News from Portfolio.com
Also on Portfolio
The Confessions of Barry Diller
Facebook's Growing Pains
What Are the Dolans Up To?
Subscribe to Portfolio magazine
Apple is close to announcing it has signed a deal to sell HBO programs and movies on the iTunes website, according to HBO employees involved in executing the agreement.
The deal marks the first time that Apple has agreed to a separate price structure for a content provider, one of the employees said.
The HBO insiders said that the new service would be launched and announced simultaneously, most likely in a week or two.
Details of the agreement are not yet known, but it is clear that HBO was able to secure better terms from Apple than other content providers, they said.
One possibility is that HBO programming will have a higher retail price than the flat $1.99 fee Apple currently charges for video content; another is that HBO will receive a larger cut of the same flat rate than other iTunes content providers receive.
Apple and HBO spokespeople did not return calls for comment on the deal.
NBC pulled its programming from iTunes last summer after Apple refused to charge more than $1.99 for that network's shows. In May, NBC struck a deal with Microsoft to sell its shows on the Zune website.
The HBO-Apple agreement is a strategic coup for both companies. Apple is trying to increase sales and awareness of its new Apple TV, a device that allows viewers to rent movies and buy content from your television. HBO wants to profit from its archive by letting fans buy old episodes of shows like Deadwood and The Larry Sanders Show.
The terms of this new deal could open a Pandora's box for iTunes. With the advent of pricing variation, movie studios and musicians will want to charge more for their big hits. Apple could be pressured to accept variable pricing for other content, a change it has resisted in the past.
HBO started an online download service earlier this year. It lets HBO subscribers watch 400 hours of programming a month and stream HBO's main channel. The service, called HBO on Broadband, is currently being tested in Wisconsin and will soon spread to other markets.
The deal with Apple is a more dramatic move for HBO, since the broadband service only allows current HBO subscribers to access the content. Selling through iTunes would let HBO tap everyone else.
In the past, HBO has been notoriously slow to offer content through new media, and the deal with Apple is a result of pressure from HBO's parent company, Time Warner, according to HBO employees.
Jeff Bewkes took over as Time Warner C.E.O. from **** Parsons late last year.
"We should have done this a long time ago," said an HBO insider.
http://feeds.wired.com/~f/wired/topheadlines?i=oaFyfH http://feeds.wired.com/~f/wired/topheadlines?i=atzwuh http://feeds.wired.com/~f/wired/topheadlines?i=cq69Gh http://feeds.wired.com/~f/wired/topheadlines?i=uwC0UH