IP Democracy: Does Hollywood Fear Apple's Power?

Just yesterday I was wondering why the Hollywood studios are reportedly excited about a deal to launch a movie rental business over iTunes. Apple has amassed a lot of power in the entertainment business with its little iPod and Hollywood hates it when anybody else has power.

Now, the LA Times comes along with this piece today that underscores Hollywood’s concerns about giving Apple too much leverage, but the focus is not on the iPod or the iPhone but on Apple TV.

Despite Apple TV’s ability to bypass broadcasters, cable operators and DBS providers, thereby giving Hollywood an unencumbered path to the viewer, Hollywood is afraid of the gizmo, a factor that slows down the sale of recent hit films via iTunes.

But despite Apple TV’s promise, some of the biggest movie studios won’t sell their films through Apple’s iTunes store. They fear that the Cupertino, Calif., company will come to dominate online distribution of movies as it now controls more than 70% of the digital-music market in the United States.

Another big gripe is that Apple won’t use detection technology to block pirated films on the iPod or Apple TV — the studios have apparently made this outrageous demand of Apple. And, of course, Apple tries to keep uniform, relatively low prices on its entertainment products. Hollywood fears that low-cost iTunes distribution (or any form of Internet distribution, really) will damage the high-margin DVD business.

Posted by Cynthia Brumfield on June 11, 2007 9:29 AM to IP Democracy