Apple In Talks With Studios To Give iTunes Early Access To Movies

Apple Inc AAPL

Apple is making efforts to get early access to movies on iTunes and hence is negotiating with Hollywood studios. Cinema attendance is mostly stagnant, and home-video revenue is flat in recent years, due to which film companies need to find new areas of growth. And Apple wants to take advantage of this.

Could be a big win for Apple

According to Bloomberg, all the major production houses such as Warner Bros., Universal Pictures and 21st Century Fox intend to make new movies available for home rental. Apple is also trying to convince them to make those movies available on iTunes within two weeks after they open in theaters.

Theaters have been given a 90-day window of exclusivity from studios before they sell their movies online or issue them on DVDs. Theater chains wish to keep their exclusive hold over new movies and have been battling to do so. In some cases, they even boycotted films that were released too soon for home viewing, notes Bloomberg.

If Apple succeeds in landing a deal, it would be a boon for iTunes. Competition is very intense in the crowded market for movies, TV shows and music. iTunes has helped the company get a dominant role in music retail, but until now, it hasn’t carved out a similar role in music and video streaming. In 2014, the iPhone maker acquired Beats Music for $3 billion in an effort to create a music streaming service to compete with Spotify.

Studios could consider other options

According to Bloomberg, studios might get interested in some other technology platform instead of Apple to ensure that movies are delivered faster to households. Last week, Warner Bros. chief Kevin Tsujihara said consumer appetite is growing. It can be satisfied with earlier availability of new movies, which will help deter piracy as well. Citing people familiar with the matter, Bloomberg said studios could also consider the option of a premium-priced online rental for new movies at prices of $25 to $50.

Recently, Cinemark Holdings, the number three U.S. theater chain, said it is looking for solutions that will benefit both sides. It held preliminary talks about creating a so-called premium window for home entertainment. According to Bloomberg, such a service can be expected in the next 18 months.

On Wednesday, Apple shares closed up 0.98% at $111.03. Year to date, the stock is up more than 5%, while in the last six months, the stock is up more than 12%.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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