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Apple are looking at producing a new video iPod. According to an Apple designer the device will have a bigger screen and more memory, however the problem for Apple is retaining the size of the device while also incorporating the Apple wheel navigation technology that has made the iPod so succesful.

Insiders say that Apple boss Steve Jobs is keen to release a new portable movie player by next year and a report in the trade newspaper Variety says Apple is in negotiations with “most” major motion picture studios to iron out the details for content and bring the inevitable to fruition.

According to the report, price is holding everything up.

Steve Jobs is allegedly pushing for an across-the-board price of $9.99 per film, but the studios aren’t biting, saying that new releases should cost more than older films. Hollywood movie executives claim that Jobs is really pumped up over the potential of movies.

“He came in with a lot of bravado and said, ‘We set our mind to what we were going to do in the music business and revolutionised it, and now we want to do the same thing with film,” recalls one studio person close to the talks for movie downloads.

Movie execs anxious to beat piracy are debating how much power to give Jobs, who recently was successful in strong-arming music executives into sticking to a flat $.99 (USD) pricing model per song. Movie execs are hoping to have a tiered model, whereas Jobs is insisting that movies be sold at an easy-to-remember $9.99 (USD).

On March 14th, Apple made its first full-lenth TV movie feature available on the iTunes Music Store at $9.99 USD. The movie seemed to indicate that much of the technical groundwork had been laid for iTunes movies, with only content left to be obtained.

Also complicating the deals: The studios are working out terms with a host of other distributors, including Amazon, Movielink and BitTorrent, in part to make sure that one company does not dominate. It seems that none of the studios wants to be first in making a deal with Apple. Disney would be the logical leader, but even they are cautious, fearing it will look like in-house synergy rather than a business decision.

Movie studios have been rolling out their own movie services in past months, including Starz’s Vongo (subscription-based) and Universal’s own download-to-own store.

Will Hollywood Join the Digital Media Revolution? As is typical for the maker of the fashionable and ubiquitous iPod, the company had no comment on the report.

“Apple loves secrets,” commented Ina Fried, senior writer for CNET.com. “Apple loves to be the one to make its own news.” Fried says it’s no shock that Apple is working on bringing movies to iTunes, but believes they may be dragging their feet with good reason.

“Apple is moving into video at a slow and measured pace,” Fried said. “It still takes a lot of time to download video.” But it’s the movie studios which may hold the true power in this deal, as they don’t want to jeopardize the money brought in from already lucrative revenue streams like DVDs.

“Hollywood wants to augment what they’re already making from DVDs,” said Fried. Still, Fried says studios know they have to do something to pull together a digital download model before the pirates begin taking an even bigger chunk of the industry’s revenue than they already do.

She finds it hard to believe that an industry that has thrived on a variable price structure that allows them to sell DVDs of one caliber for $10 and of another for $30 would suddenly drop it for the across-the-board fixed pricing iTunes is known for.

Apple’s unwillingness to stray from their 99 cent per song price created some headlines earlier this year, when members of the recording industry tried to renegotiate the price of songs and albums before agreeing to a new contract.

In the end, it was the recording industry that caved, signing a new one-year licensing deal with Apple in April.

Another New iPod?
Fried believes that if Apple and Hollywood are able to reach an agreement to bring movies to iPod owners, we may be looking at yet another iPod contraption.

“It’s hard to image Apple having a feature film business and not having some kind of device to take advantage of that,” she said. “I don’t get a sense that the iPod has become a way for most people to watch video.”

Although the video iPod plays video, Fried points out that it doesn’t do it very well and it’s certainly not capable of playing high-quality films. Over the past months and years, Apple technophiles have created their own mock-ups of what a true video-playing iPod might look like, but to date, the company hasn’t announced any new iPods.

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