60 second briefing
Why Steve Jobs Is scaring the bits out of Hollywood
By Peter Lewis, Fortune senior editor

(Fortune Magazine) -- Apple recently added movie downloads to its iTunes store. In one fell swoop, Jobs piqued Hollywood, Amazon, and big-box DVD sellers like Wal-Mart. For consumers left scratching their heads on what it all means, here's the plot so far:

1 What is Apple's (Charts) new service?

Consumers can download a digital copy of a movie over a high-speed connection for use on a PC, TV, or iPod-type device. The first offerings are Disney movies, for $9.99 to $14.99. Apple says it takes 30 minutes to download a "near-DVD quality" movie, although users can start watching before the download is complete.

2 Why so cheap?

Steve Jobs' pricing scheme fights Wal-Mart (Charts) and Best Buy (Charts) at their own game: selling some movies at a loss to drive traffic. It puts pressure on studios to lower DVD prices and squeezes online competitors like Amazon. Apple's movie strategy will mimic its iTunes TV strategy: Start with Disney (in that case, ABC), then bring in the other studios.

3 Why are other studios holding back?

Hollywood sees downloads as a new sales opportunity but hates Apple's pricing, which is generally less than what they get for DVDs from giants like Wal-Mart. If Wal-Mart demands equal treatment, the studios say, they will lose hundreds of millions of dollars.

4 Coming attractions:

Apple also unveiled a prototype device ($299, spring 2007) to stream movies wirelessly from the PC in the den to the TV in the living room. No rival has anything close. Message to Hollywood: Apple has changed the game for music and TV downloads. Movies are next.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.