Print 22 comment(s) - last by sdsdv10.. on Sep 23 at 7:47 PM

Apple's iTunes Store does $1 million USD in sales its first week out

In just a week, Apple's iTunes Store sold $1 million USD worth of downloadable Disney movie content. The service, which was launched last Tuesday, provides an existing library of titles for $9.99 each with new releases going for $14.99. Apple also discounts new titles to $12.99 for those who pre-order the movies before they are released or download it within the first week of availability.

Disney was the first movie studio to offer its full backing in providing an initial 75 movies to Apple's iTunes Store. More than 125,000 Disney movies were downloaded during the first week including such hits as "Pirates of the Caribbean: The Curse of the Black Pearl" and "The Incredibles." "We are very, very bullish on consumption over electronically delivered media and we're taking a very optimistic view of technology as a friend, or a great enabler, and not a great predator," said Disney CEO Robert Iger. Iger went on to give his praise for Apple's Steve Jobs, "He has become, very quickly, not only a great sounding board but a great advisor, someone I can turn to readily for advice in a lot of these areas."

Although still priced on the high side for some, it looks as though Apple, while not the first in providing downloadable movies, may have a winner on its hands. Disney is definitely counting on the success of downloadable movies and expects to the iTunes Store to generate $50 million USD in sales by the end of 2006.

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DRM = Bad
By ajfink on 9/21/2006 11:51:55 AM , Rating: 2
I would have bought some of those movies myself if not for the restrictive DRM. Give me a site that lets me buy DVD-quality movies or better that I could burn or watch with whatever program I wanted and they'll have my business.

RE: DRM = Bad
By bysmitty on 9/21/2006 11:59:23 AM , Rating: 2
What type of DRMs are on these files? I might be interested if:
-I can keep them on my file server so I can watch them from all of my computers.
-I can back up the files in the event of a system crash or reload.
-I can use a different movie player other than iTunes.


RE: DRM = Bad
By Phynaz on 9/21/2006 12:35:01 PM , Rating: 2
What type of DRMs are on these files? I might be interested if:


I can keep them on my file server so I can watch them from all of my computers.

You can.

I can back up the files in the event of a system crash or reload.

No problem, iTunes even has a backup feature.

I can use a different movie player other than iTunes.


RE: DRM = Bad
By DallasTexas on 9/21/2006 12:41:22 PM , Rating: 1
I also agree with your list. I do believe that Apple allows multiple PC's (and Mac's) to show the movies and an unlimited number of iPODs (I think).

IMHO, It seems to me DRM from different vendors (MS and Apple) will likely be the case for a long time. We are likely going to have to live with some sort of DRM technology from both of these companies and hence it's a matter of picking whether you like MS's options or Apples.

Apple has the lead now in terms of how much content is out there but your stuck with just iPOD's. If you go MSoft, they have less content but you can buy players from different vendors.

Personally, I think MS shot themselves in the foot by making their music/video service only play on Zune. This tells me that proprietary services will be the norm - at least for some time. This plays into Apples hand as they can now claim that iTUNES is not only better (it is), but also that there is no such thing as a standard and open music/video store that plays on every player.

RE: DRM = Bad
By nilepez on 9/21/2006 5:03:55 PM , Rating: 2
But why? The movies are more compressed than DVDs. AFAIK, they don't come with the extra features that dvd's come with, and the price is not much less than a DVD.

I believe that the pricepoint is better than Amazon, but to me a bare-bones movie is never worth more than $10.00.

The artwork, case and actual DL DVD is worth at least $3.00. Given that I can get most barebones dvds for 16.00 or less and catalog DVD titles are often $6.00-$10.00, these seem like excessively poor values.

At least my DVD's have some value. I can resell a used new release for about the price of what an iTunes movie will cost. I doubt Ebay would even allow you to sell an iTunes or Amazon movie.

I still buy CD's and encode them myself. If I ever decide to setup a media server for movies, I'll just rip my DVDs and encode them to whatever codec is best at that time.

I know I have to be missing something but...
By rushfan2006 on 9/21/2006 1:20:41 PM , Rating: 2
Knowing the majority of folks feelings towards DRM in this day and amazes me why someone hasn't just said..."ok you guys are screaming for NO DRM AT ALL and you want high QUALITY?"......"ok I'll tack a few bucks on to my movies and sell them for $20-25 per movie.."...

I can only guess because then no studio would ever agree to allow that business to resell its movies?

By Ralph The Magician on 9/21/2006 2:09:14 PM , Rating: 2
A few bucks? No. The studios control whether or not media needs to have DRM or not, and to what degree. They would be willing to sell you a non-DRM product for roughly twice the price. So, if you wanted a non-DRM file the pricing would instantly jump to $19.99, $29.99, and $25.99.

Now, you want 1080p? You better be willing to shell out a LOT more. Even compressed with H.264 a 1080p movie is around 50MB per minute. So for a two 100 minute movie, that's 5GB. Over an average broadband connection (let's say 3Mb) getting an actual download rate that's 75-80% of your theoretical bandwidth, which rarely happens, it would take you around 5 hours to download that file. So, 1GB an hour. Clearly, you can't stream this file. This would cost Apple an ENOURMOUS amount in bandwidth. I don't even want to think about it. If that's what they sold this month, that would be around 500TB of bandwidth used up if I'm doing my math right. Can you imagine what that costs? Considering that Apple makes almost nothing on the actual sale of the movie, they'd have to increase the price to cover their bandwidth costs.

When there is a large enough market of people with 3Mb/s+ broadband connections that are willing to wait 5hrs for a movie, and pay somewhere around $30 to $45 for a said movie, then you'll get your 1080p non-DRM movies.

By QueBert on 9/21/2006 2:38:31 PM , Rating: 2
you make an excellent point, but this society is "more is better!" the majority of my neighbors, and I'd guess people in general don't really know what 1080p is. And those that do, most couldn't explain anything about it to you, as they're knowledge of it is so limited. But, I think more and more of these people will start demanding 1080P to Apple. Not this year, but maybe 2007. Apple will have to respond, and figure out a way to make people happy.

my neighbor is a perfect example, he is very tech illerate, but HAD to have a top of the line XPS system with the latest and greatest graphics card. And he doesn't play a single game. He would scream at Apple to give him 1080p movies. Then come bitching to me when his 2nd external HD is full because he can't comprehend what 5 gigs of space really means. All while he's bitching at Apple, SBC & me as to why it takes 5+ hours to download the movie :)

I'd be happy with a DRM'ed movie so long as it wasn't uber restrictive and had close to DVD quality playback. Which sounds about what Apple is starting to offer so I might go check it out.

By JackTheLad on 9/22/2006 1:38:16 AM , Rating: 2
When there is a large enough market of people with 3Mb/s+ broadband connections that are willing to wait 5hrs for a movie

Well strictly speaking, you would only have to wait 4 hours and 10 minutes, then by the time you've watched the first 50 minutes the last 50 minutes will have downloaded.

Assuming in a year or two 8-16Mb/s connections are the norm, you could actually start watching the movie minutes after you started downloading it,

By number999 on 9/21/2006 12:22:55 PM , Rating: 2
For all this talk about piracy and the need of drm this just sort of shows you what people really want. Not the fact that these movies are floating around in cyberspace, of course they were, if you're willing to wait and search and search and spend hours just looking and waiting for stuff and then waiting for it to download.

What people want is a way of getting something that they want conveniently. That is where the money lies, not just the content but easy, safe and timely distribution. The market demand was there but all this BS especially around rights just makes things overly complicated. Sony got burned coming around to portable audio partially because it didn't want to help create demand for MP3's because it owns music, well guess what, people are going to dl' it anyway but look at the success of iTunes and how Sony lost major market share. The iPod of today is synonamous with portable music today like the Walkman of the 80's and 90's.

As for sharing content, I think that as it grows, new business models will take place and generate revenue. It may not benefit the content creators but overall, I think that the total economic benefits will outweigh the damage. Look at Blockbuster and the video rental scenario with the movie studio's screaming bloody murder at them, or the studio's sueing the vcr makers for "stealing money" from them.

By cnimativ on 9/21/2006 12:27:03 PM , Rating: 1
iTunes has some sort of "DRM" for the music downloaded through it.

I don't mind DRM as long as it's not intrusive like Sony's rootkit or Microsoft's WGA and time-sharing is required.

It would suck extremely if the movie downloaded through iTunes cannot be streamed/accessed from other computer on the network.

Only if iTunes offers 1080p movie download... :(

By Ralph The Magician on 9/21/2006 1:07:10 PM , Rating: 2
A 1080p movie would be HUGE. Anywhere between 5GB and 8GB per movie.

By nilepez on 9/21/2006 5:13:48 PM , Rating: 2
I'd say 4gb to just under 8GB for a 2 hour flick.

I think it's stupid to buy a stripped down movie that is probably of lower quality than a store bought disk (in this case Blu-Ray or HD-DVD) for almost the same amount.

However, if I was inclined to download a movie from iTunes or Amazon, a large file size wouldn't deter me.

Context please...
By sdsdv10 on 9/21/2006 12:43:37 PM , Rating: 3
$1M a week doesn't mean much by itself. How does this compare to other retailers? How did Amazon's new Unbox service do it's first week? How about Amazon's retail DVD business? What much do they sell per week in DVD disks? Any company with >$52M dollars/year in sales is selling a million a week. How is Apple doing compared to its competition (both electronic and disk versions)?

RE: Context please...
By Phynaz on 9/21/2006 12:54:55 PM , Rating: 2
Dude, this si the first week, with only one studio with 75 movies.

Check back in six months when there are thousands of movies available.

RE: Context please...
By wallijonn on 9/21/06, Rating: 0
RE: Context please...
By sdsdv10 on 9/23/2006 7:47:37 PM , Rating: 2
Uh, you kind of missed my point. How can I tell if $1M/week is good or not unless they put it in context. If Amazon's Unboxed service sold $25M in it's first week, then the iTunes movie lanch went poorly. If on the otherhand, Unbox sold $0.1M in its first week, iTunes did much better. The $1M/week number alone means nothing, unless I do the searching to find the necessary related data. This however should be the responsiblity of the news item author.

By Enoch2001 on 9/21/2006 2:56:59 PM , Rating: 2
You want to know what Fairplay is? Fairplay is me having stripped my entire purchased iTMS collection (over 500+ tracks) of the parasite that is Fairplay so I can now stream it over my network to my Slim Devices Squeezebox network music player. That's FAIR play.

I'll be damned if I let somebody like Apple dictate where I can and cannot listen to music that I have purchased a license to.

So I will never... NEVER ... purchase a movie from the iTMS... until QTFairUse or an equivelant frees my purchases.

RE: Fairplay?
By mellomonk on 9/22/2006 12:34:44 AM , Rating: 2
Well goody for you. Thanks to Chinese Pirates and @#$holes like you, we have to deal with ever more restrictive DRM. BTW Apple fights hard with the studios about pricing, DRM, and related. The restrictions are all due to media companies.

Well That cool and all but.
By Topweasel on 9/21/2006 11:24:28 AM , Rating: 2
I just wish that they would charge less. Like UMDs these files have little value on anything but these portable device, and therefore shouldn't be anywhere near full price. The fact that leagally even if you own the DVD you can't convert it to this file format makes the price even more insulting.

By JazzMang on 9/21/2006 11:57:38 AM , Rating: 2
Jobbs indeed.

By vgermax on 9/21/2006 12:12:46 PM , Rating: 2
The intent, as evidenced at the Showtime event, is to have the media accessible on the iPod, and extended into the living room through the iTV device. In terms of accessibility, this would serve the needs of a typical viewership. The dream of DRM free content continues to be just that, a dream. The antiquated view of technology, and content ownership by the media corporations makes digital content without a DRM wrapper highly unlikely. As for DVD-quality, 640x480 is about 38.4k pixels shy.

Somewhat interesting are that the two sets of numbers don't coincide. Disney says 125,000 movies, but Apple says $1M. The lowest priced movies are $9.99, with the upper end at $14.99. A simple unweighted average price is $12.66, so they either made closer to $1.5M or sold 79k.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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