updated 10:35 am EDT, Wed October 24, 2007
Apple skipping studios
Facing stiff resistance from film studios, Apple has turned to other parties to get content on the iTunes Store, reports say. Presently, the major studios on the Store are limited to Disney, MGM, Lionsgate and Paramount, supplying just under 1,000 movies; this leaves out some of the most important studios, such as Fox and Universal. To help fill the gap, Apple has been selling last year's Academy Award-nominated shorts, at a cost of $1.99. Crucially, however, Apple has negotiated for these movies directly, rather than working through a distributor. Each production outfit is thus receiving approximately 55 percent of iTunes revenue, enough to defray costs, though not turn a profit.
The most prominent circumvention of studios may be "Purple Violets," a romantic comedy by famed director Edward Burns. Although well-reviewed and costing only $4 million, the movie has not attracted theatrical distribution, prompting Burns and his company to sell it through iTunes starting on November 20th. This will mark the first time a full-length movie has premiered on iTunes; the ultimate goal, though, is to offset production costs and build steam towards screenings in major American cities.
iTunes is said to be attractive to short filmmakers, who have not typically had a means to make money on their output, but less so to feature producers, for whom the iTunes market is still too small. Burns partner Aaron Lubin remarks that furthermore, as a result of their iTunes deal, DVD distributors have been offering lower advance payments, expecting digital sales to eat into profits.