By Erika Morphy MacNewsWorld Part of the ECT News Network
04/12/07 1:44 PM PT
MGM has become the latest big Hollywood name to add its clout to the iTunes roster of film offerings. Though the list of films available for download is still small -- MGM's titles bring it to about 500 -- the deal gives Apple an early advantage in lining up major content providers.
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Mad Max fans who would love to watch their beloved franchise on the video iPod (yes, we are out there) are now in luck. Apple (Nasdaq: AAPL) has inked a distribution agreement with movie studio MGM to add its movie content to iTunes' growing stock of films.
The movie studio joins Disney (NYSE: DIS), Paramount and Lionsgate as providers of movie video content on iTunes, bringing its total library of films to more than 500. Still missing from the roster are Sony (NYSE: SNE) Pictures, Universal Studios and Warner Brothers, some of which are exploring other digital distribution options.
Customers can download movies from iTunes for US$9.99 each.
Early Days
The MGM deal is one of many critical partnerships Apple has formed to propel its iTunes-iPod juggernaut, Charles King, principal with Pund-IT, told MacNewsWorld.
"Clearly, it needs to keep adding content in order to continue to grow," he said.
Yet for all the hype surrounding iTunes -- there has been much fanfare over such milestones as the billionth song downloaded, and so on -- King noted that the portable video and movie niche is still in its early days. Apple may lead now, in other words, but it may not lead forever.
"It is still not clear whether it will be a huge revenue driver for Apple," King said.
The iPod Connection
Of course, the whole point of offering songs for 99 cents and movies for $10 is to generate sales of the iPod -- not to drive profits from content sales.
However, Apple's hold on MP3 player market is by no means preordained to last forever.
Devices introduced by other manufacturers -- notably Microsoft's (Nasdaq: MSFT) Zune -- could eventually eat into the iPod's share.
Then there are the movie studios themselves, some of which have balked at providing content at Apple's suggested price points. Hollywood has become more amenable to exploring other digital options. For instance, last year it began making movies available for sale over the Internet on the same day they were released to DVD.
The only course for Apple to follow in the face of such competition is to continue to lead by offering more content, King said.
Ever since Apple introduced its video iPod, it has actively increased its content offerings. Movies are just the latest addition. Last year, Apple focused on TV content: cartoons, music videos, and series ranging from current hits "Desperate Housewives" and "Lost" to old favorites like "The Munsters" and "Dragnet."
EC Files Formal Objection to iTunes Sales Model April 03, 2007
The European Commission has sent a "Statement of Objections" to Apple and the major music labels whose wares are sold in Apple's online iTunes store in Europe. The EC asserts that agreements between Apple and the music labels "violate the EC Treaty's rules prohibiting restrictive business practices."
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