Apple is reportedly pushing movie studios to allow them to rent movies via iTunes while the films are still on their first run in theaters. The movies would be available at a higher rental fee than usual, but would be available two weeks after they debut in theaters.
21st Century Fox Inc., Time Warner Inc.’s Warner Bros. and Comcast Corp.’s Universal Pictures all confirmed over the past week that they are looking to offer high-priced, home-video rentals of new movies shortly after they open in theaters. Some studio executives have been pushing to allow home rentals as early as two weeks after theatrical debuts and are considering a deal with iTunes as one option, said the people, who asked not to be identified because the discussions are private.
The talks are part of Apple’s efforts to stand out in the crowded streaming content marketplace. While Apple’s iTunes has owns a dominant position in the digital music download industry, it has failed to gain a similar dominant position in video streaming.
Hollywood studios typically give theaters a 90 day or more exclusivity period, before making the movies available via physical DVD/Blu-Ray or online digital viewing. Both theater and home viewing revenue have remained flat in recent years, so film studios are being pressured to find new revenue streams.
Warner Bros. chief Kevin Tsujihara said last week that earlier availability of movies could satisfy a growing consumer appetite for content, and deter piracy.
While the studios could take another route, choosing a competing digital delivery platform instead of iTunes, Apple’s platform is attractive to the studios, due to its large number of Apple devices already in place. Premium online rentals of movies could cost anywhere from $25 to $50, says Bloomberg’s sources.
While some theater chains are expected to push back over early digital delivery of films, others aer known to have been exploring similar new revenue avenues.
Theater chains have battled to keep their exclusive hold over new movies, in some cases boycotting films that were released too soon for home viewing. But Cinemark Holdings Inc., the No. 3 U.S. exhibitor, said recently it’s looking for solutions that would benefit both sides and held preliminary talks about creating a so-called premium window for home entertainment. Such a service is likely within the next 18 months, one of the people said.
One concern by content providers is that even though iTunes has Digital Rights Management in place to prevent copying of digital content files, users could still use a camera to record the movie form their television screen. Competing service “Screening Room” offers a watermarking technology that is designed to prevent such piracy by making it possible to track down the source of a pirated file.