ITunes Music and Movie Conversion...how do they do it?

How does iTunes convert their movies and music over to iTunes downloadable files? Do the music companies just hand CDs over for iTunes to convert, likewise with movie studios...do they hand over movies in a specific format and then iTunes converts them to MP4 or do the studios and/or music companies hand over their products already converted to MP4 for iTunes?

See Empty/corrupt iTunes library after upgrade/crash or
Recover your iTunes library from your iPod or iOS device.
tt2

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