Inside Move: Disney touts DVD tie-ins

iTunes debut of 'Cars' is 1st test I

Disney revved up its promotional machine for the first big test of its iTunes download movie pact with Tuesday’s DVD debut of “Cars.”

The studio, which angered key retailers when it launched its iTunes deal in the spring, lined up a series of “Cars” tie-ins with the same chains. Among the goodies: Two-disc “exclusives” at Wal-Mart and Target; a $5 gift card at Toys R Us; and a free poster and a four-car gift set with the purchase of the pic at Best Buy.

“Cars” will be available for $12.99 iTunes downloads for a week. That price is lower than the typical movie wholesale costs of even the major chains.

Pricing has been the main sticking point in Apple’s attempt to crack the movie download market as it earlier conquered music downloads. So far, only Disney has agreed to allow its movies to be downloaded on the service, and that’s largely due to its ties to Apple topper Steve Jobs.

Wal-Mart has made its displeasure with Disney’s iTunes strategy known from the start, threatening to not carry Disney Channel made-for “High School Musical” on disc due to its earlier availability as a cheaper iTunes download. The chain, which accounts for 40% of DVD sales, has been negotiating for coupon deals to help make up the cost difference on movie downloads (Daily Variety, Sept. 29).

Not to be outdone, last month Target sent studios a letter insisting they provide it with equitable pricing.

Other download services such as Movielink and CinemaNow get their downloads for the same wholesale price as major retailers and charge $19.99 or $14.99. Under Apple’s movie deal with Disney, major new releases like “Cars” and the upcoming “Pirates of the Caribbean” sequel will be available for $12.99 download for a week. TV episodes are available for $1.99 downloads on iTunes.

The service sold “High School Musical” for $9.99 under the original TV pact, brokering the movie deal in August. Early last month, the “Little Mermaid” reissue was available for $12.99 downloads, but “Cars” is the first major new release, and it comes as the fourth-quarter competish is starting to heat up.

Most rival studios don’t expect more iTunes deals to be done until at least the new year, with some execs questioning whether they’ll ever be able to breach the pricing impasse. Fourth-quarter disc sales can account for half of the year’s DVD sales; at this point, digital downloads are a relatively small slice of homevid sales.

Disney is well known for its promotional tie-ins and has licensed a wide array of “Cars” product, from mini-boomboxes to bedsheets.

Other studios also have ramped up their DVD tie-ins to compete for fourth-quarter coin, with Target offering a bonus CD on the first season of Paramount’s “Beverly Hills, 90210.” Several chains are offering coupon or music download sweeteners with the purchase of Sony’s “Little Man” and MGM latest reissue of James Bond discs.

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