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December 7, 2007

New technologies go through several distinct stages or inflection points in their growth; price, mass or market adoption, and commoditization. For DVD, the tipping point in cost came in the late 90’s when DVD players finally dropped below $400. Shortly thereafter, the critical mass factor kicked in…20% of homes had a DVD player. And now we have commoditization in that players can be had for $25-$50. And it all snowballed once the price inflection point was hit. I said all that to say this…iTunes movie pricing has been a thorn in the side of major studios for a while now, and it seems they’ve finally gotten Apple to back down.

“…studios such as 20th Century Fox have been successful in convincing Apple to pay a higher wholesale price of $15 per movie—just $3 less than the average price of a brick-and-mortar DVD. What this means for the actual selling price of a movie in the iTunes Store remains to be seen, but this deal apparently secures more studio support for doing things like including an iTunes-optimized copy of the movie on store-bought Enhanced DVDs.”

The good news is you’ll probably have greater selection of digital movies, as it is more attractive for studios to come to the party.. The bad news is that this will make the decision to buy online less clear cut from a monetary standpoint, and quite possibly will limit adoption.

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Originally posted by Matthew Jeppsen from FreshDV, remediated by yatta on Dec 7, 2007 at 2:10 PM


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