Movie Studios Play Right Into Steve Jobs' Hands

from the history-repeating dept

There's been a fair bit of talk lately about ongoing talks between Apple and Hollywood movie studios so that Steve Jobs and Co. can start selling movies through iTunes. Apparently the sticking point is that the studios "aren't going to tolerate what he did to the music labels" -- meaning they want more money, and more control. What they don't seem to realize, though, is that it was the record labels that made Apple so powerful in the music business, by insisting the music it sells be locked down with DRM. While the DRM may make copying the files more difficult, what it really does is lock consumers in to the iPod and the iTunes store. Should a label pull out of the store, consumers can't, and won't, go elsewhere to buy its music -- unless the labels would sell it without DRM. So, if the movie studios want to avoid such a situation, they should insist Apple sell their movies without copy protection. Of course, this would force them to confront their irrational fears about file-sharing and piracy, so it's unlikely to happen, but it would give them significant leverage over Jobs and his demands if Apple had to face the possibility of competing for iTunes users' media buying. The studios already "compete with free", so allowing the sale of unprotected, low-quality files wouldn't empower much more file-sharing. It would, however, give the movie studios the upper hand with Apple. Consumers, at least the honest ones that DRM "keeps honest", would still use iTunes because of its convenience, and the security of downloading media from a trusted source -- just as tens of millions iTunes users do with music today. Insisting on the use of DRM, and allowing Apple to use its proprietary approach, essentially grants Jobs a monopoly to sell their content to iPod users, and he exploits this to wring low prices and other concessions from content providers.
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  1. identicon
    93South, 21 Jun 2006 @ 8:40am

    iTune Could Work

    The itunes movie offering could work for the reasons you point out in reference to music labels - iTunes has the eyeballs to pull it off. This would be in contrast to many of the studios own attempt with the MovieLink service which currently searching for an new owner.

    I love the idea of Movies on demand, although the controlling aspect of iTunes DRM with music it a bit of a turn-off. However, I put up with it because it is easy.

    We'll see what happens.

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