iTunes’ big studio deal announced yesterday? It’s going to be an expensive one for Steve Jobs who’s taking a loss on each film sold. Some terms from the WSJ: Apple (APPL) is paying $16 to the studios for each new release, and will sell the films to consumers for $14.99.
It’s a small price to pay to gain a foothold in the market, but a sign the studios aren’t planning to give up the margins they’ve enjoyed for decades in the traditional home video business.
But it’s also a change for in strategy for Apple: While big boxes like Wal-Mart and Best Buy have been happy to use media as an outright loss-leader, Steve Jobs has previously tried to break even or better with iTunes sales.
But here’s a question: Did Apple get a better deal than the $17 Wal-Mart pays the studios for new releases on DVD and is Wal-Mart cool with that?