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Apple arguing to have iTunes TV show prices cut?

updated 10:45 am EST, Tue January 26, 2010

Executives 'frustrated' with video sales

Apple is pressuring American TV networks to accept lower episode prices at the iTunes Store, sources for the Financial Times say. In particular the company is said to be bringing the topic in up in meetings with media executives, which have allegedly taken place over the course of recent months. Apple's ideal price cut is said to be from $1.99 down to $1, making TV about as expensive as music.

For Apple cheaper prices would serve a dual purpose, first of all invigorating video sales through iTunes, which are said to be disappointing so far. Analysts have typically suggested that they represent a small fraction of overall iTunes revenue. This may be because the prices for some shows make iTunes copies as expensive as DVD or Blu-ray box sets, without the same flexibility in how they are watched.

A price cut is also said to be instrumental in Apple's tablet plans, which have so far been thought to revolve around e-books. Tablets are however a better platform for watching video than iPhones and iPods, which at best have a 3.5-inch screen. Most reports have put the size of Apple's tablet at 10 inches, on par with a netbook.

TV executives say that Apple will truly begin campaigning for cheaper episodes after the tablet is unveiled. "They know how to push," one senior media executive comments. "It's not a push, it's a suggestion," he adds, except that "it [iTunes pricing] comes up in all the conversations."

Networks are believed to be worried, however, that they could suffer the fate of the music industry, which agreed to 99 cent iTunes songs in 2003 only to find that people bought singles instead of albums. Companies are also alleged to be resisting the idea of an iTunes TV subscription, which might cost $30 a month and offer an assortment of shows from different channels. Disney, CBS, News Corp., Time Warner and Viacom are all claimed to have been approached, but hesitant because iTunes could draw people away from conventional pay services, which have held out in spite of a recession.

 
Previous Comments

Works for me but how.

01/26, 11:05am reply

The family only watches 60 Minutes, Weather, TCM, Football and a large movie library on Apple TV. We are looking for a way to ditch the cable connection. Unfortunately they also supply the internet high speed connection. What is the work around?

starwarrior

Fresh-Faced Recruit

Joined: Mar 2006

+1

Ditch the cable tv connection

01/26, 11:28am reply

@starwarrior - unless you're bound to it under a bundle deal, there's no reason why you couldn't cancel the cable tv service and keep the cable internet service. They might charge more for just the one service, but that's still going to cost you less in the end than paying for a service you don't use.

Zaren

Fresh-Faced Recruit

Joined: Aug 2001

+4

Apple TV for worldwide

01/26, 12:17pm reply

iTunes Apple TV could be interesting if it run worldwide and not only in USA or UK. If subtitles are a problem, just put an option for English subtitles, I believe lots of non English native speakers doesn't mind to watch a English movie with a help of English subtitles. Just an idea of a citizen of a non English Language Country. :-)

IxOsX

Fresh-Faced Recruit

Joined: Feb 2009

0

Re: ditch

01/26, 12:22pm reply

Except you won't be watching football, watching weather (as fascinating as that is) and I don't know if 60 minutes is available on the interweb...

And good luck finding those TCM movies out there anywhere. Most places don't seem to think anything from the 60s and before is worth digitizing/renting (and when they do, they want premium prices!).

testudo

Fresh-Faced Recruit

Joined: Aug 2001

+1

Re: Apple TV worldwide

01/26, 12:44pm reply

It isn't subtitles. It's copyright and the studios. While some stupid show (say 30 Rock) might be airing now in the US, it might not be sold to run in Europe or Asia until next year. As such, they don't want to lose their distribution money by having people be able to download them in those areas (same reason why DVDs are sold with regions on them).

testudo

Fresh-Faced Recruit

Joined: Aug 2001

+4

Networks

01/26, 12:56pm reply

Networks are believed to be worried, however, that they could suffer the fate of the music industry, which agreed to 99 cent iTunes songs in 2003 only to find that people bought singles instead of albums.

And how is this worrying them? You can already buy shows separately. I would think they'd be more concerned about letting Apple dictate pricing and control to them, rather than the other way around.

Companies are also alleged to be resisting the idea of an iTunes TV subscription, which might cost $30 a month and offer an assortment of shows from different channels. Disney, CBS, News Corp., Time Warner and Viacom are all claimed to have been approached, but hesitant because iTunes could draw people away from conventional pay services, which have held out in spite of a recession.

Actually, the bigger question is "$30 a month???". Netflix costs a third of that, and offers on-demand streaming of episodes and movies.

testudo

Fresh-Faced Recruit

Joined: Aug 2001

+1

Magic Price Point

01/26, 02:28pm reply

There is no doubt in my mind (not that the going-ons of my mind really matter) that a shift to legal digital music would not have happened without Apple negotiating a price point of 99¢ per song. The price point was important to make the market attractive enough for people to break the norm of buying a CD (and in some cases, stealing it), the concept of actually paying for something purely digital with no physical product was a mental shift. Some people still believe 99¢ per song is too much, but clearly it's acceptable to a large mass of people. The other key piece of Apple's success in digital music is their understanding of the average consumer and the seamless buying experience from content to player. Perhaps at an exponential rate, this is less true if at all today, but in 2003, the internet was wide open and a scary place for most average people. What the iTMS also offered was a safe secure (real or perceived) and well designed place to buy one's music.

If course this is not 2003 and it seems like everyone's mom is on facebook these days. The environment that existed to transition people digital music cannot really be compared to today's environment where the content to sell is digital video media. We are comfortable with the web (bad or good, we whip out the credit card for online purchases as a matter of habit now days). But today we also have OnDemand content that is both free and paid for, other sources of media such as Amazon, and there is Hulu and YouTube and on and on. Not only that, but the music industry was the first, they had no idea what was coming, no one really did. But the Networks and movie industry see what happened to the music biz and have planted their heels to the extent possible. So while you might actually be getting more from entertainment out of say a TV show, than a song, why would you pay $1.99 for the show when you can get it for free, or you'll probably never watch that show again, where as a song you'll listen to again and again? You'd pay for it for convenience, but you'd only pay so much for convenience. There's something about 99¢ that seems like a bargain in the human mind, you think of it differently than you do for about $1.00. You need to get people comfortable with paying for something that they could otherwise get free, and the magic price point plays a big role in that.

slider

Mac Elite

Joined: Oct 1999

+3

Apple again is trying desperately to

01/26, 04:34pm reply

collect low-cost content to drive hardware sales. I hope Apple can manage to do it, because it's going to need a lot of leverage to sell tablets in the millions of units to the average consumer.

iphonerulez

Fresh-Faced Recruit

Joined: Nov 2008

+2

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