OK. We'll Raise the Price. But You Damn Well Better Kill the Fake Steve Jobs Film.
It’s not often that one emerges from a Steve Jobs negotiation with anything more than a warm glow–especially members of the entertainment industry.
So it’s surprising to hear that Apple may have agreed to raise the average price of the movies at its iTunes Store. According to a report by Pali Research analyst Richard Greenfield (viewing requires registration), the company is courting 20th Century Fox (a division of News Corp., which is buying Dow Jones, owner of this site) with a plan to boost the average wholesale price of a movie to $15–just $3 below the average selling price of a DVD. Also under discussion: a new Apple-friendly “premium” DVD that would offer a version of the included film optimized for iTunes. Price: $3 or $4 more than the average DVD.
“While we suspect Fox will be the first studio other than Disney to fully embrace iTunes, we believe others will quickly follow suit,” Greenfield wrote, noting that studios are eager to prove to big-box retailers like Wal-Mart that iTunes significantly undercut their business. “The last thing the movie industry needs is pressure on new-release DVD wholesale pricing, although the studios probably make more money on an iTunes wholesale of $15-plus than most DVDs at $18, due to returns.”