Disney in love with iTunes
Bob Iger announced in an exclusive online interview with the Financial Times that in just three months Disney was able to sell 1.3 million downloads of movies on iTunes with the online-release of Pirates of the Caribbean: Dead Man’s Chest and Disney Pixar’s CARS pushing the number of downloads past the 1 million treshold and effectively dubbling the download numbers over the Christmas season. While the download of full length movies is a new offer of iTunes, shorter tv programming is already available for one year - a period during which Disney was able to count more than 20 million according downloads.
Still other big studios are reluctant to offer their movies on iTunes. Which is frequently blamed on fears (or even threats?) of large motar-and-brick retailers such as Wal*Mart and Target fearing that downloads might have a negative impact on DVD sales. And in fact the movie industry is trying to prepare for a slowing DVD market after years of exploding sales. The Financial Times adds that the research firm Pali Capital “expects 2007 to be the first year that spending on DVDs in the US declines”.
From an external point of view of a non-industry-insider to me it seems logical that potential customers decide to either download a movie or buy it on DVD but rarely will download something that they would not have bought on DVD. Bob Iger on the other hand sees things different and told the Financial Times: digital distribution is “creating more consumption of media. The message that we deliver to our traditional [brick-and-mortar retail] partners is that the pie is getting bigger”. Well, time will show … But I am not sure he is believing this himself, as he also adds “If we don’t put our content on these platforms, which the consumer has obviously embraced, other entities will create content and fill that void”.
Just let me add one thought from the point of view of a Disney-fan living OUTSIDE the US and Canada: iTunes (due to the difficult legal situation with distribution rights of many movies and songs being held by different entities in the different states) clearly differs between the different states its customers reside. The effect is that on-US customers can’t buy anything on the US-iTunes (unless customers go to length like obtaining pre-paid cards from the US) and have to rely on their own local iTunes-shop version. Since its major push on iTunes The Walt Disney Company unfortunately is not really cartering for us international fans. Many rare and exciting releases such as the original New York cast recording of the Finding Nemo musical from Disney’s Animal Kingdom at Walt Disney World are not available on the iTunes-shops outside US/Canada. While this might seem like a minor issue, one shouldn’t forget that many Disney releases on iTunes are targeting the fans - and by excluding the non-US fans the potential number of sales / downloads goes down. With CD and / or DVD releases on the other hand fans could just order the US-releases in an online-shop no matter where they lived.
Therefore, unless The Walt Disney Company goes to the length of clearing the legal hurdles and uploads the material at least on all different iTunes-shops (which would still exclude fans in many countries without dedicated iTunes-shop) I think the emphasize on iTunes is a risky business decision. While in the movie segment so far the iTunes-releases are also available on DVD in the music area more and more material released by Walt Disney Records on iTunes is no longer issued on CD thereby excluding international fans and degrading them to fans of a second class. And I am not even touching on the problems of the DRM and limited sound quality of music downloads from iTunes (and the other major online-download-shops)…