Apple who are struggling to stop consumers deserting their proprietary eco system, are now talking to Hollywood Studio’s to get access to movies two weeks after they have been released to Cinema’s.
Apple is also struggling to beat Spotify in the Music streaming market despite attracting 20 million customers globally during the past 18 months.
What Apple is hoping for is that their iTunes platform is seen, as the ultimate source for content.
One of the concerns about iTunes is whether it will be a secure platform for delivering movies that are still in theatres, movie industry executives have said. While Apple encrypts iTunes video files so they can’t easily be duplicated, it’s possible to use a camera to record a movie playing on a TV screen.
A leak of picture that’s still in theatres would jeopardize returns for the studios and cinema owners.
To compete with popular music streaming services such as Spotify and Pandora, Apple acquired Beats Music in 2014 and built its own streaming music service, the move cost them over US$3 Billion dollars.
What Apple missed out on was surge in streaming video propelled by Netflix and Amazon.com who will shortly launch their Amazon Prime platform in Australia.
What is becoming evident is that content is fast becoming critical to Apple to hold onto their current customer base who are now dumping Apple products for those powered by a Google OS.
Several of the big Hollywood Studios have said that Apple is trying to cut a deal to get access to early content, they include 21st Century Fox, Time Warner, Warner Bros. and Universal Pictures.
These studios have confirmed that they are looking to offer high-priced, home-video rentals of new movies shortly after they open in theatres.
The big question is whether Apple will get exclusive access with both Google, Amazon and Netflix also looking to cut new deals with Hollywood.
According to Bloomberg, some studio executives have been pushing to allow home rentals as early as two weeks after a release to cinema’s.
The move could be a blow to Hoyts and Greater Union in Australia.
What Apple is hoping for is that they can reenergise their flagging iTunes store.
While the iTunes store helped, Apple build a dominant role in music retailing, the company hasn’t carved out a similar role in music and video streaming.
The studios could end up choosing another technology platform instead of Apple to deliver movies more quickly to households, if this happens it could deliver a serious blow to Apple who are currently having to manage falling iPhone, iPad, and MacBook sales.
Hollywood studios typically give theatres exclusive rights to new movies for 90 days or more before issuing them on DVD or making them available for online purchase.
With cinema attendance, mostly stagnant and home-video revenue flat in recent years, film companies are under pressure to find new areas of growth.
Earlier availability of new movies could satisfy a growing consumer appetite and deter piracy, Warner Bros. chief Kevin Tsujihara said.
One option is a premium-priced online rental for new movies, at prices of $25 to $50, a possibility under consideration at the studios, according to people with knowledge of the matter.
Theatre chains have battled to keep their exclusive hold over new movies, in some cases boycotting films that were released too soon for home viewing.
The founder of Napster, said earlier this year that he was trying to create a new home-video service, called Screening Room, that would offer viewers movies on the same day they were released in theatres. The company has also discussed offering movies at home after 14 days in theatres, two of the people said. A spokeswoman for Screening Room declined to comment.
Screening Room uses a watermarking technology that’s supposed to prevent piracy by making it possible to track down the source of a leak.
Eddy Cue, Apple’s senior vice president for software and services, has taken small steps toward developing video content with a series of app- and music-based shows, while efforts to obtain streaming rights to films and TV shows have thus far been unfruitful.
This month Apple will release a new app, dubbed simply TV, that will serve as a hub for users to watch content from several different apps. Netflix is notably absent.
Apple is also looking to get a return on the $3 Billion they spent buying up Beats whose headphones are the most returned headphones at Australian retailers.
Apple Music has said it will continue to tie artists to exclusive deals, as its number of paid subscribers passes 20 million for the first time.
There has been criticism that putting albums behind a streaming paywall harms fans and, ultimately, artists.
“I don’t think exclusives or promotions are anything new,” Apple Music Boss Eddy Cue said.
“They were done in the record business, they were done on iTunes, now they’re being done on streaming.”
He continued: “The exclusives are relatively short term – it’s not something that stays on any one platform. But being able to do unique things with artists is a good thing and I think that’ll continue.”
Cue said Apple had hosted 70 exclusives over the last year, six of which topped the US Billboard charts, including Drake’s Views.
Apple also streamed Chance The Rapper’s Colouring Book, which made history on Tuesday by becoming the first album to be nominated for the Grammys without being available in shops or download stores.
Recently Universal Music Group chief executive Lucian Grainge recently called for an end to exclusives.
And Kanye West has said streaming companies are engaged in a testosterone-fuelled battle that was ruining the music industry – despite releasing his own album as an exclusive on Jay Z’s Tidal service.
Cue told the BBC recently that exclusives were “not the answer to everything” but they “served their purpose”.
One purpose is undoubtedly to attract new customers – and Apple has gained three million new subscribers in the last three months.
The tech company said 60% of its users had not downloaded a song from the iTunes store over the last 12 months, suggesting they were a “whole new audience”.
Launched in June 2015, Apple Music has swiftly become the second biggest player in the market – behind Spotify, which now boasts 40 million subscribers.
Their popularity has helped reinvigorate the music industry, which recently saw its first big gain in revenue for 20 years.
The increase was largely due to a 45% increase in streaming revenue, with sites like Apple, Deezer, Tidal and Spotify charging $12-15 dollars per month for instant access to millions of songs.