Price Cuts Coming for iTunes TV Shows, or Gouging From NBC?

by Paul William Tenny

tv-movie-download.jpgThat'd be nice, but I kind of doubt it. Even though it makes total sense from a consumer perspective, and not just because we're talking about getting something for less money here. The fact that these shows are wrapped in DRM, in my opinion, cuts their value about about 2/3rd's, meaning they shouldn't cost more than 66 cents. Since they aren't the same resolution and bitrate of a DVD, that cuts their value by another third, down to 44 cents. Will they ever reach that price? Not on your life.

But is there room to move? Perhaps. Or maybe we're just being played.

According to three people familiar with the proposal, Apple has told networks and studios that it would like to slash the cost of most TV episodes sold via iTunes from the current $1.99 to just 99¢ -- the same as what Apple charges for most music singles.

But entertainment companies don't seem to be rushing to embrace the idea. Indeed, the half-price plan may have contributed to NBC's decision last week not to renew its current deal with Apple (though if NBC had simply let its contract automatically renew, the current price of $1.99 would've stayed in place).

At $1.99, these episodes already cost more for a full season than a DVD box set, which makes them overpriced by default since you're buying nothing but bytes on a hard drive that can't be moved from device-to-device at your pleasure. But what about at 99 cents? That sounds like a great price, but doesn't that then make music overpriced in comparison? A while episode of a TV show for the same price as a four-minute song hardly seems right.

Going the opposite direction, NBC supposedly wants to increase prices so that downloaded TV shows don't just cost more than the DVD, they cost a lot more. Does that sound right to you?

If cooler heads prevail, it seems possible Apple and the nets will come to a settlement in which shows are sold via tiered pricing, perhaps 99¢ for library titles, $1.99 for current hits and $2.99 for megahits or shows on premium cablers such as HBO or Showtime.

$2.99 per episode means almost $72 for the whole season, which is a non-starter. Apple and the studios need to get serious about this, or this market will never flourish. They see this as an opportunity to get rich, rather than as a new market ripe for new strategies. They could fund on-the-cheap series that couldn't make it on the broadcast networks that would be distributed entirely online, but instead they are just finding ways to gouge consumers.


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The $2.99 mark sounds bad, but then if you think about what shows like the Sopranos are actually going for on DVD, and it's inline with the ratio of DVD to single episodes for normal shows.

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