After conquering the digital music business, Apple is now in talks with the movie studios to make feature films available through its iTunes Music Store, reports various news outlets.
However, the main issue is price. Apple ceo Steve Jobs, who is personally involved in the talks, proposed selling all films at a flat price of $9.99, which the studios flatly rejected.
For other downloads, Apple has sold digital content at a single price $.99 for songs, $1.99 for TV shows and music videos. It has recently experimented with some longer video content, however, selling the Disney Channel telepic, HIGH SCHOOL MUSICAL for $9.99 and the BATTLESTAR GALACTICA miniseries for $14.99.
Apple gives TV and music companies a 70% wholesale rate and is offering the same to film providers.
The studios want to be able to control the difference between the price of new titles and older ones. With home video and DVD sales slipping, the studios are looking to the Internet as the next big market, however they still do not want to anger major retailers like Wal-Mart or Best Buy, which sell their home entertainment products. The traditional home entertainment biz still generates $23 billion in the U.S. per year.
Additionally, online retailers Movielink and CinemaNow are paying DVD wholesale prices to get digital copies.
However, some insiders say that Apple is willing to allow price points ranging from $9.99 to $19.99 in order to differentiate older titles from new releases.
Movielink and CinemaNow already sell permanent downloads of films. BitTorrent has a deal in place with Warner Bros. and is in talks with other studios. Amazon.com also will start selling movies online soon, possibly through its IMDb website.