Disney CEO Bob Iger said during the company’s fourth quarter conference call that the movie studio has sold nearly a half million movies on the iTunes Store since they announced their partnership with Apple, signaling a strong presence for downloadable movies on iTunes despite having very limited content so far. Disney also says that it expects to generate $50 million in revenue during its first full year on iTunes.
Within the first week of the partnership, which was announced during Apple’s "It’s Showtime" event on September 12, Disney announced that it had sold 125,000 movies and cleared $1 million in revenue. Since then, the numbers have continued to grow over the last eight weeks, averaging roughly 62,500 movies sold per week since the partnership’s inception.
Rumors claim that Apple had originally intended on launching with multiple movie studios on board, but that all but Disney backed out at the last minute due to threats from retail powerhouses such as Wal-Mart. Wal-Mart reportedly threatened to cut orders for certain movies during the holiday season if they did not receive the same deals from the studios as iTunes was getting, and the studios allegedly bowed to the pressure.
Disney has yet to see any pressure from Wal-Mart and it seems that other studios are close to signing on with the iTunes Store after seeing Disney’s success. There are now rumors that 20th Century Fox is about to become the second studio to sign on with Apple, which will be a welcome addition to iTunes for many potential buyers.
Microsoft surprised us this week with the announcement of their own movie download service through Xbox Live, and so far seems to have a decent collection of movie studios on board. The difference, however, is that the Xbox’s movie service is rental only and is expected to be somewhere between $3 an $7 per download with some downloads being available in HD.
As the movie download market matures, we’ll get a better idea of which model consumers prefer: $3-7 rentals or $13-15 sales.