Users would be able to download the latest Twentieth Century Fox movies from iTunes and view them for a limited time. No pricing details were available, but earlier reports suggested that Fox and Apple were talking about charging $2.99 for 30 days viewing. That’s considerably cheaper than competing services from BlockBuster (BBI) and NetFlix (NFLX), neither of which works with iTunes, Macs or iPods.
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As part of the agreement, Twentieth Century Fox will use Apple’s FairPlay digital rights management technology in future DVD releases, marking the first time someone other than Apple has used the technology, the report said. Using this technology would allow users to copy movies from a DVD onto an iPod, it said. In a related move, Fox also plans to release DVDs that use Apple’s digital rights management system, a move that would allow consumers to make legal copies of the disc that could be played on an iPod or other device, such as a computer.
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The deal between Apple and Twentieth Century Fox will “likely” be announced on January 14 at the Macworld conference.Besides Twentieth Century Fox, Apple has been holding similar talks about online movie rentals and FairPlay with Sony Pictures Entertainment, Paramount and Warner Bros.. Until now, no studio has agreed to such a deal with Apple, and some companies have continued to resist Apple’s pitch.
Apple already sells movies from some studios via iTunes, which consumers can keep permanently. Walt Disney Co. – where Apple chief executive Steve Jobs is a large shareholder and board member — sells both new releases and catalog titles. Some others, such as Viacom Inc.’s Paramount Pictures, sell only older movie titles through iTunes.
Now, rentals could help Apple energize its online video efforts by giving consumers more options for accessing movies. Sales of video through Apple’s iTunes Store have failed to grow at the same pace as the site’s music downloads, analysts say, while the company’s video device for living rooms, Apple TV, has been a poor seller.
Analysts were divided about what impact the Apple-Fox deal would have on the $9 billion U.S. movie rental business, which has seen steady declines in in-store rentals and slowing growth online in the past year.
The partnership would be beneficial to Fox, as a way to increase distribution of titles it releases to DVDs and to Apple to expand its product offering on iTunes. Both Fox and Apple have seen an increase in its share price.
Where as, the reports sent shares of Netflix Inc, a leading online DVD rental company, and Blockbuster Inc, the largest U.S. movie rental chain, down nearly 5 percent in morning trade. Shares of Netflix were down 4.5 percent, or $1.29, at $27.41 on Nasdaq. Shares of Blockbuster were down 4.8 percent, or 20 cents, at $3.98 on the New York Stock Exchange.
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|AAPL||199.83 (+1.26)||APVAS||08 JAN 195.0 (22)||11.65||5.8||3.6||3.6|
|AAPL||199.83 (+1.26)||APVAT||08 JAN 200.0 (22)||8.95||4.5||4.7||4.8|
|NWS||21.29 (-0.21)||NWSBD||08 FEB 20.0 (50)||1.7||8||2.1||2.1|
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