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Apple Negotiates iTunes Movies Service

Apple has found the wonderful world of online music consumption and has made a successful business out of it. Now the computer giant is looking to expand their online services to include another market that many users are enjoy through online piracy ? Movies. Apple launched an iPod-friendly TV program and focuses on the next stage of its iTunes service.

Apple is already negotiating with top Hollywood studios such as Twentieth Century Fox, Warner Brothers, Universal Studios, and Disney. "Studios will demand flexible pricing and licensing models, which Apple has been reluctant to explore with audio content," said Nitin Gupta, a Yankee Group analyst.

Apple CEO, Steve Job, proposed a flat rate of $9.99 for all content, but the studios rejected his offer and they are aiming for a variable-pricing structure. Pricing is the most important thing as users are able to download the content freely from illegal sites. iTunes is successful because it offers people a legitimate service that brings them the same content that they would consume free. iTunes offers reasonable prices and if Apple asks for higher rate people will abandon the service.