1. What costs are movie studios reducing by using this alternative channel of distribution?
2. Is this an example of disintermediation? Will electronic distribution displace traditional distribution channels for movies?

If you’re eager to get the latest movie released on DVD, you don’t have to go any farther than your iTunes account on your computer. Normally, these movies weren’t available from Apple’s iTunes until several weeks after they were released, but major movie studios are allowing Apple to sell movies the day they are released. Consumers have been able to get movies on the same day as the DVD release from services such as CinemaNow and MovieLink for a few years, but those e-tailers don’t have the same clout as iTunes, which is now the biggest retailer of music in the United States. Although movie studios get less revenue than selling through traditional retail channels, their profits will be bigger due to lower costs.