On the Web, iTunes is King
Jul. 31st, 2006 12:23 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chrystallineApple plants seeds for pic downloads - iTunes going to the movies
Okay, I can understand the appeal of having one price for all files. It simplifies things immensely, and makes a great marketing tool. Also, every retailer should have the right to set prices as he sees fit. HOWEVER - the retailer does not have the right to dictate price to the wholesaler/producers. This is one of the major gripes I've been hearing about Walmart, and Apple doesn't need the kind of bad PR that Walmart has earned through this same behavior. The film distributors should be able to set their prices as they see fit, and if Apple wants to price the downloads so low that it is essentially paying the studios to allow people to DL films, well, let 'em. I can guarantee you that's not what Apple wants to do.
That sounds much more reasonable.
Unfortunate. The law of supply and demand should allow more popular material to be priced higher. Granted, in the world of digital files, supply is pretty much a constant - there's no threat of "running out" of copies - but the less popular something is, the less people will be willing to pay. The principle remains the same, despite the newer technology.
I can't say I like this, but there's really no case for an antitrust accusation, either. It comes down to the fact that Apple did a better job of marketing their audiovisual entertainment solution than the alternatives, and until someone manages to create another juggernaut capable of taking on iTunes, it's going to be a major element of digital distribution to be available on iTunes.
The main sticking point is price.
Apple CEO Steve Jobs, who has been personally involved in the talks, initially proposed selling all films at a flat price of $9.99 -- an offer the studios flatly rejected.
"We can't be put in a position where we lose the ability to price our most popular content higher than less popular stuff," said a studio exec close to the negotiations.
Apple has traditionally sold digital content at a single price: 99ยข for songs, $1.99 for TV shows and musicvideos. It has recently experimented with some longer video content, however, selling the Disney Channel telepic "High School Musical" for $9.99 and the "Battlestar Galactica" miniseries for $14.99.
Apple gives TV and music companies a 70% wholesale rate and is offering the same to film providers.
Okay, I can understand the appeal of having one price for all files. It simplifies things immensely, and makes a great marketing tool. Also, every retailer should have the right to set prices as he sees fit. HOWEVER - the retailer does not have the right to dictate price to the wholesaler/producers. This is one of the major gripes I've been hearing about Walmart, and Apple doesn't need the kind of bad PR that Walmart has earned through this same behavior. The film distributors should be able to set their prices as they see fit, and if Apple wants to price the downloads so low that it is essentially paying the studios to allow people to DL films, well, let 'em. I can guarantee you that's not what Apple wants to do.
Online retailers Movielink and CinemaNow are paying DVD wholesale prices to get digital copies.
There are signs Apple may bend, insiders say, and allow price points ranging from $9.99 to $19.99 in order to differentiate older titles from new releases.
That sounds much more reasonable.
During negotiations to extend their deal with Apple last year, music labels tried to persuade Jobs to allow variable pricing for songs. But thanks to iTunes' 80%-plus market share in U.S. digital music, he had the leverage to stand his ground.
Unfortunate. The law of supply and demand should allow more popular material to be priced higher. Granted, in the world of digital files, supply is pretty much a constant - there's no threat of "running out" of copies - but the less popular something is, the less people will be willing to pay. The principle remains the same, despite the newer technology.
Since Apple does not license its antipiracy software, other online retailers can't sell copy-protected music or video that works on an iPod, and other manufacturers can't make players that work with iTunes content.
I can't say I like this, but there's really no case for an antitrust accusation, either. It comes down to the fact that Apple did a better job of marketing their audiovisual entertainment solution than the alternatives, and until someone manages to create another juggernaut capable of taking on iTunes, it's going to be a major element of digital distribution to be available on iTunes.