Apple Inc. announced Thursday a new agreement with top Hollywood studios that will allow them to start selling movies through its iTunes Music Store on the same day as the titles are released on DVD.
Apple's vice president of iTunes, Eddy Cue said: We're thrilled to bring iTunes Store customers new films for purchase day-and-date with the DVD release. We think movie fans will love being able to buy their favorites movies from major and independent studios.
The company's shares rose 2.8 percent on the news, as investors hoped the new movie sales would promote purchases of its iPod media player and Apple TV, as well as boost growth for iTunes.
In addition to Disney - which has been selling movies on iTunes since September, 2006 - iTunes will distribute1,500 films from Warner Bros., Paramount Pictures, Universal Studios Home Entertainment, 20th Century Fox, Sony Pictures Entertainment, Lionsgate, First Look Studios and Image Entertainment.
New films are set to cost $14.99 while catalogue titles will cost $9.99. Titles that will be available this week include Juno, American Gangster, The Butterfly and I Am Legend.
The new release dates will only be applied to movies purchased through iTunes, while DVD releases in other distribution outlets will still take about 30 to 45 days before it's made available.
The latest move from Apple poses a threat to video rental companies like Blockbuster and Netflix, as well as Amazon Inc. However, both Amazon and Netflix already have their own movie download or streaming services and both offer more titles. Netflix has more than 6,000 while Amazon has nearly 12,000 titles.
20th Century Fox is owned by News Corp, Warner Bros is part of Time Warner Inc, and Paramount is a unit of Viacom Inc. Universal Studios is part of media conglomerate NBC Universal, which is owned by General Electric Co.