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Apple Losing Money on New Movie Sales?

Two Words---red Box

Two Words...red Box... I Can Go Get The Movie Quicker Than I Can Download It And Red Box Is A Buck.
When I Can Rent A Movie For A Buck, There Is No Need To Buy.
When This And Netflix Get Bigger Apple Has A Problem.
 
Soundhound said:
I got an Apple TV as a gift, wouldn't have bought one myself. Youtube on TV is actually genius, I love it. Being able to rent or buy movies is great, but the library is Waaaaaaaayyy to small - there's no reason to think of it as a resource yet. 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...
I agree-once the digital download matches the sound and video quality of a DVD re-encoded with Handbrake, and the digital download is cheaper than the physical media.
 
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU like Mac OS X; en) AppleWebKit/420.1 (KHTML, like Gecko) Version/3.0 Mobile/4A102 Safari/419.3)

if the stupid studios or apple provide the closed caption (there are very few out there and still not good enough), then it will be huge success. What's so hard about that? Need closed caption when in loud area or workout or airplane or whatever like Spanish people learning or deaf people.....
 
So if Apple really is paying $16/movie to the studios, how do all of these retailers sell DVDs for about $16 the week they are released? Better yet, how do they justify price cuts on DVDs to sometimes as low as $4 at places like Best Buy?

The thing that has been bugging me about digital movie downloads is they are NOT a bargain most of the time. You can go buy Alvin and the Chipmunks for $16 the week it comes out at Target or you can buy it from iTunes for $14.99. On the DVD, you get a hard copy and extra features. Someone please explain this math because I know it must be cheaper to sell digital copies than to distribute millions of packaged DVDs. Are the movie studios doing this on purpose to stifle demand?
 
fourthtunz said:
Two Words...red Box... I Can Go Get The Movie Quicker Than I Can Download It And Red Box Is A Buck.
When I Can Rent A Movie For A Buck, There Is No Need To Buy.
When This And Netflix Get Bigger Apple Has A Problem.
Click to expand...

Don't underestimate society's ability to be lazy. Apple will "out lazy" Netflix easily. No subscription, no delay, no returns, no queue... and now that you can rent and buy dirctly from AppleTV, no fuss. All they need is the library now.. ( and personally I think they ought to buy Tivo now and port the APapleTV component to Tivo's OS ( leave the DVR part intact though )
 
I have 2 gripes w/ movies on iTunes:
-if they have a movie that has sequels, have ALL the movies (like Saw 1, 2, 3 AND 4, not 1,2 & 4 w/no 3 or whatever)
-If we're paying the same price as a DVD, I want the download to be of DVD-quality plus have all the special features, languages, etc. Sure, that would mean longer downloads, but most people could probably wait 5 extra minutes or whatever
 
huntercr said:
Don't underestimate society's ability to be lazy. Apple will "out lazy" Netflix easily. No subscription, no delay, no returns, no queue... and now that you can rent and buy dirctly from AppleTV, no fuss. All they need is the library now.. ( and personally I think they ought to buy Tivo now and port the APapleTV component to Tivo's OS ( leave the DVR part intact though )
Click to expand...

They have to drop down over $200 on the AppleTV first.
 
Hard to Believe

I find that hard to believe that they would lose money.

As mentioned the profit on digital distribution if a lot higher so after the movie companies cut all that packaging, shipping, disc production etc etc would be eft for Apple to cover their costs.

I would Believe maybe a little above break even but not a lose
 
fourthtunz said:
Two Words...red Box... I Can Go Get The Movie Quicker Than I Can Download It And Red Box Is A Buck.
When I Can Rent A Movie For A Buck, There Is No Need To Buy.
When This And Netflix Get Bigger Apple Has A Problem.
Click to expand...

I somehow knew it was only a matter of time until we had more Red Box plugs in the :apple:TV thread. You'd think the fact that every time it's brought up people point out ALL the problems with it? Limited supply, is much further away than picking up a remote control, you're at the mercy of the previous renter to not scratch it.
:apple:TV and RedBox are NOT in the same market. Besides - if the price of gas continues to go up people are going to be FAR more likely to just stay in ;)

Of course there's the whole convenience factor - getting into the car, driving down the road, hoping the movie you want is in, driving back and then getting in the car again, returning the movie and driving back VS turning on :apple:TV, scroll around, press a button, go get drink from the kitchen, cook your popcorn and the movie is ready to go.

There's always a price for convenience...
 
russellb said:
I find that hard to believe that they would lose money.

As mentioned the profit on digital distribution if a lot higher so after the movie companies cut all that packaging, shipping, disc production etc etc would be eft for Apple to cover their costs.

I would Believe maybe a little above break even but not a lose
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That's assuming the insanely money hungry movie studios are passing that discounted cost down to Apple which I would kinda doubt because WalMart and Target would pitch fits like you wouldn't believe. I wouldn't be even remotely surprised if they charge Apple the exact same as they charge Walmart and Target... Yes, they really are that greedy.
 
I dont think the :apple:TV and ipods are in comparable predicament.

This loss leader approach may not actually work in this case because :apple:TV has so much going against it.

1) Why buy a digital download you can't share for more than a standard DVD
2) I am not impressed with the image quality
3) You have to buy an expensive box that is limited to streaming media (cable DVRs and Tivo work well and are already in place)
4) 1080p is starting to proliferate and prices are tumbling
5) Netflix isn't much more inconvenient and has a wider selection + free DLs
6) Requires high speed internet (a lot of americans are still subject to dialup)
7) Not expandable
 
Dr. Dastardly said:
I think they are looking more at this as an investment opportunity rather than turning a profit (breaking even). They want to get as many releases and have them available for distribution as soon as they are available on dvd. The traditional movie theaters days are numbered, soon to be replaced by digital distribution. Apple is trying to get as large a foot hold in that as possible and making the lost revenue up by selling Apple TVs and iProducts.
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The movie theatre will never go out of style. People want to see a movie on the big screen first, not a computer.
 
seedster2 said:
I dont think the :apple:TV and ipods are in comparable predicament.

This loss leader approach may not actually work in this case because :apple:TV has so much going against it.

1) Why buy a digital download you can't share for more than a standard DVD
2) I am not impressed with the image quality
3) You have to buy an expensive box that is limited to streaming media (cable DVRs and Tivo work well and are already in place)
4) Hi Def TV is starting to proliferate and prices are tumbling
5) Netflix isn't much more inconvenient and has a wider selection + free DLs
6) Requires high speed internet (a lot of americans are still subject to dialup)
7) Not expandable
Click to expand...

I'd say of the 7 the only ones that actually matter are 3 and maybe 5 and 6. However I don't think the people who are still stuck with dialup are big DVD watchers anyway. I.E. My parents - I think they watch maybe .2 movies a year. The only real killer is the cost of :apple:TV. Netflix is an entirely different model - if Netflix (or RedBox) were the be all end all solution every single Blockbuster would be closed by now and no cable or satellite provider would even bother with renting movies to their customers.

#4 is actually a PLUS for the :apple:TV, not a minus since it only works with an HDTV anyway. I'd say once they really start moving towards HD downloads you're going to see it really take off.
 
apple losing money on movies ..yeah right

come on guys you think steve jobs will pay to sell movies.
its digital media ..not a hard copy (no cost to produce)
the wall street doesnt know jack.
 
russellb said:
I find that hard to believe that they would lose money.

As mentioned the profit on digital distribution if a lot higher so after the movie companies cut all that packaging, shipping, disc production etc etc would be eft for Apple to cover their costs.

I would Believe maybe a little above break even but not a lose
Click to expand...

Sure they would.... its like printers and ink. Printers sell for cost (or less). Now you are tied to buying their high markup ink. Thats why there so many dire warnings about using 3rd party inks in your printer.

Also why milk is always at the back of the store. Its sold for cost or less, but you have to walk by all the other stuff to get to it. And then stand in line with the overpriced magazines and candy right there, tempting you....

Movies will bring people into the store, they'll walk out with music, or an iPod, or whatever. Expect to see much more being sold on the iTunes store. Also, I wonder how much Apple charges the studios to place their movies on the first page? Just like a grocery store where a manufacturer can pay to have their product on a particular shelf. Ever wonder why some stuff is on bottom shelf, and other stuff isn't?
 
snberk103 said:
Also, I wonder how much Apple charges the studios to place their movies on the first page?
Click to expand...
I don't know about movies, but apparently Apple does not charge for placement of music. Apple staff picks them based on their tastes and general popularity. They give priority to artists who is willing to offer promotions to customers such as $5.99 or $7.99 albums or iTunes exclusive tracks etc.
 
macenforcer said:
I don't believe this story. Not for a second.
Click to expand...

I don't see how this is so unrealistic.

They aren't saying Apple is losing money on the entire iTunes Store. They are saying that Apple is willing to lose a small amount of money with new releases to get more people to come to the store.

Movie studios want to charge more for brand-new movies, and less for older titles.
Apple doesn't want to create fluid pricing

Solution? Apple eats the cost of the new movies, to get a larger audience and sell more iPods and iPhones

arn
 
Antares said:
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.....

.....But to entice me, new movies would have to be priced at $7.99.
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All true, but you have to wonder: If the film companies are making $16 per movie (for nothing), then Apple surely wouldn't sell the movies at $8. I think if the companies were only asking for $5 to $8 per movie, Apple would charge $10 max.

Someone is being greedy, but I don't think it's Apple.

In fact, this makes me kind of angry at the MPAA for being so ridiculous in their demands. I wonder if they charge other companies the same amount to distribute their movies digitally? Maybe they're charging other companies $10 per movie, but charge Apple $16 because they don't want Apple to have such a dominance like they do in music.
 
arn said:
I don't see how this is so unrealistic.

They aren't saying Apple is losing money on the entire iTunes Store. They are saying that Apple is willing to lose a small amount of money with new releases to get more people to come to the store.

Movie studios want to charge more for brand-new movies, and less for older titles.
Apple doesn't want to create fluid pricing

Solution? Apple eats the cost of the new movies, to get a larger audience and sell more iPods and iPhones

arn
Click to expand...

That said, they are probably BOTH getting an offsetting cost discount on older titles, and, are selling more hardware as a result (primary motivation).

Also real, actual DVD's are artifacts (objects) real people still crave. Remember people crave a lot of things that are not necessarily good for them.

Of course most of those things are illegal, over-regulated, or VERY hard to get.

Rocketman
 
They're doing what other stores do.

You know how Best Buy and Circuit City have those deal buster laptop systems?

At the regular retail price, the margin is very slim.

But when they discount it, they lose money. They hope to make money back in accessories, software, services, and extended warranty contracts.
 
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