9.20.2006
Disney Sells 125k iTunes Movies
Apple has been selling movies in iTunes 7 for a full week now. How are sales? According to The Wall Street Journal, Walt Disney says they've sold 125,000 movie downloads totaling $1 million in revenue. Not bad for just 1 week."This is just the beginning," Disney CEO Robert Iger told Wall Street analysts at a conference Tuesday. "[iTunes] has proved [to be] a great business because there's no marketing or other expenses involved in selling digital downloads except the cost of encoding." Iger went on to predict that iTunes would help generate $50 million in additional revenue for Disney this year.
Walt Disney Pictures, which includes Pixar, Touchstone Pictures and Miramax Films, is currently the only major movie studio participating on iTunes.75 Disney movies, including such hits as Pirates of the Caribbean, The Incredibles, Good Will Hunting and National Treasure, can currently be purchased on iTunes. The other major movie studios are exploring partnerships with iTunes competitors or have disagreements with Apple over licensing fees. Disney's success this week will probably help convince the other studios that participation on iTunes is probably a good idea.
Disney was also the first to offer TV shows on iTunes a year ago from their American broadcast network ABC.
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Pimpin' Thoughts:
Hmm... I really doubt the other movie/music studios are kicking themselves over this. In fact... they are probably congratulating themselves that they didn't have to risk their own capital in developing their own online media stores. Apple did the work for them, and all these movie studios now have a reliable outlet that will help them to continue to sell their product.
Warner/Sony/Universal etc. have never had to open their own retail stores to sell their products before. WalMart and MusicWorld are happy to buy the product from them to resell in their own stores... so why would they ever spend the time trying to develop their own online store? The success of the iTunes store has not taught these studios any kind of "lesson." The success of the iTunes store has only taken profit potential from WalMart and MusicWorld et al.
The movie studios are probably really happy that there is now another video format where they can resell the same old movies again.... and then when iTunes 8 premiers, and Apple offers movie downloads at even higher quality... the movie studios will rejoice as they resell the SAME old movies again... and again 3 years later in HD... and again 3 years later in SD with special features.... and after that, HD with special features. Then collectors edition. Then the criterion edition....
etc. etc.
Warner/Sony/Universal etc. have never had to open their own retail stores to sell their products before. WalMart and MusicWorld are happy to buy the product from them to resell in their own stores... so why would they ever spend the time trying to develop their own online store? The success of the iTunes store has not taught these studios any kind of "lesson." The success of the iTunes store has only taken profit potential from WalMart and MusicWorld et al.
The movie studios are probably really happy that there is now another video format where they can resell the same old movies again.... and then when iTunes 8 premiers, and Apple offers movie downloads at even higher quality... the movie studios will rejoice as they resell the SAME old movies again... and again 3 years later in HD... and again 3 years later in SD with special features.... and after that, HD with special features. Then collectors edition. Then the criterion edition....
etc. etc.
Holy crap! Considering only Disney owned movie studios were available on iTunes at the launch I expect the other major studios to be calling Steve Jobs in 3...2...1...
Studio Exec: "Steve, Hey! so uhhh...weve been thinking about putting our movies on iTunes and have decided to do it! So how freakin fast can we get them up there? Like....now?"
Exact same thing happened when they added TV Shows. When will these studios learn?
Some perspective on the numbers
$1million/125k downloads= an average of $8.00 for Disney. Apple is taking about $2.00. Anyone know what the bandwidth cost would be per download? About $0.25-$0.45?
17,850 movies per day
744 movies per hour
12.4 movies per minute.
Cinema now has a run rate of only 75,000 downloads a month. And they have 20x as many movies to choose from.
This is a pretty amazing run rate considering this is the first week with only 75 titles. This is great news.
Studio Exec: "Steve, Hey! so uhhh...weve been thinking about putting our movies on iTunes and have decided to do it! So how freakin fast can we get them up there? Like....now?"
Exact same thing happened when they added TV Shows. When will these studios learn?
Some perspective on the numbers
$1million/125k downloads= an average of $8.00 for Disney. Apple is taking about $2.00. Anyone know what the bandwidth cost would be per download? About $0.25-$0.45?
17,850 movies per day
744 movies per hour
12.4 movies per minute.
Cinema now has a run rate of only 75,000 downloads a month. And they have 20x as many movies to choose from.
This is a pretty amazing run rate considering this is the first week with only 75 titles. This is great news.
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: 12:38 PM
: 12:38 PM
I don't see Netflix going away anytime soon. Disney films will sell, as they have a long shelf life, since kids like watching them over and over again (thus providing a good ROI). A movie such as, say, Black Dahlia? Chances are people won't buy it--but a lot of people would like to rent and watch it at home.
And hey, who's to say that Apple won't do rentals at some point as well?
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And hey, who's to say that Apple won't do rentals at some point as well?
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: 1:59 PM
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