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The Walt Disney Company says it has sold
125,000 digital copies of its movies -- less than one week after making
the films available for download through Apple Computer Inc.'s iTunes
store. At prices ranging from $9.99 to $14.99, the new service has already
generated more than $1 million for the company, which is best known for
its animated feature films.
Anyone with a fast Internet connection can now
watch his or her favorite Disney film on a portable
video device such as Apple's iPod. Industry analyst Aram Sinnreich says Disney's success in the first week
of its online venture shows there's a large market for online
distribution.
"The reality is that consumers have already gotten hip to online video,
downloading videos and TV shows like gangbusters [in a big way]. They are
not going to stop anytime soon."
So far, Hollywood has resisted the idea of distributing movies over the
Internet -- arguing that making near-DVD quality films available online
was an invitation to piracy. But Disney, which currently has 75 titles
available on the iTunes website, says online sales have not hurt the sale
of its DVD's.
Company president, Bob Iger says, "Any time you give people more
ways to buy something and more ways to actually consume or watch
something, you're going to increase consumption, so I believe the pie is
going to get bigger."
Iger projects revenues of up to $50 million in its first year and says
plans are in the works to distribute more films on the company's website.
Analysts say Hollywood studios and retailers are watching closely. Online
retailer Amazon.com has unveiled its own digital movie service, which will
offer new and older films along with TV shows.
"I think the promising signs from iTunes and other online video
retailers as well as the tremendous uptick in consumer interest in
online video has convinced them they finally have to take the plunge (jump
in)," says Sinneich.
But some studios are taking a more cautious approach to digital
distribution to appease retailers such as Wal-Mart. The global retailer is
responsible for about 40 percent of the DVD's sold in the United States.
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