Apple looking to drop TV show prices by 50%?
updated 09:40 am EDT, Fri September 7, 2007
Apple at fault in NBC spat
Demands by Apple, not NBC, may be the cause of the companies' ruptured iTunes agreement, a new report suggests. Movie trade publication Variety cites three unidentified sources, who say that Apple has told networks and studios that it would like to cut TV episode prices from $1.99 to 99¢, the same amount it charges for protected music tracks. This may have been the catalyst for the NBC decision, even though it could have have kept the $1.99 price through automatic contract renewal.
Apple initially accused NBC of wanting to double the wholesale cost of content, something it has since denied, saying it only wants pricing flexibility and stricter piracy protection.
The greater issue, Variety's sources say, is the potential damage reduced pricing could do to the DVD market. Whereas the newly-released box set for Heroes costs an average of $40 at retail, the 99¢ fee could buy all 23 episodes for less than $23, albeit without bonus features. This sort of situation could discourage buying box sets, and thereby harm the relationship of companies like NBC with retailers such as Best Buy and Wal-Mart.
Similarly, only Disney -- in which Apple CEO Steve Jobs is a major shareholder -- has been willing to release movies on iTunes and DVD simultaneously, the former versions costing just $12.99.
Other sources and networks and studios say they are not inherently opposed to slashed video prices, since episodes of older TV shows are inherently less valuable to them than new ones. ABC is reportedly amenable to this plan, and to satisfy Apple's demand for pricing simplicity, another suggestion is a tiered menu: 99¢ for library shows, $1.99 for new titles, and $2.99 for the biggest hits, or shows from premium networks (Showtime, etc.).
An Apple representative has refused to confirm or deny price cuts, reiterating that the company would not agree to a "dramatic price increase" sought by NBC.
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Joined: Sep 2001
Huh?
"Whereas the newly-released box set for Heroes costs an average of $40 at retail, the 99¢ fee could buy all 23 episodes for less than $23, albeit without bonus features."
But that's exactly it. The pricing for the downloadable lower quality episodes is out of whack.
Right now, you pay almost as much as the DVD boxset to just have the episodes themselves, no bonus features, etc.
Moreover, if you were a consumer who did pay $46 for all the downloaded episodes, when the Heroes DVD boxset DOES come out, you may be less inclined to fork over another $40 again.
If the networks thought about this a second, they'd see that the best of both worlds would be consumers who buy the episodes online for 99 cents (for the convenience of having the episodes almost as soon as they air), and then buy the DVD boxset when it comes out (for the bonus features, higher quality, etc).