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News Corp. split on allowing 99 cent TV show rentals

updated 10:15 am EDT, Tue August 31, 2010

Company seen as swing vote

The future of TV shows on iTunes -- and possibly TV itself -- may be riding on whether or not News Corp. decides to back Apple plans to allow 99 cent show rentals, says the LA Times. The industry has allegedly been wrestling with the merits of Apple's idea for several weeks, as even if it does generate a lot of downloads, it could potentially wreck the economic model used to finance modern TV shows. While Disney is now claimed to be onboard, CBS, Time Warner and NBC Universal are opposed.

The major undecided party is News Corp., within which executives are split, according to anonymous sources claimed to be close to the conservations. The opposition notes that 99 cent rentals could cut into DVD sales, simultaneously luring people away from network TV, a market driven by about $20 billion in advertising. The pro faction is headed by CEO Rupert Murdoch, and thought to be motivated by benefiting other divisions in News Corp., primarily newspapers.

By endearing the company to Apple CEO Steve Jobs, it's hoped that News Corp. may be able to gain favorable terms elsewhere. In the past, Murdoch has suggested that the iPad will save print media by attracting people who would not otherwise subscribe to a newspaper. News Corp. is in fact believed to be readying a national digital newspaper for launch by the end of the year.

For Apple cheap TV rentals are thought to be a way of reviving iTunes video sales, which have mostly crawled since 2008. These have been hurt by services such as Hulu, which cost the public only in terms of exposure to advertising. Apple executives are said to be pitching Hollywood on the idea that 99 cent rentals could more than double the amount of transactions.

Should it have its way, the company is expected to run a six-month pricing trial, in which networks will be guaranteed the same amount of revenue higher prices might otherwise generate. As a tradeoff, Apple is asking for commercial-free versions of popular shows within 24 hours of original broadcast.

Other concerns in the TV industry include the possibility of harming syndication sales, which for Warner Bros. can earn up to $2 million per episode. Executives also suggest that discounted rentals might convey the wrong message when they are trying to get cable companies to pay for the right to retransmit network TV.






by MacNN Staff

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Comments

  1. Gazoobee

    Joined: Dec 1969

    0

    crazy

    I don't know why Apple or the industry is even talking about 99 cent rentals for TV shows. It's always framed as though this is a good thing for the consumer, but that "the industry isn't sure about it," but it's a really bad deal no matter how you slice it.

    Only a complete fool would regularly rent TV shows for 99 cents an episode. It's economically unsustainable for the average person/family and their average TV watching habits.

    This is no solution for anything, and it's not a good deal.

  1. jnicholas

    Joined: Dec 1969

    +1

    great deal for me

    99 TV show rentals would be a great deal for me. I don't see why Gazoobee above is so against it. It's not an all or nothing deal. Right now I DVR several shows and I buy a couple of shows I really like on my Apple TV. If shows were only 99 cents I would probably rent nearly all the network shows I like. I love watching a show like Mad Men or Breaking Bad uninterrupted by ads or overlays. I would probably watch many more that way with that kind of price break. The rent vs buy element is meaningless, I'm never going to rewatch a television show.

    " Only a complete fool would regularly rent TV shows for 99 cents" I don't see how that's foolish at all. That's unlikely to add up to even $10 a week, I spend more than that on coffee. Most people probably waste more than that on soft drinks with lunch. Plus most shows only have new episodes a few weeks a year and other weeks you won't have to buy anything.

    "It's economically unsustainable for the average person/family and their average TV watching habits. " You don't have to sign a pledge to never watch any other source of tv again. I can just rent high quality dramas that I care about and still let the kids watch icarly or surf DIY shows off regular channels.

  1. MyRightEye

    Joined: Dec 1969

    0

    I don't own a TV. I don't watch TV.

    Though I will download some things that interest me, like Heroes. But pay for them? Yeah, sorry, but no. I'd rather read a book.

  1. cmoney

    Joined: Dec 1969

    +2

    re: great deal for me

    completely agree. i pay about $90 a month for cable, 2 dvrs and hbo. with hulu plus, netflix and a few rentals from apple for shows like mad men, i could get rid of the cable box and be able to watch shows almost anywhere.

  1. sammaffei

    Joined: Dec 1969

    +2

    BS arguments

    NBC is opposed because Comcast is on the verge of owning them. But, the Justice Department might just make them do it.

    There's no way that the networks are even getting $0.50 per viewer of a episode in advertising revenue. So, it's more profitable for sure to get the lion's share of $0.99. They are just worried about Apple controlling everything in the end (much like the music business).

    Once ABC / Disney starts making pots of money off of this, the others will follow suit. Much like the holdouts for iTunes music. Much like the holdouts for DVD or Blu-Ray in the beginning of those formats.

  1. testudo

    Joined: Dec 1969

    0

    Re: BS arguments

    NBC is opposed because Comcast is on the verge of owning them. But, the Justice Department might just make them do it.

    Justice can NOT make them sell their videos on the ITMS or in any way they don't want to sell them. Since when did it become a right that people should be able to download digital copies of their favorite TV shows? The only thing they could possibly do is make it a requirement that if Comcast starts up their own video sales site and put NBC content on it, they have to then allow others onto the site, and allow other sites to have access to NBC content.

    There's no way that the networks are even getting $0.50 per viewer of a episode in advertising revenue. So, it's more profitable for sure to get the lion's share of $0.99.

    Yes, that's why all the networks are dumping their TV and cable stations and getting out of the broadcasting business, instead just producing and selling shows on-line.

    Oh, wait, they aren't doing that? But it seems so odd, since they'd obviously make more money on-line.

    They are just worried about Apple controlling everything in the end (much like the music business).

    Yeah, what a bunch of hosers. Who cares if it's their content. They should just cede all control to Apple, for Apple knows what is best for them. It isn't like Apple is in it for their own benefit. What? You mean Apple, like the networks, is a for-profit company who's main goal is to make money? That can't be right. They're in the business to make all those other companies money, while, at the same time, make people's lives better. That's it. They aren't after the cash. That's why they don't spend all the profits they make.

  1. gmsquires

    Joined: Dec 1969

    -1

    $.99 per show or series?

    A lot of has been expended indicating that it will be $.99/show, but another recent article from another source on this indicated that it might be $.99/series.

  1. testudo

    Joined: Dec 1969

    +3

    Re: I don't own a TV. I don't watch TV.

    Though I will download some things that interest me, like Heroes. But pay for them? Yeah, sorry, but no. I'd rather read a book.

    Yeah, the "I'm too good for TV" person who then just freely downloads copies of shows. I guess that way they can still act 'superior' and all.

  1. testudo

    Joined: Dec 1969

    0

    Re: $.99 per show or series?

    A lot of has been expended indicating that it will be $.99/show, but another recent article from another source on this indicated that it might be $.99/series.


    That rumor was 99 cents per show per month. But that's not going to happen. Too many issues with it (what does it mean by 'month', how many shows per month minimum? Can I go back a month, then? And too many show take months off at a time, or show one new episode per month that people would whine over how they got rooked this month because their $1 got them just one episode when last month it was four.

  1. mrdnd

    Joined: Dec 1969

    0

    The Internet is Changing TV From Broadcast to On-

    The TV industry needs to own up to the fact the Internet is changing the way people expect to watch tv. All eyes should be on Netflix and possibly Hulu (which News Corp owns a major share of). Apple is offering an installed user base of tens of millions of iPhones, iTouches, & iPads. You can tap that market or you can let those consumers spend their money elsewhere. Personally, I am not interested in a pay-per-view model that's being proposed. I am a Netflix subscriber and I've tried Hulu Plus (which frankly isn't worth it compared to the already free web version). News Corp needs to realize that price point is a consideration. Their competition offers a whole month of downloads for $10. ITunes is trying to offer new content for $0.99 per view. Will users bite or ignore it?

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