Apple keeps adding more studios to iTunes. They seem to be thinking that it’s best to get the stuff from the producers.
The economics in the tv & movie industries are quite complicated. Someone has a good idea for a script, someone else writes in, again someone else pulls a crew together, one person directs, etc. Lots of people are always involved. And someone has to pay for the project up front.
Distribution is what brings the money back. And distribution is very hard to do well since the market is so incredibly competed. So you need muscle. The guys with muscle can pay for the production and gets a very good cut (if not all) from the distribution sales.
Networks make some shows themselves, but usually they buy them from smaller production companies. At least the ideas for the shows. Then they can cash in.
When people started to watch tv shows and movies over the internet, a shift was beginning to show in the marketplace. Digital distribution is much much cheaper, it’s global, and you need to be big. If people know you have the biggest store, they will come to you.
And that’s where Apple comes in. They could be the new major distributor of movies. First they befriended the networks and big movie studios that owned and sold all the blockbuster productions. But in the end, they are going to compete with these guys. What Apple really wants is get the rights to sell the productions as cheap as possible, so it’s becoming time to go directly to the production outfits. Of course, among these are also the current big networks and studios, so they are welcome too. NBC realized what was going down, they saw the future coming, so they left iTunes (maybe wanting a bigger cut, who knows, but clearly not getting it). Fox, both a network and a big studio, thought it best to be friends with everybody at the moment, so they stayed on in iTunes but also joined Hulu.com, NBCs new online distribution hub. Fox doesn’t stand to loose as much as NBC if people would increasingly get their content from the web instead of watching TV, since they produce more content themselves that they can sell through iTunes. Sure, NBC has a few hit shows now, but in a few years things might look different.
We’ll see how it goes. Some people don’t give Hulu.com a chance of surviving even a year, even if it’s well executed and good looking. But Apple badly needs the content. They might have to make a compromise. And it is not a farfetched idea that they could become a very dangerous competitor to the TV networks in the future.
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