior writer for CNET.com. "Apple loves to be the one to make its own news."

Fried says it's no shock that Apple is working on bringing movies to iTunes, but believes they may be dragging their feet with good reason.

"Apple is moving into video at a slow and measured pace," Fried said. "It still takes a lot of time to download video."

But it's the movie studios which may hold the true power in this deal, as they don't want to jeopardize the money brought in from already lucrative revenue streams like DVDs.

"Hollywood wants to augment what they're already making from DVDs," said Fried.

Still, Fried says studios know they have to do something to pull together a digital download model before the pirates begin taking an even bigger chunk of the industry's revenue than they already do.

She finds it hard to believe that an industry that has thrived on a variable price structure that allows them to sell DVDs of one caliber for $10 and of another for $30 would suddenly drop it for the across-the-board fixed pricing iTunes is known for.

Although she acknowledged that it's the individual studios that are working on deals, Kori Bernards, a spokesperson for the Motion Picture Association of America said, "Our companies [movie studios] are certainly thinking about different opportunities to distribute content."

She sited several examples of film studios making strides on the digital frontier, such as a recent deal between Warner Bros. and BitTorrent to allow the service to distribute Warner's movies legally.

Apple's unwillingness to stray from their 99 cent per song price created some headlines earlier this year, when members of the recording industry tried to renegotiate the price of songs and albums before agreeing to a new contract.

In the end, it was the recording industry that caved, signing a new one-year licensing deal with Apple in April.

Fried believes that if Apple and Hollywood are able to reach an agreement to bring movies to iPod owners, we may be looking at yet another iPod contraption.

"It's hard to image Apple having a feature film business and not having some kind of device to take advantage of that," she said. "I don't get a sense that the iPod has become a way for most people to watch video."

Although the video iPod plays video, Fried points out that it doesn't do it very well and it's certainly not capable of playing high-quality films.

Over the past months and years, Apple technophiles have created their own mock-ups of what a true video-playing iPod might look like, but to date, the company hasn't announced any new iPods.

Variety contributed to this report.

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