Apple Pressuring TV Networks to Halve iTunes Episode Pricing?

[HobeSoundDarryl]

Boy was the posting of this article ever timely, I just found myself searching on itunes for a tv show only to find that it was way to expensive, which unfortunately forced me to download it via a torrent site.

I refuse to pay $1.99 or $2.99 for a single episode that as far as I'm concerned is found money for the tv industry anyway.

This is just another example of why piracy isn't going away. As long as the Tv exec's, who stupidly refuse to implement a marketable business model, continue to overprice their products people will continue to turn to piracy.

I do congratulate Apple though for attempting to price a product in line with its true market value.

Having met & worked with many of the Tv exec's I'm concerned that Apple won't get through to them. These idiots are more concerned with where their bonus & new Porsche is coming from than pricing their produces fairly.

So since my fat cat, porsche-driving banker doesn't get it either, I should just walk in his bank and steal the money.

Since my fat cat grocery store executive doesn't get it either, I should just go into their grocery store and steal my groceries.

Etc.

Come to think of it, ALL of my bills are "too high" so I should just steal everything, and it should be O.K. because the fat cats at the top get paid "too much."

Shall we all adopt this mentality?

 

[scoobydoo99]

TV episodes have to become cheaper.

They cost nothing on broadcast.

Not true. The "cost" is that you have commercials on broadcast. (Discounting for the moment the ability to fast forward on your DVR.) The point is, the business model is based on obtaining revenue from advertisers in exchange for delivering viewers for their ads. When you sell the TV program without advertising, that $1 per episode has to make up for the lost ad revenue.

Even from a viewer's perspective ads are a "cost" - I spend time watching the ads or fast forwarding thru them - either way I'm still wasting time.

As for $1 episode pricing, I think it's a great idea - increase revenue by increasing volume. Hope it happens.

 

[Superdrive]

Make it free and include commercials like HULU or CBS.COM. The money from the ads would be greater than the NOTHING they get from me now.

Allow me to watch Wheel of Fortune, Price is Right, or American Idol for free plus ads. I'm not going to buy these episodes. So, why not let me watch it and delete it?

 

[HobeSoundDarryl]

Not true. The "cost" is that you have commercials on broadcast. (Discounting for the moment the ability to fast forward on your DVR.) The point is, the business model is based on obtaining revenue from advertisers in exchange for delivering viewers for their ads. When you sell the TV program without advertising, that $1 per episode has to make up for the lost ad revenue.

Even from a viewer's perspective ads are a "cost" - I spend time watching the ads or fast forwarding thru them - either way I'm still wasting time.

As for $1 episode pricing, I think it's a great idea - increase revenue by increasing volume. Hope it happens.

And just in case you wonder, that ad revenue totaled $43 BILLION last year, so they need to sell a LOT of commercial-free shows to make up for that revenue should this model replace that one. Lower pricing tends to drive higher volume, but they still have to overcome the general concept that TV programming is/should be "free" in the minds of public.

 

[NeuralControl]

Make it free and include commercials like HULU or CBS.COM. The money from the ads would be greater than the NOTHING they get from me now.

You think Apple or any company would give content away for free as long as it had commercials built in? Don't take this the wrong way; I am actually curious about this. Would this method work better as a streaming service like Hulu, or even renting?

 

[jettredmont]

If you are all so keen to pay the same for digital content with no physical media have you thought about the extra costs that you will be paying to create physical backups of this content?

This has all been passed on to consumers with no change in pricing structure to reflect that you are to be paying the bills for physical media.

When they can find a way for consuming content that is quicker and easier than an internet search maybe there is a viable business model.

True, but note that at $100/TB, media backup costs for a DVD are well sub-$1. (about $0.50 for a packed DVD-5 single-layer disk, about $0.10 for a highly-compressed movie, which I believe is about what iTunes movies and TV shows run per two "hours").

I'm not begrudging Apple the nickel I spend backing up each 42-minute show I buy from them. There are much bigger fish to fry.

 

[martint84]

We all have our own opinions on hulu, netflix, torrents, streaming from websites, and the traditional method of watching on our TV. The bottom line here is that at the current iTunes rates, TV shows just simply aren't an attractive purchase.

Whether or not Apple tries to bring prices down, introduces a subscription plan, or gives the content out for free by adding advertisements, they know they must do something if they want people to go to iTunes for TV shows like they do for music.

Apple sees that the current plan isn't going anywhere. Us, as customers, should be happy they recognize this and are trying to do something about it. As for the TV studios, maybe they'll come around when the magazines and newspapers post their initial sales numbers from iTunes.

 

[esquire360]

Seasons from iTunes costing more than the dvd or blu-ray is insane... my 54¢

 

[JAT]

Boy was the posting of this article ever timely, I just found myself searching on itunes for a tv show only to find that it was way to expensive, which unfortunately forced me to download it via a torrent site.

Forced? I'm so glad you are entitled to have anything you see. How nice for you. And I'm entitled to defend my property if you come on it.

Lucky me, my entitlement actually comes from state law.

 

[charlituna]

Apple becomes greedy!

more like the other way. Apple only gets a small cut of these sales.

but they have a point. a lower price and not holding back episodes until the DVD comes out would increase sales of the shows. so what if the episodes sell as singles. it's money. or reduce the season pass and give folks an incentive like some 'season only' behinds the scenes stuff.
and one thing Apple needs to push forward is closed captioning on the files. I'm shocked they haven't been sued by the Deaf Advocacy Groups over the lack.

This is exactly what needs to happen. I buy zero TV shows from iTunes because 1.99 is too much for something I watch once and delete. Make it .99 and I am going to buy more content.

okay so what about a choice. for the stuff you know you'll watch several times, you buy. the rest you have a 'rental' on. $30 a month you can have up to 10 rental files at a time, they have a 7 day viewing window to get your one viewing. of course you can re-download something if you want or forget you have it until it's too late. So long as you don't have 10 things already.

for a lot of folks, that would be cheaper than cable. especially if you can subscribe to shows and it downloads automatically.

TV episodes have to become cheaper.

They cost nothing on broadcast.

that's not exactly true. they don't cost you directly out of your pocket like a movie ticket or cable does. but there is a cost. it's the ads they show.

see every show costs a studio a budget and that budget determines the fee the network plays for the right to air the show. they take that fee and use it to determine the ad rates. Now the budget etc is all determined by a guess of how many people will watch the show. and to get the advertisers to pay the rates they sign a contract that the show will get that amount of people. If the show makes, great. if they super beat, better cause the advertisers have to pay a bonus. but if they fall under, the network has to give the advertisers free time in make good. too many make goods and the show is a failure and is cancelled.
of course they aren't really counting everyone. they count a sample. or rather the Nielsen Media company does. a sample of about 25k households in the US, selected in proportion to various demographics counted in the census (which means right now it's about 10 year old info).
Now while we say that all the downloads and such would make the networks more money but they are stuck in an old groove and still count that ad money as THE money of note. probably because they feel they can rely on it more than downloads. So anything that cuts into that ad money is bad. and while there's only a slim chance that one of those special Nielsen folks would switch to downloads and drop the viewing down by a few 100k, it is a chance and the networks won't take it. and we are stuck with reality tv crap cause it's cheap and only needs really low ratings (but gets fairly high ones so money in the bank)

 

[eastcoastsurfer]

The movie industry is generally making their content available on those exact same (sources of music) sites & stores. You can also get them (legally) from plenty of other website and webstores that doesn't sell music. While, again, I agree that their pricing on iTunes is poor, there is no piracy justification in how hard it is to legally acquire a movie or TV show... they're out there.

No, they are not. The movie industry is still going to great lengths to artificially segment the market. Some movies you can stream, some only buy in digital, some rent and buy in digital, some only rent on DVD, some only buy on DVD. When you make it that complicated to basically rent and watch a movie a single time, consumers are going to say f' it, I'll just to go TPB where I can find it and watch it right now. Why deal with going to 3 different online places to rent and find they are only selling and then have to check Redbox and finally end up in a brick and mortar Blockbuster who just happens to be out of the physical DVD?

What the movie studios are hoping is that the consumer will break down and just buy the movie instead of going through the above shuffle to find a movie. What I'm saying is that the consumer is going to take the easiest route (right or wrong) and just download the movie at home from TPB instead. By forcing consumers into a complicated value choice, the movie studios are ending up with zero dollars instead of some dollars.

 

[BoulderBum]

However, networks are resisting the move as they fear a repeat of the music industry's pact with Apple in 2003 to sell individual songs for 99 cents on iTunes. The price helped to simplify and boost downloads of digital music but dented album sales.

If the music industry hadn't bought in to the iTunes way of doing things, everyone would be downloading for free from elsewhere! iTunes wasn't the source of their troubles, technology is, and industry would do better to embrace rather than fear the inevitable changes and work sooner rather than later to negotiate a good deal in the newer business model.

I always used Napster or Kazaa back in the day, but now buy legal paid content exclusively from the iTunes store now simply because the music I want is so readily available.

I think the TV studios are in somewhat of a similar situation today. Eventually, people are going to want on-demand content ready to download and watch instantly at the push of a button. They'll want to be able to view the content not only on their TV, but also their portable devices, and take content with them wherever they go.

For me, I've mostly made that transition! I don't get live TV anymore and instead pay a couple dollars via iTunes for the shows I watch. The kids' and my favorites come with me on my iPhone, and I'm ready to watch them whenever I want via my Apple TV.

The question, I think, is not if most other people will want a similar approach to what I do, but when. In the studios' defense, I'm sure there WOULD be damage to their old TV networks and live shows, but if studios have a choice between offering paid content through iTunes or having people download free torrents and watch them on forthcoming devices like the Boxee Box, then they'd be better off choosing the former.

 

[HobeSoundDarryl]

No, they are not. The movie industry is still going to great lengths to artificially segment the market. Some movies you can stream, some only buy in digital, some rent and buy in digital, some only rent on DVD, some only buy on DVD. When you make it that complicated to basically rent and watch a movie a single time, consumers are going to say f' it, I'll just to go TPB where I can find it and watch it right now. Why deal with going to 3 different online places to rent and find they are only selling and then have to check Redbox and finally end up in a brick and mortar Blockbuster who just happens to be out of the physical DVD?

What the movie studios are hoping is that the consumer will break down and just buy the movie instead of going through the above shuffle to find a movie. What I'm saying is that the consumer is going to take the easiest route (right or wrong) and just download the movie at home from TPB instead. By forcing consumers into a complicated value choice, the movie studios are ending up with zero dollars instead of some dollars.

How about very quickly posting a list of 20 movies that are hard to find & legally rent for one-time use from the major rental sources? By "very quickly", I mean don't go spend the time to cherry pick movies that happen to fit your argument, but quickly post this list top of mind and let's see how big this problem really is for you.

Now, no doubt that iTunes selection alone is relatively thin, but part of that is that ANOTHER entertainment industry doesn't want to get itself completely under Apple's thumb. While I support the bulk of the pro-Apple arguments in this thread- including trying to win lower pricing concessions, etc- I can't say I really blame them given how things are for the music industry being under Apple's thumb.

If your beef with available rentals is pretty much hooked to just iTunes availabilty, I can more so appreciate your arguments. However, if your beef is that rentals are not available from any of the major sources, please quickly post the list of just 20... not cherry picked.

Unless those movies are extremely nichey (or still working their way into any form of distribution other than first run (at- or still in international- theaters), I'm betting you'll find there are legal sources of renting many- but not all- of them. Granted, that industry is still catching up to the music industry, but the latter had about a 5-year head start in iTunes.

 

[Michael CM1]

So since my fat cat, porsche-driving banker doesn't get it either, I should just walk in his bank and steal the money.

Since my fat cat grocery store executive doesn't get it either, I should just go into their grocery store and steal my groceries.

Etc.

Come to think of it, ALL of my bills are "too high" so I should just steal everything, and it should be O.K. because the fat cats at the top get paid "too much."

Shall we all adopt this mentality?

The Internet has unfortunately created a mass of really dumb people who think everything should be free. People complain about apps that cost 99 cents AND have ads. People complain about $1 to OWN a TV episode. Others claim they won't pay for news content online.

I wish all of these people would get a job for an industry that is harmed by stuff like pirating. Give someone a low-level job on the music industry, let 'em still millions of dollars in music, then fire his or her butt because of the lost income.

 

[HobeSoundDarryl]

If the music industry hadn't bought in to the iTunes way of doing things, everyone would be downloading for free from elsewhere! iTunes wasn't the source of their troubles, technology is, and industry would do better to embrace rather than fear the inevitable changes and work sooner rather than later to negotiate a good deal in the newer business model.

I always used Napster or Kazaa back in the day, but now buy legal paid content exclusively from the iTunes store now simply because the music I want is so readily available...

You know "Everyone" is an awfully large group of music consumers. Even with the convenience and ready availability of iTunes, etc, CDs still sell quite well. The Beatles just made a TON of money with nary a song on iTunes, Amazon, etc.

I agree that the music industry had to embrace digital distribution. I agree that the video-side also needs to fully embrace digital distribution. But both are embracing it... the latter simply being later to the party because their opportunity to party only really arrived several years later.

Just about every great TV Show currently being broadcast in first run is available commercial free via Itunes now. The beef for many seems to be in thinking that the commercial free price is too high. I feel that way too, but not such that I think "Everyone" should decide to just STEAL the show until the price is set at an (ambiguously, eye-of-the-beholder) acceptable level. All those people that put their creative efforts into creating those shows out of thin air deserve to be paid for the good work that they do. If there are no commercials (to pay them), and virtually no viewer fees paid for their creations, what do you think will happen to their ongoing efforts?

 

[charlituna]

At the moment I'm not willing to pay for TV content cos I already have a big black box in my house which gives it to me for free, but would happily watch free shows with ads.

but do you have cable. because if you do, like many in the country, you are paying for your content AND watching ads.

why not a lower cost to watch the shows ad free. with dozens of news sites, complete with video and youtube starting their streaming sports service, who would need cable.

the thing will would make this a slow process is screen sizes on computers v tvs and that there are no tvs that you can hook your internet into. so cable won't just disappear over night, but for some of us. and likely more when file sizes, download speeds and the studios backing down make it possible to have a 1080p HD episode as the norm.

To get a show in HD, it is currently 2.99. That is really high, and I don't think it reflects well on a forward-looking company that you have to pay extra to get better quality video.

I would gladly pay current prices and spend more money if Apple had better content and sooner release dates. The iTunes library still sucks compared to Netflix, which is not saying a lot.

Apple doesn't control the price. the Studios and Networks do. just like they control the release dates, which shows are posted at all, season pass or not and the whole DRM. which is why the article titles is Apple pressuring tv networks and not simply apple informs networks . . .

oh and the studios are pushing netflix etc into not renting DVDs for the first month of release. to encourage DVD sales. chances are they will try to pull back itunes and amazon as well. which is totally lame but studios aren't know for encouraging new media

i'd actually like to see all television go this way, instead of the ineffectual nielsen rating system, a system based on purchased episodes would probably lead to fewer good shows being cancelled.

yes but the downside there is that the networks don't like to start a show with a huge deficit and that's what would happen.

with the whole ad/ratings system, the advertisers pay at least a part up front.

what we need is an overhaul of the Nielsen system to have a better sampling AND the networks willing to factor in online streaming, itunes, Amazon etc into the 'viewership'

It should be $.99 for SD and $1.29 for HD. I don't want to pay double for HD content. They shouldn't charge extra for it anyway.

you are paying double because you get two copies. one for your ipod and one for the computer/apple tv.

now if they stopped that game and it was one file, I'd say that .99 and 1.29/1.50 is reasonable

and if the mystery creation can play 720 files they might do it that way. or have all three (just sd, just hd or both) as options

 

[Nermal]

While lower prices are good for some, how about getting the service into more countries? There is a world outside America/Europe!

 

[eastcoastsurfer]

How about very quickly posting a list of 20 movies that are hard to find & legally rent for one-time use from the major rental sources? By "very quickly", I mean don't go spend the time to cherry pick movies that happen to fit your argument, but quickly post this list top of mind and let's see how big this problem really is for you.

Now, no doubt that iTunes selection alone is relatively thin, but part of that is that ANOTHER entertainment industry doesn't want to get itself completely under Apple's thumb. While I support the bulk of the pro-Apple arguments in this thread- including trying to win lower pricing concessions, etc- I can't say I really blame them given how things are for the music industry being under Apple's thumb.

Unless those movies are extremely nichey (or still working their way into any form of distribution other than first run (at- or still in international- theaters), I'm betting you'll find there are legal sources of renting many- but not all- of them. Granted, that industry is still catching up to the music industry, but the latter had about a 5-year head start in iTunes.

I tried renting Inglorious Bastards (big movie I think) a couple weeks ago. I checked xbox live and Netflix. No digital renting options although I could have bought the 480p version off Live. WB just signed a deal with Netflix to delay the hard copy rentals of new WB releases 28 days. That's not even digital media they are delaying. WB is making it harder for people to rent their movies even the physical versions!

Don't even get me started on the complete lack of need for physically renting movies anymore. Sure, some people still can't DL a movie but physical movie rentals are still around as a way to create a false scarcity in the market. Why can't a move be available to rent digitally the day it is available on DVD?

 

[charlituna]

I totally agree with you on this, quality is key.

yep and we do get quality. but we also get cheap reality tv trash.

the trouble is that the Nielsen system is old and inaccurate. but Nielsen Media won't admit this and the networks won't force them to change. some 25k households are all that is counted on a regular basic. for 3 weeks over the year (in Nov, Feb and May) they had another 100k or so via paper reports. The results are sometimes amazing. Shows that were already canceled due to bad ratings and are burning off, end up getting higher scores but of course it's too late cause the contracts have been cut, sets are gone etc.

Technologies exist to easily count and tabulate millions of viewers. so what if it's not statistically sound to the demo percents. those percents are created by a census done only every 10 years anyway. So after 2-3 years it could be off the mark, after 5 years it very much could be. The only real concern the networks need to have is that no one is padding the numbers. But they could still send out a million invites with a pin number required to create a log on. I tell them I'm a woman, my age range and so on and there's the demos. each night I tell them what I watched. via my computer. they could even include a way for me to tell them that I had company during two of those hours and a quick demo of that person that was watching with me. computer adds it up and spits it out.

Plus the networks need to stop focusing on the ad money as THE funds and be open to including downloads and such. this is the way the world is going, they need to stop hiding from it. Embrace it.

Let me expand on #2. Inglorious Basterds came out on DVD. I'm thinking if it's on DVD it should be available from an on-demand service. So, I check xbox live. They wouldn't let you rent it, only buy it. Here I am trying to pay to rent a movie and I can't. I don't want to buy it (especially in 480p wtf?) and it is out but I still can't rent it? That's called horrible customer service.

that is the studios. not Apple or Amazon or Xbox. the studios control the dates and they want to push sales. Some of them want to push DVD/Blu-ray sales and want to hold back any digital of any kind (sales and/or rental) for at least the first two weeks. Not just for the money but because of the DRM issues. They still feel that movies and such would be tossed out for the world to steal (cause yeah you can break DRM), when in fact the majority of the files out on those nets are crappy cams anyway. And when it's not a crap cam it's been ripped off a DVD or Blu-ray (which is just as easy but a tad more time consuming)

 

[HobeSoundDarryl]

I tried renting Inglorious Bastards (big movie I think) a couple weeks ago. I checked xbox live and Netflix. No digital renting options although I could have bought the 480p version off Live. WB just signed a deal with Netflix to delay the hard copy rentals of new WB releases 28 days. That's not even digital media they are delaying. WB is making it harder for people to rent their movies even the physical versions!

Don't even get me started on the complete lack of need for physically renting movies anymore. Sure, some people still can't DL a movie but physical movie rentals are still around as a way to create a false scarcity in the market. Why can't a move be available to rent digitally the day it is available on DVD?

Inglorious Bastards is ONE movie, not a list. It's also a very new release. But nevertheless, I took a quick look around at the majors, and it is available to rent for $3.99 from Blockbuster: http://www.blockbuster.com/browse/catalog/movieDetails/416558 Then, on a lark, I took a peek in iTunes, expecting it to NOT be there; but it is there for rent at $3.99 too. I stopped looking at this point, but I bet it is available for rent at other major legal sources as well.

Now, I can believe that maybe a few weeks ago, when it was FIRST released immediately after it's theatrical run, it may not have been available from these and other sources. And yes, that is probably the Studios wanting to sell the movie first, before giving in to lower revenue rental options. BUT, that should be their right since it is THEIR property. If you or I don't want to BUY the film, we can simply wait a while longer for rentals to come available (as it obviously is now, just a few weeks later).

Is $3.99 too expensive? I still go to the movies and pay upwards of $9 for a (rental) ticket to watch it just once... to sit in a less than ideal seat, with an unpredictable crowd, only able to hope that they'll be quiet, etc. I would say that price is an eye-of-the-beholder proposition.

Should it be pirated because the owners of that content want to take a shot at selling it for a few weeks (days?) before they make it available via rental? NEVER. Stealing it is wrong. Too many people decide that STEALING is justified, and other movies like this one won't get made anymore. Then, we get to look forward to YouTube level quality where "film" content is made solely by not-for-profit volunteers. Yikes!

 

[superknoppix]

there is a typo in the title...

 

[HobeSoundDarryl]

Plus the networks need to stop focusing on the ad money as THE funds and be open to including downloads and such. this is the way the world is going, they need to stop hiding from it. Embrace it.

Agreed. But to do so, the need to trust that they can make their money that way. Commercials alone yielded $43 BILLION dollars last year. Subscription revenue added to that. Yet, even within this thread- fairly abundantly- you have people arguing that the commercial free version needs to be dirt cheap "or I'll pirate it for nothing".

A business wants to grow its revenues, not cast them aside and hope to somehow replace them on volume from a crowd that doesn't believe it should pay anything for it. Fortunately, not everyone is in that crowd, but the Studios are scared that too many are. $43 BILLION is a lot of 49 cent, 99 cent, or $1.99 transactions, which also needs to replace the subscription revenue cuts they count on as part of their existing revenue stream.

A stance that they don't deserve to be paid that much misses the point... just like anyone saying any one person reading this thread doesn't deserve to get paid as much as they do for whatever they do.

 

[javalizard]

Music vs Video

So Apple is trying to make TV shows (in essence) the same cost as a music download?

That's crap. I'm calling Bull-Crap on the music industry. The day it costs the same to produce one episode of _____ on TV as it does for a musical artist to record something 1/10 to 1/3 as long will be the day. This just shows how bloated with parasites the "music industry" has become.

How about this: Apple cuts prices of music from $0.99 to $0.19 per track and $0.12 goes to the artist(s) instead of the record execs? Remove all DRM and I might actually start buying music again!

I refuse to buy music and video from the iTunes store on principle because of the DRM... Now i have another reason: It all costs WAY too much and that money is going to people (record industry people) who have the most asinine world view (especially when it comes to music) who only use the money we give them to retain and extend their hegemony. No. I'm sorry. I decline to participate in that model. You couldn't pay me to participate in this. Music consumers are only screwing themselves in this system. Artists that want or need the "music industry" as it is should be dinged too. It's a failing model.

It's not Apple's fault the RIAA cartel/Terrorists are so messed up. I wish Apple had some kind of marker indicating music that didn't participate in their messed up system. (as in, the artists gets paid and no DRM).

The RIAA (and MPAA for that matter too) deserves to be banished.

 

[AidenShaw]

I've always failed to see why people complain about this. Ya DRM sucks, but your DVDs will only work on a DVD player, and BD on a BD player.

Do you mean that I haven't been listening to CDs and watching my DVDs on my BD player the last couple of years?

Pwned.

 

[Garsun]

Wide range of pricing

Instead, Apple says: all TV shows- regardless of quality shall cost the same. Now Apple is saying: all TV shows- regardless of quality shall still cost the same... but we want that same price to be lower than it is now.

Is the best show on television worth the exact same price as the worst show on television? From the content producers point-of-view: definitely not. The model they know sells commercial spots. And more popular shows command higher commercial revenues than less popular shows. Yet here's Apple dictating fixed pricing for all shows. If you put yourself in their (content owners) shoes, it's easy to see a general distrust for- and resistance toward- playing ball with Apple.

While I'll agree that "Current Run" programs could use a price drop many of the older shows are currently very reasonable.
For example Star Trek: Enterprise is currently priced at $12.99 for 26 episodes. I find a price of just under $0.50 an episode to be reasonable.

Unfortunately the single episode price is still stuck at $1.99. However I would probably never buy just a few episode of one of these older programs,