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Apple Losing Money on New Movie Sales?

Much rather have a DVD for a couple bucks less with higher quality and on a disc then buy these digital versions.

Renting though, I think it is awesome, still too expensive as I can go to my local store for about half the price though, but in that case I could care less about having a disc.
 
It's funny to see that no matter what, Microsoft gets dragged into it and no matter what goes on, Apple is doing 'the right thing'. Steve is always right :p But with 18 billion dollar in the bank and not knowing what to do with it, subsidising some movie scheme won't hurt much. On to world domination!
 
I wonder how long Apple will continue to try and subsidize movie sales to move Apple TVs. Unless sales pick up big time for Apple TV, I wouldn't be surprized if Apple lets this one die on the vine. It just seems like it is not working.
 
:apple: is playing the same game they did with the iPod and iTunes.

All this is round two with iTunes content (at a loss) to spike hardware sales (bigger profit).

When :apple: sell anything on iTunes it has to give a cut to the content providers, however if it takes a loss there it will recoup the cost with the hardware sales on the :apple:TV profits that they keep all for themselves. ;)

Perfect sense, let people adopt the :apple:TV and then push it to the studios once the 3rd competitor for HD content is here to stay.

HD-DVD (lost)
Blu-Ray (seems to have won the battle)
:apple:TV will win the HD war. :)
 
reallynotnick said:
Much rather have a DVD for a couple bucks less with higher quality and on a disc then buy these digital versions.

Renting though, I think it is awesome, still too expensive as I can go to my local store for about half the price though, but in that case I could care less about having a disc.
Click to expand...

Some studios have started to include digital versions for use in digital playback devices like ipod directly on the same DVD movie disc or Blu-ray disc.
 
"Screw" it! Apple you want profits. Bring PORN onto the scene!!!

There's your profit and that's the "hard" truth. The only true way to market "penetration" is to peddle the flesh. The "climax" of my point is that content gets you over the "hump" faster than ever.

;)
 
Only got a few words to say about this...

1 - It reeks of MPAA greed -- to the bone
2 - Apple should have told them to pound salt
3 - This will fail miserably

Sorry but I'm going to pay 14 or 16 bucks for a digital only (less than dvd quality) version of a movie that I can get from amazon.com for 9.99 or 12.99 because....

Why exactly...

This will do nothing but ensure a very health and robust P2P community for some time to come... Where you can not only get tru dvd quality including the extras but also an enormous collection of HD quality movies as well...

I don't condone it (p2p movie sharing) but with a move like this I don't see it doing anything increasing its popularity.

Bozo move if you ask me.

D
 
A movie distributed digitally should cost no more than 1/3 the price of a physical copy. Anything more is a ripoff.

This is just another case of consumers/companies getting less value for the things they buy.

To gain marketshare in movie downloads, it does make sense for Apple to sell at a loss. Lower prices may entice more people to buy.

But to entice me, new movies would have to be priced at $7.99.
 
Soundhound said:
But... If they ever get 50,000 or however many titles netflix has, Apple will rule the world: want to watch a movie, any movie you can think of. Press a button, watch movie. it will be huge.
Click to expand...
That's the only thing keeping me from buying an AppleTV right now. I want to wait it out but it doesn't seem like they're increasing inventory very quickly, so I might spend that money on a new PS3 and Netflix instead. And a large Hi Def inventory is mandatory, I can't watch standard def anymore!
 
Loss Leader

Loss Leader Strategy

What does it Mean? A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.

Investopedia Says... The loss leader strategy is more than just a nifty business trick - it is a successful strategy if executed properly.

A classic example is that of razor blades. Companies like Gillette essentially give their razor units away for free, knowing that customers will have to buy their replacement blades, which is where the company makes all of its profit.

Another example is Microsoft's Xbox video game system, which was sold at a loss of more than $100 per unit to create more potential to profit from the sale of higher-margin video games.

-http://www.investopedia.com/terms/l/lossleader.asp


=========================================================

This is what's going on and Apple's marketing & strategists think it's the right move.
 
^^ The XBox is a terrible example as it still isn't breaking even and the chances of the billions already sunk into it being recovered are minimal.
 
Check the Source

1. Rupert Murdoch buys MySpace.

2. Rupert Murdoch buys the Wall Street Journal.

3. Rupert Murdoch converts MySpace into a music sales outlet.

4. Wall Street Journal begins to claim that iTMS is a money losing venture.

Think about the source of your "news" people.

Rupert Murdoch and the like are monopolists willing to exercise any advantage to gain market share.
 
gkarris said:
I bet it's the same when you see DVD's on sale the week of release for $12.99 (that's how much they are around here).

They get you to go to the store for the DVD and the store hopes you walk out with a new LCD HDTV or HD Camcorder....

I think they're called "Loss Leaders"?
Click to expand...

That's exactly right; Best Buy, Circuit City, etc. are happy to lose money selling things like new games, DVD's, music CD's, etc. in order to bring people into the stores who they hope will buy bigger ticket items.

These stores actually really dislike the people who come in there solely for the discounted new release games and DVD's and stuff because they don't make much of any money off of them.

So someone who goes into Circuit City to buy that new $60 game for $47 doesn't help them, but if that customer eventually buys a new HDTV and some monster cables from them, it all works out.

It Apple's case the hope is to keep providing content for people to keep wanting to buy Apple hardware
 
A THX certified AppleTV?

roocka said:
I think that would be awesome.
Click to expand...

That doesn't really make any sense. THX-certified theatres? Great. THX-certified cables? Overpriced. THX-certified amps? No real benefit. But a source component?

Doesn't seem like it'd make any difference.
 
somebodyelse said:
1. Rupert Murdoch buys MySpace.

2. Rupert Murdoch buys the Wall Street Journal.

3. Rupert Murdoch converts MySpace into a music sales outlet.

4. Wall Street Journal begins to claim that iTMS is a money losing venture.
Click to expand...

Hmm, maybe they are trying to bias other negotiations against Apple. Its a bit of a stretch even though Murdoch is a very powerful media mogol.
 
My sloppy explanation

10 million movies * $.05 loss per movie = $500,000.
If having all those movies for sale sells 5,000 extra iPods at $100 profit each, that = $500,000.
 
So long as the "loss" remains around 50-100c I wouldn't be too concerned.. the flow on effect ends up being a profit.

1) If people are buying these movies, then they are also likely to buy other movies which will be at a small profit.. ie it balances out long run

2) the more iPods a person will buy over their life time the more profit source Apple has to cover the small loss on the movies.

3) You will also find a lot of people won't buy too many movies, so the potential loss on the power buyers (100s of movies) is offset buy those who buy few or no movies at all.
 
no problem,

Apple will sell those movies in Europe for 14,99 Euros, which is about $23, so they will get their profit anyway later on :)
 
OK my thinking is and assuming op info is correct.

1) New releases lose $1
2) Older releases gain the $1 or more back by having a higher relative price assuming no fixed pricing no matter when its released like music. Can you really see a digital move going as cheap as a dvd - we can get dvd's for under 5 quid (new anything upto £20) after a couple of months if its a poorer title :rolleyes:


No biggie, Apple is thinking new titles entice, older/back catalogue titles returns any lost profit, simple business profile thats worked many times in the past.
 
Can't Last for long as it is against the law to do so

Unless there is a different requirement for online venders this cannot go on for more than about three weeks. The reason for this is because there is a law with does not allow a company to sell things below cost for more than a promotional period. It is a way to prevent companies like walmart to sell everything below cost for two years forcing everyone out of business. I know this because I worked for a grocery store company in the it department and we had to do checks to verify that we did not have a product priced below cost for too long. I don't see why this would not be the same for Apple.
 
ingenious said:
Me, too, especially since Blu-Ray movies are going for around US$32 at my local Wal-mart stores.
Click to expand...

Wow! $32 you are getting robbed. Most blu-ray titles are going for $20 - $27.

Just order through Amazon. If you are a premium member 2-day shipping is free.
 
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