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Facing Competition, iTunes Revs Up Its Film Section
By DAVID M. HALBFINGER
LOS ANGELES, Oct. 22 – When Edward Burns's latest romantic comedy, "Purple Violets," had its premiere at the Tribeca Film Festival in April, it drew positive reviews, but only lukewarm offers from movie distributors.
Mr. Burns, the director of indie favorites like "The Brothers McMullen" and "She's the One," but whose latest movies have not done as well, knew from experience how that story would end, he said: "Not enough money to market the film, not a wide-enough release to even make a dent in the moviegoing public's consciousness."
So he and his partners, who spent $4 million making "Purple Violets," instead are gambling any chance of recouping their investment on a distribution deal that involves not a single theater. On Nov. 20 the film will go up for sale exclusively on iTunes.
It's the first time a feature film will make its commercial debut on Apple's digital download service, but only the latest deal aimed at winning attention for the iTunes movie category.
On Sept. 25, for example, iTunes began distributing a 13-minute short film, "Hotel Chevalier," a prequel of sorts to Wes Anderson's "Darjeeling Limited," as a publicity vehicle for that Fox Searchlight feature. The short, offered free, has since been downloaded more than 400,000 times and has helped drive the early box office performance of "Darjeeling," the studio says. That will no doubt gladden the hearts of Apple executives. A year after the Walt Disney Company became the first major studio to offer its movies on iTunes, Apple admits that iTunes is struggling to achieve the critical mass in film content that it has long held in music, and is facing stepped-up online competition from rivals like Amazon Unbox, Netflix Watch Now, Jaman and GreenCine.
Though Disney has embraced iTunes, most of the other major studios have balked at Apple's refusal to work with them on flexible pricing or to accede to their demands for piracy countermeasures. Most notably, NBC Universal recently decided not to renew its contract to sell its TV shows there. (NBC Universal and the News Corporation have also announced plans for a video portal called Hulu.com.)
James L. McQuivey, a media analyst at Forrester Research, said that iTunes was primarily a vehicle for selling Apple's media-playing devices like iPods, and noted that its Apple TV box, which transfers video downloads to television, has failed to gain popularity.
Apple "is in a little bit of a crisis now," he said, adding, "If they can't get the content soon, which may be why they're doing all sorts of attention-getting content deals now – they need to show they have some traction in the video space – they stand to lose whatever momentum they've gained."
Besides Disney, Lionsgate, MGM and (most recently) Paramount now offer a limited number of film titles on iTunes. But the offerings seem mainly to point up what's missing. The iTunes "staff favorites" on Sunday night included Paramount's 1962 John Wayne romp, "Hatari." And the top-selling iTunes film for several consecutive weeks in September and October was MGM's 1987 comic classic, "The Princess Bride."
The picture isn't much rosier in independent film: that iTunes subcategory turned up only 28 titles as of Sunday.
"We're really at the beginning stage in the movie space," said Eddy Cue, Apple's vice president for iTunes, adding that iTunes had sold more than four million movie downloads – including shorts – but still had fewer than 1,000 titles for sale.
"Of course we want all of the Hollywood movies," he added. "But we do like the fact that we can be a great distribution vehicle for the little guys."
The littlest guys – makers of short films – are singing the praises of iTunes. Apple began selling shorts nominated for the Academy Awards last year, and it distributed about half of the Sundance Film Festival shorts this year (all at $1.99, the same price as a television episode; features sell for $9.99 to $14.99). A result has been a seismic shift in what it means to be a maker of short films, several directors said.
"It was so cool to actually get people to see something I directed," said Rob Pearlstein, director of the Oscar-nominated short "Our Time Is Up," who said he had previously gotten only as far as development hell. Among the people paying attention are scouts from Hollywood and the Web, said Ari Sandel, whose musical comedy "West Bank Story" won the Oscar for live-action short this year. "Now that there's a place to see a short," he said, "it makes more sense to make a short."
And Tiffany Shlain, whose Sundance documentary short on Jewish Americans, "The Tribe," went up on iTunes on Oct. 2 – and quickly cracked the Top 10 shorts- said that iTunes had actually made it advantageous, in a way, to make short films.
"It's one of these beautiful moments in time," Ms. Shlain said. "People aren't trained yet to download a feature and watch it" on their television, she added. "Most people are going to watch on their iPod or a computer. The technology really isn't there yet to move it over to TV. And people are much more apt to download shorts, because of YouTube and iTunes."
For filmmakers Apple offers a cookie-cutter deal that is generous on paper, compared with Hollywood norms: It charges just 30 cents on the dollar, while, with independent films, another 10 or 15 cents typically goes to an aggregator, or middleman, who converts a film into Apple's format and accounts for the proceeds to the filmmaker. But Apple provides financial reports only every six months, aggregators note, and it's safe to say that no one has gotten rich on an iTunes short film yet.
Releasing a feature on iTunes carries its own risks. Mr. Burns's producing partner, Aaron Lubin, said that video distributors had offered lower-than-expected advance payments for the film's DVD rights out of fear that its availability on iTunes would cannibalize home-video sales. But he and Mr. Burns said they hoped that the novelty of being the first movie to go out on iTunes would generate more publicity for "Purple Violets" than if it had opened on a few screens in New York and Los Angeles.
And people in St. Louis will be able to see it at the touch of a mouse, Mr. Burns said. "I don't know that this is the model for the indie filmmaker who makes a movie with a cast of unknowns," said Mr. Burns, who stars in his film with Debra Messing, Selma Blair and Patrick Wilson. "But there are plenty of people with nicer screening rooms in their basements now than at some of those art-house theaters. And I felt there's got to be a better way to get these films to people who want to see them at their moment of highest awareness."