The good stuff they're not telling you about Apple's 'same day as DVD' deal

Paul Thurrott's SuperSite Blog posted What they're not telling you about Apple's 'same day as DVD' deal

Read the full post, but here are the four points Paul makes about what you aren't being told about the iTunes 'same day as DVD' deal:

1. Apple's movies are too expensive
2. It's for purchases only, not rentals
3. It's not exclusive, and Apple wasn't even first to market
4. Apple's losing money on the deal

I am only going to talk about the top two points, since I don't think the bottom two make any difference from a consumer perspective, and then add a few of my own.

Apple's movies are too expensive
Once you look at what you can actually buy movies for at just a couple places, I think the price is on the cusp of being too expensive. Put another way, this is probably the maximum price consumers will pay for a digitally downloaded movie. Look at Cloverfield (iTS link) (Juno is now rentable since Paul's post, so I picked another movie). On iTunes, it is $14.99 to buy, plus tax depending on your state, mine (NJ) taxes digital downloads. On Amazon, Cloverfield DVD is listed at $15.99 + tax and potentially shipping, just as Juno is. I walked into Best Buy yesterday, and the same Cloverfield DVD was listed at $19.99. Even at Wal*Mart, Cloverfield DVD is listed at $15.87 + tax (also potential shipping, if you buy retail or not). Actually, the fact that Apple is paying about $16 dollars (Paul's point 4) wholesale makes a whole lot more sense now, it would appear to be the wholesale price for DVDs. What do you get for your $14.99 from iTunes? Just the movie in more ways than one because iTunes movies don't include "DVD-style features" as Paul says, aka extras, but they also don't include other annoying time wasters:

• Previews (ads) for movies you don't want to see
• Unskippable FBI warnings or movie studio logos
• Time wasting DVD animated menus
• The most nefarious, unskippable previews

I am sure there are other annoying DVD practices, but Apple has distilled watching movies down to just the essence, the movie itself, good and bad missing stuff. Even the bad missing stuff, commentaries and documentaries, most people don't watch. There are those, myself included, that do use the good extras if they like the product enough and find the time. Perhaps having these "bundled" with the movie itself will become a relic of the DVD era, with that same material released online before the movie is out, or even after. Or Apple could certainly add another purchased movie tier, one with the extras, including the extra download time that entails.

So are the movies overpriced? Based on the above, it's close. But the fact that iTunes movies aren't shareable with friends and can't be resold means these movies are overpriced, way overpriced. Either the restrictions need to be lifted, meaning I can buy a "used" iTunes movie, or I can't send the rights to my copy of the movie to a friend until they give them back or I revoke them.

It's for purchases only, not rentals
It is totally inexcusable and truly makes no sense. Well it makes sense to the studios to try to artificially inflate sales, if you can't rent you have to buy. But it just delays their revenue, I am never going to buy Cloverfield, sight unseen! What's worse, is that there are movies all over iTunes that are now to only be purchased, but not rented, like Shooter (iTS link). That movie has been released on iTunes so long, it's dropped to the $9.99 price, but still not rentable. This is really very simple, movies have to come out on iTunes so they can be rented and bought the same day as a physical DVD before consuming movies this way will or can take off. I can't have to go to my dad and explain all these crazy restrictions. The uniformity of rules and prices are a huge reason why the iTunes Music Store took off. Also, notice how there are no actual release dates on the movies on iTunes. Why is that? So you can't figure out when the price is going to drop, or become rentable? Seems likely.

On Subscriptions...
Way back in 2005, I wrote this article about renewing my Xbox Live, and here is what I thought about subscriptions in general:

...I am really done with the whole subscription model. I feel this need to try and use whatever I am subscribing to as much as possible so that I feel like if I run the breakeven analysis, I am paying a fair price..., but if I don't use it that month, I get nothing for something, and that doesn't sit well with me. A subscription is always constantly on the mental To-Do list somewhere, and I just don't need anymore of those.

And that is still largely how I feel today. I have continued to pay for Xbox Live, but for instance I have maybe used the online gameplay features I have paid for once this year. You can read most of the stuff I have ever written on subscriptions here. That said, if the price was low, maybe $9.99 or $14.99 for all you could watch that month, that is in the range where I think I could sign on, because I am pretty likely to get my moneys worth out of it. Truly though, I don't think the real solution is subscriptions, just lower prices on all digital media. When you "buy" something, you are purchasing the rights to use something as many times as you want, whenever you want, loan it to a friend giving up the second right, and that you can resell it if you don't want those rights anymore. Either the model for digital media has to accomplish everything physical did, or something entirely different has to be invented. Maybe it is subscriptions, but the subscriptions models used so far have themselves been too expensive, but you never know, maybe Apple can put something together. Like $29.99 a month for everything on the iTunes Store. Then we might really be talking...