Hollywood Against Jobs' Movie Pricing Plan

Alex Romanelli, Variety writes "Hollywood insiders tell Variety why/how Hollywood is in stalemate with Jobs over movie downloads on iTunes. Jobs wants a flat $9.99 per film download, studios are refusing, insisting upon tiered pricing. On the other side there's a different, longer, analytical story looking at how H'wood executives are still unsure if Jobs should be considered a friend or foe."

Comments

Screw that.

[SatanicPuppy]

I can hit Best Buy and get stuff for $7.00 now.

Of course, it occurs to me that the MPAA is whining because they want to charge MORE than that. Oy vey. The problem with ITunes is that there's no damn tail...A dollar (or ten) is too much for 80% of the stuff that could be sold.

Re:Screw that.

[IAmTheDave]

A dollar (or ten) is too much for 80% of the stuff that could be sold.

Which is why it amazes me that they still question whether or not to look at Jobs as friend or foe. Jobs single handedly creates a system that sells over 1B tracks of music, at least a good percentage of which is of a questionably quality. He single-handedly forces everyone into the digital generation, where the studio contracts actually pay the artists LESS per track, while having almost zero overhead cost for the production of raw goods because there are no raw goods.

Yes... with such success... how DOES one reconcile Jobs as anything BUT the enemy?

Bunch of ass-wads, the **AA.

Re:Screw that.

[Ryan Amos]

Jobs is the enemy because he is removing distribution control from the record labels. They seem to care about this as much as they do about profit. Now he wants to do it to the movie industry. They don't understand that one of the reasons iTMS is so popular is that the pricing scheme is so simple. No needing to worry about what price the thing you want to buy is, just $1 a song. They don't realize that whatever hamstrung service they try to use to sell low quality downloads for the same price as the DVD won't catch on.

Or, I'll put it this way for the MPAA, so they might understand: The alternative for most people is NetFlix and a DVD burner.

Re:Screw that.

[Anonymous Coward]

The reason the companies that compose the RIAA exist is that they control the manufacturing and distribution channels for music. They control the ad space, the store space, the presses, and the people trucking the CDs to the stores. They can be the difference between selling CDs at your concert in a bar and being on MTV every day for six months. The difference between working your entire life with two jobs: artist and dishwasher. The RIAA itself only exists to protect the interests of the cartel in a larger, uniform context.

If the iTMS usurps their position, and Apple as the owner of the iTMS dictates its terms, then these companies have lost a large part of their power. Even if they make more money per unit now, they know that eventually they will simply be cut out of the equation because people don't drive to the mall to buy CDs from stores under the thumb of the recording industry. Their presses become less meaningful, and their control of the retail market becomes less meaningful, and eventually Apple can simply take their place. Then people will go to signing deals with Apple, because the iTMS means the difference between being a dishwasher and making piles of cash on music. And that's when it's all over for the RIAA. They sure don't want that, so they want to reign Apple in. They want to control the iTMS like they can control chains of CD stores and factories producing CDs.

The movie industry has a slightly easier time of it, but they too don't want to hand over the keys to the kingdom to Apple. The middle man eventually gets cut out of the equation. Plus all of this digital media means they can't ever expect to resell the same movies on a different format and expect people to pay full price for them. The ability to play MPEG formats isn't going to disappear in ten years. Or twenty years. Or thirty years. It'll exist for as long as there's still a library of media. It doesn't, unlike hardware-sensitive formats like CDs, tapes, and records, cost more to continuously support software that works.

Tiered Pricing

[MBCook]

insisting upon tiered pricing

This is a lie, just like the RIAA saying they want tiered pricing. I'm sure Jobs would agree if the tiers were $2, $4, $6, $8, and $10. But what the industry REALLY means is something more like $10 (just a handful of stuff), $12 (older stuff), $15 (a few years ago), and $20 (anything recent or popular).

Tiered pricing is fine when the tiers are reasonable. THAT is the problem with the industry's proposal.

He forced the RIAA to stick to $1 a song, he has enough clout that if a few small studios would agree he could force the rest of 'em to agree (or lose tons of business).

Re:$9.99 Still Too High

[fistfullast33l]

If they let me rip the thing to DVD, then we can talk. Even better would be able to move the file from one machine to another for playing. Of course, iTunes doesn't let you do that easily, but it is possible. I think if they do it right, then I'd consider the $9.99 price because that's what I buy most of my DVD's at now. The only difference is that it's a hard copy that I can kind of illegally without conscience rip when I want to. However, I bet the best they'll let you rip to is HD-DVD or BluRay because the copy protection can be enforced better.

The best online distribution so far is Steam (ducks). I was really impressed when I could install it both on my desktop and my laptop with the same username/password and it just updated both properly. I can install as many copies of HL2 as I want, but I can only play one at once. That's totally fine by me. As long as they know what I own and make it available to me whenever I want, I'm willing to put up with their system. AFAIK, iTunes doesn't give you your music back if you buy the songs and lose the original copy.

Re:I'd have to *GASP* side with the industry...

[Anonymous Coward]

What on earth makes you think that "tiered pricing" means "cheap"? Good money says that the prices the movie industry would charge would start with 10 bucks for the bargin bin crap and scale up from there.

Also, given the industry's stance on fair use, I don't think they want you to be able to rip a DVD for your own purposes. Their prefered model is making you buy the DVD, then pay extra for the download version. Look at the crap that gets pulled with copy protection schemes.

Perhaps in 1955...

[Elemenope]

But both styles are now generally recognized as correct. Since english doesn't have the equivalent of an Academie Francaise (yes I know, no accents. Well, screw, high school French teachers of the world), thank goodness, it is possible for local variations in common usage to add to to the lexical and syntactic richness and flexibility of the language. For quite a while now, both the xs' and xs's forms have been taught in beginner and college english, and both are in widespread use.

Re:$9.99 Works for me

[Rob T Firefly]

If it's something I can burn to disc and watch forever after buying once, I'd be into it as well for $9.99. If nothing else, it's worth it to get rid of the hassle of renaming "X.-Men_-_3_-_.ws.cam.dvdrip.xvid.mp3.divx.vcd.tmd .rsvp.cod.0u812.turk182.subs.dubs.tubs.releazed.by .fr0d0.da.man.[downloaded.form.somefreakingtorrent site.net].(1.of.1).pls.seed.omg.kthx.avi" to "X-Men 3.avi".

Friend or Foe is a valid question

[SmallFurryCreature]

Steve Jobs seems to have really understood the meaning of "the lesser of two evils" and "divide and conquer".

He also understands that most people do believe that "the enemy of my enemy is my friend" no matter how often it is proven wrong.

Put another way it is a good thing Steve Jobs is an american and not say in charge of China or Russia or america would be in deep shit indeed.

Look at the current story. "We", the consumer, want to pay as little as possible for our entertainment for what I presume are obvious reasons. Steve Jobs offer us movies for $9.99 the movie industry wants a tiered system where they can charge more for "better" movies. We, the consumer, ain't complete idiots and know that this probably means the movie industry sees $9.99 as the absolute minimum and everything that even got 1 star in the grocers gazette is going to be more expensive.

So Steve Jobs is the lesser of two evils, he has divided the consumer and the industry and because the movie industry doesn't like him and we don't like the movie industry Steve jobs must be our friend.

Put it simpler. For extra work I help at a convention stand with building and breaking. Sometimes they have a stand open during those times but they charge about 3 euro for a can. So instead I usually stop at the trainstation little supermarket and buy a bottle of water for 0.75 euro. A great deal. Well no, the real supermarket only charges 0.45 cent but compared to what is charged at the convention hall it is a good deal.

But you can explain that the little supermarket at the station has higher operating costs, stays open far longer and that warrants the extra price. This is true.

But now look at what Steve Jobs offer us. He actually has fewer operating costs. He never overstocks, distribution costs over the net are trivial, wages are a pittance compared to a chain of music shops and yet he charges prices that in the case of music are the same and with movies are actually HIGHER!

It is the VHS to DVD screw allover again. In europe we got different languages so different subtitles. This is was a real problem in the days of VHS when you could have only 1 subtitle. This meant that not only did you need a different product for each language region but also a subset of products wich were labelled imports and had no subtitle. For belgium (dual language) this meant a store had to stock 3 different versions of the same movie. Get it wrong and a customer coming to the store would just not buy it.

DVD changed this. Most big productions for instance are now dutch/french with dual language text on the box and you can choose the french dub, the original english and various subtitles.

Bam, in one fell swoop you elimated a whole logistics nightmare, forgetting for the moment that tapes are more expensive to produce and stock (size/weight) and how is the consumer rewarded, DVD is more expensive then VHS.

The entertainment industry is the only industry were cost savings result in higher prices. Imagine if Henry ford had done that. A T-ford would have cost more then a Spyker and the japanese would have charged a million dollars for a car while McClarens were given away with breakfast cereal.

But when it comes to entertainment/computers normal rules don't apply and Steve Jobs knows it.

$9.99 for a movie is bloody expensive when you realize most DVD's sell for less and Steve Jobs saves a fortune on not having to deal with a physical product.

But at least he charges less then the industry wants so he does us a favor right? No, not really. It is thanks to Steve Jobs that most people now accept that a non-physical product should cost the same as a physical product. Yes he has allowed us to buy a portion of the physical product but depending on the album CD price and the number ofsongs often times the portion price ($0.99 per track) is more expensive per track then if you bought the whole CD. It is like that snack store that sells you a single candybar, cheaper then the package of ten BUT more expen

Re:Friend or Foe is a valid question

[SkyDude]

Bam, in one fell swoop you elimated a whole logistics nightmare, forgetting for the moment that tapes are more expensive to produce and stock (size/weight) and how is the consumer rewarded, DVD is more expensive then VHS.

This is not a new business model by any stretch. The banking industry embraced the ATM for two reasons: ATMs brought in more cash than they dispensed, and one ATM serves hundreds of transactions each day. The human teller, who wants vacations, sick time, etc, might serve 50 people all day. Yet, fees continue to go up at most US banks. And, even the convenience of a withdrawal from an ATM costs you.

It's just another industry picking up the same concept.

Business Model

[SomeOtherGuy]

Who is buying all of these movies?

The rental model (netflix, blockbusters, etc) seems perfect for movies - the ending does not change the 10th time through.

    Who wants to own all of these things? What kind of persona is sitting down right now putting in that Pauly Shore flix for the 14th time going, sure am glad I own this one, pass the popcorn.

I am actually surprised DVD's sell so well. Kids movies are one thing, those little rascals can sit down and watch the same thing a hundred times. But what is the drive for adults to actually own so many movies? Sure, if you did not see it in the theatre -- and it is cheaper to buy than rent, and you need to fill in all of those ugly empty storage spots in your entertainment center...I guess so.

Online movie purchases are even weirder -- for something to be DVD quality, I think would put it in the 2 or 3 GB range....I could watch 2 or 3 movies in the time it would take one of those to download on my connection. Let alone the time it would take me to burn it onto hard copy media. Sounds like a lot of work for something I can just have show up in the mail from Netflix and watch in my DVD player -- and then send back for another one that I have not seen, and do not know how it ends :)

$10 is fair

[Ghost-in-the-shell]

I would be willing to pay $10 for my movies if I have two of the following rights! I can burn them to a DVD to play on my DVD player. Also I would want the FULL catalogue available, so I can get a copy of some MGM classic for $10 or get the latest and greatest blockbuster for $10. Either way once I download it, I own that copy.