Pair prep a digital duel

The digital movie business is about to get a shot in the arm from the Internet’s two biggest media retailers.

Amazon.com will launch its movie download service later this week, numerous sources confirmed, while Apple will start selling films on Tuesday as part of iTunes.

Though they’re launching near simultaneously, the two movie stores will be different. Amazon.com is believed to have most, and possibly all, of the major studios on board, including Paramount, Sony, Universal, Warner Bros., MGM and Lionsgate, according to sources close to the deals.

The only studio that will definitely be part of Apple’s movie store at launch is Disney. Other studios will likely join iTunes in the next year.

Apple CEO Steve Jobs is the biggest individual shareholder in Disney and sits on its board, making a deal with the Mouse House easier. In addition, last year Disney was the first studio to start selling TV shows through iTunes, thanks largely to the relationship that developed between Mouse House topper Bob Iger and Jobs during negotiations to purchase Pixar.

The reason Amazon will have content from most major studios, while Apple may have only one, comes down to price, insiders said. Because it also sells DVDs, Amazon has agreed to studio demands that digital wholesale prices not undercut those of DVDs. As a result, Amazon.com’s digital download prices are expected to range from $9.99 to $19.99 — about the same as those for other online retailers such as CinemaNow, Movielink and AOL.

Initially, Apple was pushing to sell all films for $9.99, just as it sells songs for a flat price of 99¢ and all TV shows for $1.99. But due to studio pressure, it will launch with two price points: $9.99 for library titles, $14.99 for new pics in the DVD window.

Amazon has been expected to join the digital download biz since early this year (Daily Variety, Jan. 27), while Apple’s decision emerged in June (Daily Variety, June 19).

Since Internet film sales began in March, consumer interest and sales have been minimal.

Both Netcos will likely attempt to boost sales, and differentiate themselves from competitors, by launching additional services and products around movie downloads.

Apple is planning to launch a device that will stream movies from the computer to the living room, allowing consumers to watch downloaded movies on a TV, Web site AppleInsider reported Tuesday. In addition, Apple may launch a version of its iPod with a bigger screen better designed for films.

The iTunes moviestore and related devices will likely be unveiled at a press conference Apple is holding in San Francisco on Tuesday.

Amazon.com’s movie downloads may be integrated into its homevideo sales, allowing consumers to watch a film immediately online after buying the DVD, or to “try before you buy” by watching a movie online, then getting a credit if they purchase the DVD.

Neither company is expected to offer at launch the ability to burn a downloaded movie onto a DVD, though that option will likely be added soon. CinemaNow is the only e-tailer that allows DVD burning, and only on a limited number of pics.

Reps for both Amazon.com and Apple declined to comment.

Follow @Variety on Twitter for breaking news, reviews and more
Post A Comment 0