Why Hollywood Snubbed Jobs at Macworld

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Then, there is the issue of price. Charging $14.99 for new flicks and $9.99 for older ones, Jobs clearly wants to undercut big-box retailers like Wal-Mart (WMT) and Target (TGT), which sell the great majority of the newer DVDs these days for as much as $19 a pop. That's a bad move on Jobs's part. Both Wal-Mart and Target have made their feelings known about being undercut by Apple. Big surprise—they're not happy about it, and Hollywood has been paying attention to these all-important retailers.

Both Wal-Mart and Target have since moderated their stance, at least in public, but I was told the discussions between Hollywood and Apple of late have focused on how to raise the initial price, at least for the hottest hits.

Deal May Require Softer Touch

The big question, of course, is how much Jobs is listening. He didn't much care when the music industry came looking for more money when the music it licensed to him became huge thanks to iTunes. Why would he? He had the upper hand. This time around, with Microsoft (MSFT) already out with its own link to the tube (which it's called iTV, it seems, just to rub it in), Jobs has real competition. And movies aren't nearly the hit on the video iPod that music almost instantly became. If you're a Hollywood suit, you figure you can wait out the whiskered one this time around.

Disney had valid reasons for being first to the video iPod party. Iger loves to show people that the first image you see when you log on to the iTunes video page is a screen shot of Disney's Pirates of the Caribbean. That's free promotion, and any movie exec would take that. Plus, Iger needed to show the world that Disney, after years of stumbles, had become a champion of new technology. But others aren't so eager to be the second, third, or fourth out of the box, it appears. None of the studios involved would comment for this story.

My money is on Steve Jobs eventually winning over Hollywood. He didn't build his reputation as the high priest and visionary of the tech world without the ability to divine which way the wind is blowing. But it will be a little tricky for a marketing master not known for his light touch at the negotiating table. I'm betting that Jack Sparrow and friends will have company soon enough on the Good Ship Apple. But the swashbuckler from Apple may have to put away his sword.

Grover is Los Angeles bureau chief for BusinessWeek.