• Financial Times, Friday, February 2, 2007 10:45 AM

The Walt Disney Company has been selling movies through Apple's iTunes downloading service for just three months, but the company's film unit is reporting that 1.3 million movies have already been downloaded.

Disney began selling its new movies on iTunes in October. But other studios have resisted its lead, partly because of fears they will upset retailers, such as Wal-Mart and Target, which are responsible for most DVD sales in the U.S.

Disney chief Bob Iger dismissed fears that downloads detract from DVD sales, pointing to the recent success of Disney blockbusters "Cars" and "Pirates of the Caribbean: Dead Man's Chest." The Disney chief added that if media companies don't embrace digital media, "other entities will create content and fill that void."

To its retail partners, Disney tells them the pie is getting bigger. That's not quite true. While more media is certainly consumed, the proliferation of new devices simply means there are more pies. In most cases, consumers are either buying the DVD, or they're downloading it to their PC, not both.

Read the whole story at Financial Times »