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The movie download market got a big boost this week with two major players signalling an end to the gap between DVD and download release dates. Apple has completed deals with most of the large film groups, meaning they can now sell movies through the iTunes store on the same day DVDs hit shelves. New releases on iTunes will cost $14.99 while older titles will cost $9.99. Meanwhile, Warner Brothers is to axe its rental-only period for movie downloads. Internet users will now be able to buy a downloaded movie on the same day as it becomes available for online rental.
Apple will likely use its new system to push sales of its newer iPod players (which have better video capabilities) and to increase the audience for Apple TV, a service that allows users to easily watch downloaded films on their television sets. It's a big change to the industry; previously, online release dates could be between 30 and 45 days after the DVD release. This was partly due to the theory that people might be more tempted to splash out on discs rather than wait for the release date, and partly an attempt to keep DVD retailers happy. However, it now seems movie studios believe they can make more cash by having a title available in all formats straight away. This week Jeff Bewkes, the chief executive of Time Warner (which owns Warner Brothers) revealed that downloaded titles can make three times as much profit for studios than DVD releases. (Source: nytimes.com) Some analysts believe that if the practice catches on across the industry, it could boost sales. This makes sense: Apple's online music sales got a big boost when they struck deals to sell albums on iTunes at the same time as the CDs hit stores. (Source: reuters.com) It will also be a useful battle in the war on piracy. No longer will there be such a draw for pirated movies that beat the DVD release date by weeks. Now that legal downloads will be available, some people who would previously have downloaded an illegal copy may be persuaded to get it from a legal source.
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