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Apple pitches iTunes movie rental to studios: WSJ

Posted by ElJay Arem (IMC OnAir) on June 10, 2007

By MarketWatch

SAN FRANCISCO (MarketWatch) — Apple Inc. is in talks with the Hollywood studios to make new movies available for rental for its iTunes service, according to a media report Sunday.
The rental service is being pitched aggressively by Apple, with titles renting for $2.99 for a set number of days before expiring, The Wall Street Journal reported in its online edition, citing two unnamed studio executive familiar with the matter. See Wall Street Journal story (subscription required).
It is unclear which studios might participate, with Viacom Inc.’s Paramount Pictures in favor and General Electric Co.’s Universal Studios Inc. currently opposed, for example The Journal said, adding that the service is far from a certainty with several details to iron out.
Apple, of Cupertino, Calif., now sells TV shows from several entertainment companies. It also offers older movies from studios including Lions Gate Entertainment Corp., Metro-Goldwyn-Mayer Studios Inc., Paramount and Walt Disney Co., but has had little success persuading major studios to give up their new releases for sale on iTunes, the Journal said.
Only Disney sells new movies through the service, The Journal reported, noting that Apple’s chief executive, Steve Jobs, is a large Disney shareholder and sits on the Disney board.
An Apple spokeswoman declined to comment, according to the report.
If Apple can persuade Hollywood to offer its new movies for rent, it could pave the way to offering them for sale, The Journal said, but studios are balking at Apple’s pricing, which is currently $14.99 for new titles, compared to around $18 for a new DVD, potentially undercutting a major income source for studios.
For Apple, whose annual conference for software developers opens Monday in San Francisco, such a deal would represent a departure from a long-term strategy, according to the report.
Jobs has many times dismissed the consumer appeal of rental-like “subscription” music services, which allow users to listen to as much music as they like for a flat monthly fee, without giving them permanent ownership of the songs, The Journal said.

(06/10/2007 – Source: )

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