Indie studio to sell only library titles

Apple’s new policy of allowing studios to join iTunes with only their libraries and not new releases is finding takers as Lionsgate on Monday became the third to add its pics.

ITunes’ price for the download of new-release movies — $12.99 the first week, $14.99 thereafter — remains an impassable sticking point for all studios but Disney (in which Apple CEO Steve Jobs is the largest individual shareholder) since it requires a lower wholesale price than studios get for DVDs.

That’s why the Mouse is still the only studio to sell new pics on iTunes.

Most studios are not yet willing to risk alienating retailers in the $25 billion DVD biz for the still nascent digital market.

Since the middle of last year, insiders say, studios have been asking Apple to consider a compromise: selling their library movies but not new releases. Apple is said not to have been interested in that deal at first.

But in a bid to add more film content prior to the launch of the Apple TV — a device set to launch this month that will stream digital media onto the TV — the Mac maker compromised and now allows studios to sell library content only. Paramount was the first studio to take that deal (Daily Variety, Jan. 10).

Insiders say Apple is actually paying more in many cases for library pics than studios get from DVD retailers for the same titles.

Other studios are expected to start selling catalog films on iTunes in the near future, though none have indicated they are willing to cut prices for films just as they hit DVD.

Meanwhile, sources indicated that Apple hasn’t yet shown interest in raising the price for new-release pics, meaning Disney will likely be the only studio with pics that just hit DVD available on iTunes in the near future.

Lionsgate’s deal with Apple isn’t surprising given the indie’s deep library and aggressive history in digital media. It’s a partial owner of CinemaNow and was the third studio, after Warner Bros. and Paramount, to let gamers download movie rentals via Microsoft’s Xbox 360.

“We have long felt downloads will provide exciting and continued growth in home entertainment,” said Lionsgate prexy Steve Beeks. “Seeing the big boys like Apple, Wal-Mart and Amazon.com get into this, as well as others coming soon, is really what this business has needed to give it a kick-start.”

Though studios started letting Netcos offer permanent digital downloads early last year, and have been doing Internet rentals since 2002, the market has thus far been very small.

However, insiders say Apple has already become bigger than all its movie download rivals combined based only on its selection of Disney and Par catalog pics.

Lionsgate plans to add about 150 pics to iTunes this month, including “Terminator 2,” “Basic Instinct” and “The Blair Witch Project.” Going forward, indie will populate the service with a variety of different pics, including family titles such as some from its “Barbie” made-for-DVD line.

Beeks describes the iTunes deal as a “first step” and said he’s hopeful Lionsgate will be able to sell new releases via the service in the future.

That only seems likely to happen, however, as DVD retailers start pushing further into digital media themselves and no longer threaten to retaliate if studios allow lower prices for downloads.

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