Apple nears deal to rent films two weeks after release - Coul that deter piracy?

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Apple and Comcast are both in ‘pressing’ talks with movie studios to make films available for home viewing sooner than ever before.

After months of negotiation, the two sides are nearing an agreement on a system that would allow viewers to rent movies currently showing in cinemas only two weeks after release, for a cost of $30 to $50.

The plans are moving forward despite objection from theaters and could be finalized as early as next year.

Warner Brothers and Universal Pictures (which is owned by Comcast) are some of the biggest proponents willing to ignore theaters and move forward with a deal for what they’re calling premium video on demand, or PVOD, according to Bloomberg.

Lions Gate Entertainment is also interested along with Hollywood Studios (with the exception of Walt Disney Co.), which is said to be ‘eager’ about the idea and has discussed sharing a split of the revenue with theater chains if they approve the concept. 

‘You’re going to see some tests done at least in some territories in the near future,’ Lions Gate CEO Jon Feltheimer said, adding he believes PVOD would be introduced in the next 12 months.

‘I hope that will happen, I think it will be great for the business.’

Because of antitrust laws, the theaters and studios must all negotiate separately. 

The exact terms for the concept vary between the different firms involved, with some film studios discussing a release date of about 17 days after debut for about $50 and others looking into four to six weeks from release for $30. 

Some are also mulling the idea of making the early digital downloads available in other markets prior to releasing them in the US, which is the biggest home-entertainment market.

According to the sources, theater executives are touting that 50 percent of a movie’s revenue now comes from its theatrical run, which has led studios to counter this is only because of the switch from DVD to digital in home viewing.

While DVD sales fell 10 percent and rentals fell 20 percent, digital sales rose 8 percent. 

Theaters are seeking a long-term commitment for splitting the revenue that could be for as many as 10 years.

The studios have rejected this and are looking for other ways to move forward. 

Even if theaters don’t give their blessings, however, some studios are mulling giving an ultimatum: ‘agree to a deal, or we’ll start selling the movie downloads anyway.’

But that could get messy – the theaters could strike back by boycotting films that would be released via early digital download. 

Michael Pachter, an analyst at Wedbush Securities Inc., told Bloomberg it’s a bluff and the studios won’t move forward until an agreement with theater chains is reached.

‘They always claim they’re going to do something dramatic, and then they don’t,’ he told Bloomberg. 

Some studios, however, are not being so aggressive and don’t wish to get into a heated battle with the powerful theaters.

The tensions are further worrying investors, who have already been concerned about sinking shares. 

Three of the top movie theaters have been facing declining revenue – AMC dropped as much as 8.4 percent Friday, with Regal Entertainment Group falling 5.4 percent and Cinemark Holdings Inc. dropping 3.2 percent. 

The recent move by Disney – which is not involved – to create its own steaming service is also adding pressure for the firms to reach deals, the sources said.

Aside from wanting to stream on its own platform, sources said Disney is focusing on releasing fewer, bigger movies that are produced specifically the big screen rather than home entertainment. 

Talks of Apple’s hopes to do deals with Hollywood studies to bring movies to iTunes shortly after theater releases was first revealed in December.

21st Century Fox, Warner Bros. and Universal Pictures all confirmed they were looking to offer high-priced, home-video rentals of new movies shortly after they open in theaters.

It was believed the movies could cost between $25 and $50, which is in line the prices most recently being discussed.

‘Some studio executives have been pushing to allow home rentals as early as two weeks after theatrical debuts and are considering a deal with iTunes as one option,’ said Bloomberg sources, who asked not to be identified because the discussions are private.

Hollywood studios usually give theaters exclusive rights to new movies for 90 days or more before allowing them to be released online or on DVD.

However, poor attendances have made Hollywood bosses keen to explore other options.

At the time, sources say it’s already gaining ‘serious interest’ from several major studios. 

Earlier availability of new movies could satisfy a growing consumer appetite and deter piracy, Warner Bros. chief Kevin Tsujihara admitted last week. 

The news comes as it was revealed Apple’s online streaming service now has 20 million paying customers.

The service, which launched in 2015, has added subscribers in an unprecedented number as it battles Spotify, which boasts over 40 million subscribers, and others including Tidal and Amazon. 

Apple is also hoping a new app could change the way we watch TV – and kill off cable companies.

Tim Cook unveiled the firm’s new TV app at a special event in Cupertino last year, revealing it will be available on Apple TV, iPads and iPhones in December for US users.

It will allows users to easily search shows being shown live and those from on demand providers such as Hulu – but not Netflix or Amazon.

‘We want Apple TV to be a unified TV experience,’ Apple CEO Tim Cook said at the event, before making the surprise announcement.

Using the app, users can search for their desired content in the app, which then presents a lists of streaming platforms where it can be viewed – similar to a TV guide. 

The can either type or use Siri, Apple’s voice recognition system. 

And when your show or movies is found, TV lists all the places it can be viewed.

‘We said the future of TV was apps,’ said Cook.

‘We now have 8,000 apps across every category, and over 1600 apps for video content.’ 

The app also tracks what content viewers watch and uses the data to formulate recommendations.

‘Using apps on Apple TV, iPhone and iPad has become the primary way for so many of us to watch television,’ said Eddy Cue, Apple’s senior vice president of internet software and services.

‘The TV app shows you what to watch next and easily discover TV shows and movies from many apps in a single place.’