Quick Hits: HBO, Apple Share Profitable Bite of iTunes
Brief scrutiny of today's headlines
Portfolio.com reports that Apple is close to announcing a deal to sell HBO programs and movies on the iTunes website.
The service, which could launch in two weeks' time, marks the first time Apple has agreed to a separate price offering for a content provider. While the details of the agreement aren't known, it's possible that HBO programming will fetch a higher price than the flat $1.99 fee Apple currently charges for video content. Insiders also speculate HBO will receive a larger piece of the action than other iTunes content providers.
The deal would be a win for both companies. Apple wants to promote sales and awareness for its new Apple TV, a device that allows viewers to rent movies and buy a range of content from their television, while HBO wants to profit from a growing archive that includes shows like Six Feet Under and Entourage.
NBC (GE) pulled programming from iTunes last summer after Apple refused to set pricing for the network's shows above the requisite $1.99. Whether news of a premium for HBO content gives leverage to other studios -- and record labels -- seeking higher price points on iTunes remains to be seen.
For investors, this adds to the bullish argument for Apple. While this new offering is bound to be a hit, the bigger news with Apple is its new iPhone. As for Time Warner (TWX), HBO's parent company, this little bit of revenue doesn't reverse a long-term decline. So, save your pennies and just enjoy the show.
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