iTunes Movie Buyers Lose Wait

In a move that will surely please iTunes-using movie lovers, the Apple (Nasdaq: AAPL) iTunes store has announced it will make movies available for download on the same day they are released on DVD.

Previously, users had to wait 30 days to find a title on iTunes -- presumably a Hollywood studio requirement designed to give DVDs a chance to sell and to protect the traditional -- and lucrative -- DVD market.

Participating studios include Fox, Walt Disney Studios, Warner Bros., Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures Entertainment, Lionsgate, Image Entertainment and First Look Studios. Movies purchased from iTunes can be viewed on a video iPod, iPhone, Mac or PC, in addition to a widescreen TV connected with an Apple TV.

Apple TV users can't yet buy movies directly from their Apple TV -- though they can buy them via iTunes and then stream or move the content to the Apple TV.

Rentals will still come with the 30 day waiting period after the DVD release.

Cheaper Price, Fewer Features

With new releases priced at $14.99 and most catalog titles at $9.99, consumers can buy movies via iTunes at prices less than what they typically find for retail-priced DVDs. However, the iTunes-based movies come with just the movie, not the additional features and content that are usually packaged into DVDs.

As for this week, iTunes customers can buy new titles "American Gangster" and "The Diving Bell and the Butterfly."

Changing Digital Delivery

In a surprise move earlier this week, Warner Bros. announced during the company's quarterly conference call with investors that it would start letting video-on-demand businesses rent Warner Bros. movies at the same time as their release on DVD -- much like DVDs can be rented in brick and mortar stores the day they come out. According to Warner Bros.' calculations, the company is seeing that video-on-demand rentals bring a 60 to 70 percent profit margin vs. the 20 to 30 percent margin brought by DVDs.

Apple hasn't released any news about Warner Bros. rentals as of press time in response to the studio's announcement. However, both changes in video delivery signal a shift in the movie-viewing consumer landscape.

"It's about time," Mike McGuire, a vice president of media research for Gartner (NYSE: IT), told MacNewsWorld.

"Then again, licensing content for distribution on new systems is extremely complex and time-consuming, so I'm not surprised this sort of development has taken a while. You've got to remember that the studios and networks are still extremely protective of their existing DVD sales and rental revenue streams," he explained.

"I think the holy grail for consumers is a combination of buy-to-own and rental options. Ultimately, I think consumers would love day-date or simultaneous worldwide releases of all movies," McGuire said. That, he explained, would let consumers buy or rent a movie on the same day it was released in theaters.

"I think, however, that day is still somewhere out in the relatively distant future. I don't think studio economics, especially the way movies get financed, are quite at the point where the big guys are willing to do it just yet," he added.