iTunes To Lose Money On Same Day As DVD Deal
Apple recently came to an agreement with a group of film studios including the 6 largest that would enable the Cupertino firm to release movies via iTunes the same day that they are available on DVD. The problem is that Apple might actually be taking a loss on them for the short term:
“Apple said that starting this week, iTunes customers will be able to purchase newly released movies for $14.99, while most catalog titles are $9.99.
The Wall Street Journal reported that Apple is paying the studios nearly $16 for each sale, but a source close to the negotiations told CNET News.com that Apple is paying closer to $15.50 than it is $16.”
It’s not unheard of for companies to take a loss on new products, especially if they think they can eventually charge more and/or negotiate cheaper rates from suppliers.