Warner sells movies as apps on Apple devices, bypassing iTunes movie store

USA: Warner Bros. Digital Distribution has released two movies, including extras, as apps via the iTunes App Store, bypassing Apple's own iTunes Movie Store. The Dark Knight and Inception are Warner's first two releases made available as "App Editions" for Apple's iPad, iPhone, and iPod.

App editions can be downloaded free of charge via the App Store and give users the first five minutes of the feature film and a portion of bonus content that can include games, trivia, soundtracks and soundboards.

Customers can unlock the movie via an in-app purchase, which enables both downloading and unlimited streaming of the film and additional bonus content. For Warner, the new initiative is significant because it is the first time films have been made available for Apple's iOS devices outside of a content deal with Apple or other third party, such as Netflix.

Significantly, the move allows Warner to sell Inception and The Dark Knight in 35 territories, including 23 that did not have access to films in general through iTunes movie downloads, such as the fast-growing theatrical markets of China and Russia, along with a number of European countries like Greece and Portugal. The fact that the Warner Bros. app contains social-networking support and a few other interactive features seems to have been just enough for “App Editions” to get through Apple's latest App Store approval guidelines, which stipulate that media-only content must be submitted to the iTunes Store and not the App Store.

Apple, however, will receive its standard 30 percent take on in-app purchases. This suggests Warner is more interested in driving a wider global reach that comes from these app editions than maximizing profits. Not to mention, Warner will have to pay per stream every time the film is streamed from within the app.

Warner is not the only studio that is experimenting with the movie app concept. Paramount first introduced “enhanced movie apps” for 10 feature-length films from its catalog, designed to play on smart phones running Microsoft's Windows Phone 7 software. Fox has taken a different route—adding mobile functionality as a value-add to the Blu-Ray version of Unstoppable, which allows consumers to transfer the film and extra features to Android phones. To do this, consumers need the disc itself, a Wi-Fi-connected Blu-ray Disc player, Android 1.6 or higher, and the free PocketBLU app from the Android Market.

The success of the greater apps business being driven by Apple and Google has created an opportunity for companies to experiment with the movie app concept, at a time when digital movie sales continue to struggle.

Source: IHS iSuppli, USA.