Amazon, iTunes price downloads aggressively
DIGITAL: Online sites lower tags on movie, TV shows
By Jennifer Netherby -- Video Business, 8/21/2009
AUG. 21 | DIGITAL: Just as DVD retailers get more aggressive in cutting prices on discs, Apple iTunes and Amazon Video On Demand are getting fierce in promoting and slashing prices on digital movie and TV downloads.
Both sites have begun running near regular promotions selling catalog films for less than $5 and renting back-catalog movies for as little as 99¢, well below digital competitors.
Amazon, meanwhile, is now pricing new releases on par with iTunes at $14.99, below the site’s previous new releases tag of $17 and often below the price the site sells those same movies for on DVD and Blu-ray Disc.
The two sites also are quickly dropping prices on select new releases: The Curious Case of Benjamin Button, released in May, is selling for $9.99 on both sites, lower than the $14.99 price tag for other new releases that debuted around the same time. Amazon is selling the single-DVD version of Benjamin Button for $14.99 and the Blu-ray for $24.49.
Amazon also has slashed the price of digital downloads of Slumdog Millionaire to $12.49 to $13.49 and Knowing to $13.99 to $14.49, lower even than the $14.99 iTunes price for those titles.
Neither Amazon nor Apple representatives commented on the price drops.
An executive at an independent studio said digital companies are engaged in a land-grab and trying to reach customers any way they can.
Other competitors—CinemaNow, Blockbuster, Vudu, etc.—haven’t been as aggressive, running fewer promotions and mostly pricing new releases above $17 and sticking to the typical $9.99 price tag on catalog downloads and $2.99 rental price for older films that has been the de facto industry standard across movie download sites and among VOD operators.
Blockbuster offers some catalog film downloads for $9.99 and new release downloads for $17.99. Vudu sells new release downloads for $14.99 to $19.99.
Amazon has been aggressively competing with iTunes in the digital music space, slashing prices of albums and singles in its MP3 store to try to grab market share from iTunes, FutureSource analyst David Sidebottom said.
“I wouldn’t be surprised if they did the same on the video side,” he said. However, Sidebottom doesn’t think Amazon will be as aggressive in video as the site has been in music because studio deals might limit discounting to some extent and because video tends to be higher priced than music.
Amazon and iTunes have been particularly aggressive with catalog title promotions. ITunes is now offering a “Back to School” promotion, with movies School of Rock, Clueless, Good Will Hunting and others available as a download for $4.99.
ITunes has a continual promotion running with a category of “Films under $5 and $6,” including such catalog films as Rosemary’s Baby ($5.99), Meet Bill ($4.99) and Made ($3.99).
Amazon VOD has its own category of “Movies for $5.99,” which includes Terminator 2: Judgment Day ($4.99) and Troy ($5.49).
But some of the best deals are on TV series, an area in which both sites also face online competition from ad-supported video sites Hulu, TV.com and others. Amazon is selling full-season downloads for as little as $5, the price for NBC hit series 30 Rock: Season 1.
ITunes is selling episodes of NBC shows for 99¢ in one promotion (below the usual $1.99) and “Starter Packs” of Fox shows, with the first five episodes of a show for $4.99.
