Wired: iTunes Videos Are Pricey

The availability of free, pirated movies all over the Internet hasn’t stopped online retailers from gouging customers on digital downloads, as Wired reports. Companies like Apple are charging $2 to $4 per online movie rental. The average movie download costs 10 bucks, which is barely less than a new DVD and more than a used DVD.

The running explanation is that prices are so high because the studios aren’t willing to reduce their take on sales, the report said. “If you’re a studio, you’re not going to want to sell your movies for 99 cents each,” said Jason Avilio, an analyst with Kaufman Bros, in the article. “If you look at what’s going on with the new release side, you see [online] rentals for around $3.99. I wouldn’t expect that to change a whole lot over the next year or two.”

At the same time, it costs virtually nothing for companies to sell movies online aside from bandwidth and storage space. There’s no disc duplication, manufacturing labor, packaging, distribution to warehouses, shipping or fuel costs, and in-person retail sales overhead. Plus, recent studies show that young customers think online media costs too much money, and regulators are currently investigating media companies for fixing prices.

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