• by Shankar Gupta , September 13, 2006

Apple chief Steve Jobs Tuesday unveiled a new section to the iTunes store that allows users to purchase and download full-length movies. The movies available at Tuesday's launch are provided by Pixar, Miramax, Touchstone and Disney--all studios owned by Walt Disney Co., where Jobs sits on the board and is the largest shareholder.

Downloads will cost $12.99 for pre-orders and new releases in their first week of circulation, $15 for recent releases, and $10 for older titles. The video files are encoded in "near-DVD quality," Jobs said.

Along with the iTunes movie store, Jobs previewed a product designed to bring iTunes to a user's television. The product, currently going under the internal name "iTV," is a small box that connects to the user's TV, and can stream media files from the user's iTunes account directly to the TV, either through a wireless or terrestrial network. It's slated for release in the first quarter of next year.

Apple's announcements, made at its "Showtime" press conference Tuesday, had been widely anticipated in the media. But, despite the buzz surrounding the new offerings, some industry watchers remain unconvinced. EMarketer analyst James Belcher said that there are many ways in which the service falls short. "The fact that it's near DVD-quality is going to hold some videophiles back," he said. "You can't burn to DVD; It looks like it's specific to computers and iPods initially, and it doesn't look like you get much of a price break over buying DVDs."

Belcher added that the iTunes TV show store--which has been successful--is different from the movie store, because many people won't want to watch movies on a computer screen. "With a movie, the idea is you have all this home theater equipment that you've invested in," he said. "That's the difference, is that people want to watch movies in their living room."

Apple's new store will be in direct competition with Amazon, which last Thursday unveiled a digital download service.