When last we met I offered up a
few features I’d like to see in the movies I eventually purchase from the iTunes Music Store—a reasonable price, the ability to burn my purchases to a disc playable in my home DVD player, a format compatible with a portable player that features a screen larger than the one found on the 5G iPod, and a viewing and listening experience that makes watching movies from the couch an enjoyable rather than onerous experience.
Now let’s talk about the challenges Apple faces in its bid to dominate the downloadable movie market.
Foremost is money and media companies. Apple and media moguls differ on pricing. Apple’s mantra is “keep it simple,” and as such, it adores the one-price-buys-any model. The Media Mucks prefer variable pricing—asking a premium for the latest (and sometimes greatest) and willing to part with older, back-catalog content at a reduced price.
The music companies are just as keen to implement variable pricing on iTunes but Apple’s pretty well got them over a barrel. Prior to iTunes, purchasing downloadable music was more theory than fact. The field was wide open and Apple easily dominated it and set standards for everyone else. Consumers now expect to pay a consistent price for music, regardless of whether it came out yesterday or during the Eisenhower Administration, and this is well understood by the music industry and iTunes’ competitors. Until another service can make a successful play that challenges iTunes in a serious way, single price is here to stay.
Apple led the way with purchased video downloads as well and again was able to dictate terms. Oh sure, some networks resisted—attempting to sell content on their own—but these efforts largely went nowhere. (Free content, on the other hand, is
a different story. Significantly more people watch streaming shows—with commercials in place—from ABC.com than have purchased ABC/Disney content from the iTunes Music Store.) Important holdouts remain—HBO, in particular, may be a tough nut to crack.
Movies are a different kettle of carp. Unlike with downloadable music in the early days of the iTMS, there exist viable motion picture alternatives to iTunes. Anyone armed with a VCR/DVD-recorder/PVR and the wherewithal to purchase a pay-per-view program can “own” a recently released movie. TiVo is no slouch at searching for and accumulating classic films. Other online movie services do exist. While not immediate, NetFlix brings movies to you, which lessens iTunes’ convenience advantage. And, of course, there’s always BitTorrent. Given these various competing avenues, Apple may have less leverage in demanding the single-price model.
Yet single-price is important because convenience (and its relationship to price) are crucial. At $.99 a track and $1.99 per episode, music and TV shows are comparable to the pocket combs and playing cards sold at grocery store check-out counters. At what point will consumers hover their cursor over Meatballs 2’s Purchase button and think “God in heaven, there must be something better on TV?” $9.99? $14.99? $19.99? Consumers are going to be a little more discerning about what they purchase, particularly if they feel other avenues, though less convenient, will save them enough money to offer steak rather than burgers at the next neighborhood BBQ.
And, of course, we consume movies differently than we do music. Most of us (meaning those who don’t own Star Trek uniforms or light sabers) give the majority of movies a single viewing. Is that single viewing worth more than a ticket at the local movie theater?
Quite frankly, it beats the hell out of me. But I’m reserving a place on the couch, a large bowl of popcorn, and a big ol’ DP. This one is going to be fun to watch.