Amazon.com could go head-to-head with Apple, the iPod maker, in the next few days, with both groups expected to enter the video download market with services that will open a new front in the battle to sell media content online.
Amazon, the world’s largest online retailer, is widely expected to announce a string of deals with several major movie houses with different prices for various movies.
A spokesman for Amazon told Times Online: “We’ve made no secret that we are interested in video and music downloads.” However, the company refused to give any comment on specific launch plans for a new service.
Meanwhile, an Apple event next Tuesday, dubbed “It’’s showtime”, is expected by Wall Street to reveal a video download service. Analysts at Goldman Sachs said in a note today: “In conjunction with … new iPods, Apple is set to add movie downloads to its iTunes on-line service.”
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According to several reports, Apple will announce an initial partnership with Disney, where the Apple chief executive Steve Jobs sits on the board.
The iPod maker is expected to announce a two-tier pricing structure - at $9.99 and $14.99 in the US - according to Business Week. The move is likely to be seen as a concession to Hollywood executives who have resisted moves to pulled into a flat pricing scheme like that used on iTunes, Apple’s online music store.
“Apple never comments on forthcoming products,” a company spokesman said
If the reports are correct, Amazon’s greater number of deals could score an early victory over Apple as getting catalogues cleared by the studios for download is regarded as one of the toughest hurdles for would-be download services.
However, competition is likely to be fierce with several companies - including giants Microsoft and Sony - looking hard at how best to reinvent the video rental model of the 1980s for the internet era.
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Internet companies such as CinemaNow and MovieLink already sell movies in digital formats online. However, recent research has suggested computer users currently prefer to download short video clips instead of full-length films.
Following this trend, groups such as Yahoo!, for a long-time regarded as the most content-orientated of the large internet portals, has recently concentrated on platforms for user-generated content supplied by the public rather than Hollywood.
The challenge for the filmmakers and retailers is to persuade consumers to make use of high-speed internet connections to download films without succumbing to piracy in the same way as the music industry.
The appointment of Eric Schmidt, chief executive of Google, onto the Apple board is being seen as a potentially key factor in this. It is estimated than the vast majority of “online media enthusiasts” start at a search bar when they go online, an area where Google is dominant.
Social networks such as MySpace.com and Bebo are also expected to play a part, together with other recommendation tools that tap users into like-minded consumers’ views and allow word-of-mouth-style marketing campaigns.
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Apple is planning a special press conference on Tuesday, which will be beamed from California to assembled European journalists in London. The last time the company staged such an event it was to announce its migration to chips made by Intel - a key turning point in its computer strategy.