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Apple’s Hollywood Negotiations Could Be in Trouble

Aug 29, 2017

Apple's talks with Hollywood studios to boost its ultra-high-resolution Apple TV content might be stalling.

The iPhone maker is planning to unveil a new Apple TV set-top box at a press event next month that will come with support for 4K resolution, The Wall Street Journal is reporting, citing sources. To bolster that device and have 4K content ready, Apple has tried to get Hollywood studios to offer their films and documentaries to its iTunes digital marketplace. The problem, the Journal's sources say, is the studios aren't so keen on Apple's pricing plans.

According to the report, Apple wants to sell the 4K content, which offers significantly sharper visuals than traditional full-HD video, for $19.99 per download. That's about the same price it charges customers who purchase new full-HD videos. Given the boost in resolution, and therefore, the better visual experience, Hollywood studios want Apple to charge as much as $30 per download, the Journal's sources say.

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The Apple TV, once called a "hobby" by late Apple co-founder Steve Jobs, is now critical to the company's efforts in the living room. The device connects to a user's television and provides access to both Apple-made and third-party apps, including games, TV programming, and more.

Apple has been rumored for months to be planning an Apple TV update for this year. Its chief addition, according to reports, will be support for the popular ultra-high-resolution video format.

However, getting 4K content to consumers requires more than just offering them a box. The technology also requires a 4K-compatible television and source content, like a 4K movie. Only with all three components can users watch 4K programming.

Apple is readying the box, and consumers will need to supply the television, but the iPhone maker also needs Hollywood's support to get the programming to users. And without an agreement on 4K content pricing, Apple might not have ample content to sell to consumers who want to take advantage of the technology.

According to the Journal, the studios are concerned that at a $19.99 price, Apple's 4K content catalog could prove substantially cheaper than those from other companies, like streaming service Vudu, which sells some popular titles for as much as $30. The Journal's sources suggest studios view 4K content downloads as a way to bolster flagging digital sales, and want to make as much from that content as possible.

Apple hasn't commented on its studio negotiations and did not immediately respond to a Fortune request for comment. The company is rumored to be planning to hold its special press event on Tuesday, September 12.

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