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Warner Bros. holds out on iTunes show rentals

updated 11:05 am EDT, Fri September 17, 2010

CEO worries about sales of full seasons

Warner Bros. is not participating in 99-cent iTunes TV rentals for several reasons, the Associated Press reports. Speaking at a Thursday investor conference hosted by Merrill Lynch, studio CEO Barry Meyer explained that Warner considers the 99-cent price too low. Rentals would also hurt sales of full seasons, the executive claims.

"We just don't think the value proposition is a good one for us," Meyer elaborated in an interview at the conference. Warner continues to sell individual TV shows at iTunes as well as season sets. Also sticking to that strategy are several other networks, including NBC and CBS. Only ABC, Fox, Disney and BBC America are so far on board for the new rental scheme.

The TV industry reaps significant income from DVD season collections, to the extent that previously canceled shows such as Family Guy and Futurama have been brought back. Video traffic at the iTunes Store has always been marginal, however, which 99-cent rentals may be intended to address. Apple generates most iTunes revenue through music and apps.






by MacNN Staff

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Comments

  1. doctor9

    Joined: Dec 1969

    +7

    huh?

    I'm not aware of the price details to argue, but didn't these same networks including Warner agree to provide such content for the new Samsung Galaxy Tab yesterday?

    http://www.electronista.com/articles/10/09/16/samsung.media.hub.debuts.for.us.android.devices/

  1. prl99

    Joined: Dec 1969

    +7

    greed and shortsightedness

    How many $2.99 shows are they selling? How many more 99-cent shows would they sell? Production costs aren't more for either amount so why not try the lower cost and see if you can sell more than 3x as many shows, thereby making more money? I'd think all the production costs have already been taken care of by advertising during the actual TV showing so re-runs on the 'net generate bonus money (less royalties to the actors--if they get any). I'm more willing to try shows at 99-cents than at $2.99 so getting any money from me means selling it at an amount I'd be willing to pay.

  1. hayesk

    Joined: Dec 1969

    +8

    Huh?

    Do movie rentals harm sales of movie sales or box office prices?

    I think the real reason to hold out is "if we refuse the new business model, we believe the old business model will continue to work for us."

  1. iphonerulez

    Joined: Dec 1969

    +8

    The real concern of the networks is

    Apple taking control. They just flat-out don't like Apple putting leverage on them. Yet, I think as long as other networks give in and start making money, TW will likely have to give in or lose out on a viable revenue stream.

    I believe some networks see iTunes as middleman that doesn't seem to be doing anything. Like a doorman that's always holding his hand out for tip just for opening a door. It's really funny. Only time will tell but I think it will end up the same way as the music industry. Apple's iTMS will become too big to ignore.

  1. hayesk

    Joined: Dec 1969

    0

    Huh?

    Do movie rentals harm sales of movie sales or box office prices?

    I think the real reason to hold out is "if we refuse the new business model, we believe the old business model will continue to work for us."

  1. cmoney

    Joined: Dec 1969

    +4

    Full season prices are too high!

    I'm gonna be "homeless" for a few months so I'm looking at TV show download options only to find out they want $50 for a season of most shows in HD format!

    Studios: it's 99 cents a show or nothing. (And by nothing I mean I'll be downloading via alternative methods.)

  1. vasic

    Joined: Dec 1969

    +4

    Control

    Yes, it is entirely about Apple's dominance, and WB is petrified.

    The argument that the price is to low is easy to make, since it is difficult to back it up by actual numbers. You would have to figure out:

    1. How many average viewers are there for an average WB show (Nielsen does this fairly reliably)
    2. How much money are they consequently getting per average show from advertising
    3. Calculate how much ad money does a single viewer generate.
    4. Figure out if the difference between $0.99 rental revenue minus ad revenue per single user is positive or negative.

    I don't doubt for a moment that it would be positive, so this is entirely about WB losing level of control to Apple, the biggest company in tech, and soon to become the biggest company in the US.

  1. vintagegeek

    Joined: Dec 1969

    +1

    The Matrix

    Hey, does anyone have a matrix of Studios, Networks, etc and where they stand with TV rentals, buy on iTunes. Old versus current season shows. I'm soooooooooo confused.

  1. B9bot

    Joined: Dec 1969

    +2

    All of the above

    Greed, shortsightedness, control, fear because that's not the way we do business are all the reasons Warner, the king of GREED won't agree to rentals. Once they see how ABC racks up the money, they will eventually change there mind. Especially when they see there sales go DOWN because no one will download from them.
    Warner needs a change in higher management to get with the present times, not live in the past.
    Right now Warner thinks they can do business as they did in the past. They will find out soon that what they did in the past doesn't work anymore especially at the price point they want.

  1. B9bot

    Joined: Dec 1969

    +3

    You would have thought they would have learned

    You would have thought they would have learned from there music business how things work today. But the old fogies apparently are stuck in there ways and I guess you can't teach old dogs new tricks.

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