Apple and Amazon to unviel two new movie download services

Filed in archive Business Trends on September 6, 2006

Apple and Amazon are about to lift the curtain in the coming days on new movie-downloading services. The entry of Apple and Amazon is particularly significant because they are adept at making the masses comfortable with large-scale technological shifts. Within the high-tech and entertainment industries, there's a belief Apple and Amazon could help take the phenomenon mainstream thanks to their technology, marketing and retailing know-how.

Amazon has all the major Hollywood studios except Disney lined up to offer movies on its site, while Apple's iTunes has just one major studio - Disney.

According to the Los Angeles Times, Amazon enjoyed more initial success than Apple because, in part, it has deep ties with the studios through its online DVD sales. The menu of Amazon offerings is expected to include television shows, along with old and new movies. The service will work through a Windows Media-based player and content can be transferred to Windows Media video-compatible portable devices.

According to the Wall Street Journal, Apple has been unable to sign up all of the studios in large part because they can't agree on price. Many studios want more than the $14.50 or so Apple is offering to studios as a wholesale price per movie so they can create similar or bigger margins than they get with physical DVDs. Although DVDs generally cost more, around $18 at retail, studios have to factor in packaging and distribution, costs they don't have to worry about for electronic copies of movies.

Online movie offerings from both Apple and Amazon are expected to go on sale at the same time as DVD versions of movies are released.