Lionsgate Bundles iTunes Versions With DVDs

The additional, bundled copy will be just like movies purchased from the iTunes Store in that they can be transferred to iTunes and then viewed on a PC or Mac, iPod with video, iPhone or on wide-screen television with Apple (Nasdaq: AAPL) TV.

The joint effort between Lionsgate and Apple will begin with the special-edition DVD and Blu-ray releases of "Rambo" and "The Eye." "Rambo" will be available starting May 27, while "The Eye" will be released on DVD this summer.

Additional titles will be released on DVD with iTunes digital copies later this year, the companies said.

"Digital Copy for iTunes is a perfect example of how packaged media and new digital technology can work hand in hand for the benefit of consumers," said Steve Beeks, Lionsgate's president and co-chief operating officer.

Account Required

Lionsgate already features a variety of movies for rental and purchase through the iTunes Store, including such recent releases as "3:10 to Yuma," "Good Luck Chuck" and "War," in addition to television programming like "Weeds" and classic titles including "Dirty Dancing" and "Reservoir Dogs."

Now, with the new bundled titles, customers who purchase a DVD will be able to simply insert it into their computer, enter a unique code into iTunes and have the movie automatically copied to their iTunes library.

The iTunes digital copy of the movie will then be the customer's property, viewable like other iTunes Store video content on a variety of devices.

Each DVD will transfer its iTunes digital copy to only one iTunes library, Lionsgate noted, and an iTunes account is required.

'Best of Both Worlds'

"This is an idea that has been kicked around for a while," John Barrett, director of research with Parks Associates , told MacNewsWorld.

In general, many more people have the ability to watch video on mobile devices than actually use it, Barrett noted, and "part of reason is the content that's available."

It's a "tough sell" convincing people to buy an iTunes version of a movie rather than get the DVD and be able to watch it on their TV at home. "People are afraid of being tied to the platform," he said.

In that sense, "it's a good idea to try things like this, because consumers kind of get best of both worlds, and don't feel like they're losing out if they buy a movie for their iPod."

'An Appealing Option'

There are still some other challenges facing mobile video, Barrett added. For instance: "You've got to have a lot of patience to watch a 2-hour movie on a 2-inch screen."

Nevertheless, there are situations where consumers will find the ability useful, such as while traveling, he noted.

"I think what you'll find is that this won't push many people over the top in deciding whether to buy a particular DVD or not, but it will certainly be an appealing option for someone who likes the movie anyway and has an iPod," Barrett concluded. "People may be hesitant to pay money for content given that small screen, but if they're getting it bundled with something else, they might give it a try and decide they like it."

Competition With Rentals

Still, in the long run, it's not clear how well digital movie sales will fare relative to rentals.

"I think this is a modest step in the direction of digital media, but I think most people are going to want to rent the movie rather than buy it," Phil Leigh, senior analyst with Inside Digital Media, told MacNewsWorld.

"If I'm thinking about buying a movie, it'll be incrementally more attractive to buy it with this feature," he said. "But most of us want to watch just once or twice, so renting it tends to be more attractive."