By Richard Menta 12/27/07
In a deal that Apple hopes will bring the unsigned movie studios into the fold, the company announced that it has penned an agreement with Fox to bring movie rentals to iTunes. iTunes, which to date has only offered films for sale, will now initiate a program that will allow time-limited downloads of popular flick fare timed to coincide with their release on DVD. Prior to the announcement, Apple flirted with a $200 a share stock price before falling back a few dollars by close of trading.
To date Apple iTunes is limited to Disney and Paramount movies. Last summer NBC, who provided its more popular TV shows to iTunes, announced that the two companies could not come to a renewal agreement during a failed, and at times acrimonious, negotiations. This pushed Apple to be more agressive in their courting of other TV and film studios. The Fox movie rental agreement breathes new life into the program up and should go a long way to entice those studios sitting on the sideline to release their content to iTunes.
Of course, iTunes is the only store selling a significant volume of film content right now. Fears by the studios that Apple will gain too much control over digital film distribution as it has with music distribution has kept many of the studios at arm length. DRM issues have also held back competing services, most notably Google Video. When Google Video closed earlier this year all movies purchased ceased to work creating a trust issue that will make it harder for new download services to draw customers. As from IBB Consulting spokesman Jonathan Weitz told the Financial Times "Fox and potentially other studios are coming around to the idea that there is nobody out there to challenge iTunes."
As part of the deal Fox will also utilize Apple digital rights management scheme on its DVDs, allowing users who buy the DVD to be able to transfer content to their iPod.
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