Control, Distribution and Profit [7:46 am]
Some movie fans hope Apple TV will do for Internet video what the iPod did for digital music.
That’s precisely what some Hollywood executives are afraid of.
The device from Apple Inc., which debuted this spring, aspires to bring movie downloads from the geeky fringe to the living room. Touted as elegant and easy to use, Apple TV lets movies and TV shows bought through Apple’s iTunes online service — plus, later this month, videos from YouTube — pass from computers to television sets. It also lets users watch their digital photos and home videos on their TVs.
But despite Apple TV’s promise, some of the biggest movie studios won’t sell their films through Apple’s iTunes store. They fear that the Cupertino, Calif., company will come to dominate online distribution of movies as it now controls more than 70% of the digital-music market in the United States.
If it does, that could drive down the prices of newly released DVDs, which is great for consumers but bad business for the movie studios. Even more threatening to the studios is the possibility that iTunes could kill the premium they hope to collect for the new generation of high-definition movie discs.
[...] Their major gripe is with the iPod, which plays pirated versions of movies and television shows that can be obtained at illicit file-trading sites or transferred to computers using software that pries the content off DVDs. Piracy experts say Apple TV could work the same way to transfer bootlegged movies and shows from the computer to the TV.
Apple says it trusts its customers to do the right thing, but movie studios don’t think that’s enough. So some are holding up licensing deals, trying to pressure Apple to take more aggressive steps to combat piracy. For example, they want Apple’s devices to look for a unique identifying code, known as a watermark, on digital video to certify that it is a legitimate copy — and to refuse to play the film when that watermark is absent.