More TV Executives Weigh In on 99-Cent TV Show Rentals: Viacom Out, CBS on the Fence

[HobeSoundDarryl]

"We value our content a lot," he said. "We don't think Apple has it quite right yet."

Just keep waiting like you have been. Wait until you are finally extinct.

And when all the content producers are extinct, are we going to have anything great to watch?

If we value what they produce, we should expect to pay something for that value. If what they produce costs $X, and we believe they should make a fair profit above $X, we should be willing to pay through some form to reward them with the $X + that profit.

If we see no value in what they produce, we won't pay for it... but we also wouldn't care to watch it either. No loss.

Wishing them extinction means you don't even get the choice to see if what they have is worth watching. I'd rather have the choice, and choose to pay- or not pay- based on the quality.

Some of you guys would have us end up in a world where there is no professionally created media at all. I just can't get too into camcorder-driven productions via youtube vs. well written, well acted, well produced, etc programming & movies & music.

 

[Astro7x]

I REALLY don't get what the big deal is.

I can do to the library and rent all 4 discs of a TV season for $4
I can go to Blockbuster and rent all 4 discs for $20.
I can use Netflix and rent all 4 discs for $8.99 in a month + a few more discs in there as well.
I can use Hulu Plus and view an entire season over a month for $10.

But if I pay $22 for an entire TV season on Apple TV that's not a good price point? Yeah, I understand you get it within 24 hours and not 9 months later on DVD, but if I am a demographic that will only rent and not buy I would think that they'd make more off of the Apple Store instead of any of the other 4 methods I chose since I'm still paying the most money.

I can see them not wanting people to rent instead of buy. But it seems that there is a group of people who think $1.99-$2.99 is too much to buy an episode and would rather rent, then you have the other group who would rather pay $1-$2 more and own it and think the rental model is too expensive.

I haven't really seen any people on the boards say something like "This rental model is really attractive. I use to buy all my shows for $2, but now I can save $1 by renting since I only view them once anyway!"

 

[ChrisA]

Why would people pay even $0.99 to see a TV program that has already been on the air? Couldn't you just record the broadcast for free. I don't watch TV but this is what my wife does, records everything then she's able to skip commercials.

If you have something like Myth TV (it's free) it can detect and skip commercials automatically. I don't see the point of paying anything for broadcast TV. Well OK maybe the fee is a tax on people who forget to program the DVR.

 

[AidenShaw]

Remember (and all Internet TV hopefuls miss this): the TV model is "turn on, pick one of a dozen channels, watch whatever is showing".

I broke from that broadcast model when I got my first TiVo.

When I "turn on", I pick from the several hundred hours of HD programming that my TiVo has downloaded because I've either asked it to record a series, or because TiVo thinks that I might like the show.

Internet TV can't do that now, because bandwidth is too scarce or expensive to download terabytes of shows that "you might like". (It's not a billing issue, the software could easily charge only for shows actually watched, and ignore the pre-fetched episodes.)

 

[HobeSoundDarryl]

I REALLY don't get what the big deal is.

I can do to the library and rent all 4 discs of a TV season for $4
I can go to Blockbuster and rent all 4 discs for $20.
I can use Netflix and rent all 4 discs for $8.99 in a month + a few more discs in there as well.
I can use Hulu Plus and view an entire season over a month for $10.

But if I pay $22 for an entire TV season on Apple TV that's not a good price point?

Take the content owners point of view:

• You get paid by the network for the show- big bucks
• You probably get paid for the commercials that run on the first run
• You probably get paid for the commercials that run in syndication
• You get paid for syndication
• You get paid for the DVD purchases made by the library, blockbuster, netflix, etc

The 99-cent rental cuts out all the commercial revenue. It is a kind of immediate syndication, but you only pay 99 cents for it. You probably don't buy the DVD set. You probably don't rent it again at blockbuster or netflix so they stop buying so many to rent to people like you. If they go through existing channels, all these other companies are paying them for some kind of opportunity to show it to you. Accumulate all those other companies paying for it on your behalf, and it's probably costing a lot more than 99 cents for you to see it. The rental approach cuts all them out; thus nobody is paying but you.

If you look at it at a micro level, it looks like they would make a lot more in an internet rental model. But look at what just about everyone on the music side says about iTunes: both the music companies and musicians alike don't like the loss in revenues that per-track digital yields. Even the Beatles- not exactly dummies at how to make a lot of money on music recorded a long, long time ago- don't even want to play ball with Apple yet. Only Apple is really winning with revenues based on iTunes music, and that's because it helps drive sales of hardware.

There's a lot of cost in professional video production, and a lot of money in it for those that put on a good show(s). A lot of that surplus fuels the risk that yields some good shows, by testing a lot of bad and good shows. If video goes like audio, the pinch is on. As "we" save all this money by just getting to buy the shows we want, lots of borderline shows that could be great never even get funded. Lots of talented people don't get paid. Lots of potential cream never gets a chance to rise to the top.

For many years now, the ability to produce a show and sell it via the internet direct to consumers has existed. All the "greedy middlemen" could be cut out so that the money you pay all goes straight to the artists that make the show. Can anyone name 1 (ONE) mainstream popular show that has worked that way? None of the production companies are forced to work through all the middlemen players, any more than your company is forced to sell whatever it sells through any given middleman. So why doesn't any production company jump on the apparently more lucrative opportunity of renting their productions directly to end users? Because they make more money in spite of all the middleman costs doing it "as is".

It only looks like a good deal for the studios from our perspective. If it looked that lucrative from theirs, they would be all over it. And if their music industry cousins were loving the relationship with Apple- and raking in huge revenues & profits because of the relationship- the video guys would be fighting each other to do whatever Apple wants to get in that same bed. Instead, they don't want Apple to rule them all. Why?

 

[Analog Kid]

Is that a normal renting price in the US for DVDs or blu rays? I'm asking because I pay around 1€ per DVD normally. And when I prepay 50€ I get 100 DVDs or blurays which equals 0,50€ per DVD/bluray. So $4 for just one DVD is way to much IMHO.

I don't know what "normal" is here. Normal is probably set by Blockbuster, and I think they're in the same range. A buck a disc would be nice, but I'm not sure how they'd stay in business-- the place is pretty much empty as it is. I think Netflix is killing 'em, and I don't think it's because of price.

When I look at the relative pricing, relative to buying the disc or going to the theater, it's probably about right as long as I remember to return the damned thing.

(which reminds me...)

 

[supmango]

I doubt seriously that I will ever switch back to my cable once I get my Apple TV. Between the 99 cent rentals and Netflix, I have no need to waste time watching commercials. If other networks don't want to jump on the bandwagon, thats fine. I just won't be renting their content. Its simple really. They will either learn, or be left to rot. It does not really matter to me one way or another.

 

[mambodancer]

99 cents is still TOO much. That comes out to about $20 or so per season of a US TV show to watch once. At that price, if you watch more than 1 or 2 TV shows you're better off paying for cable.

Have to agree. The price isn't right. Episode should be free or, say .49$ for current shows.

This kind of back and forth is really why AppleTV and GoogleTV won't be successful except as a conduit for Netflix (as long as that stays viable) and other web services. Neither Apple nor Google, despite what each company would like to do, controls the content and it's delivery. They also don't control the ISP's so when companies like Comcast put bandwidth limits and caps (250GB) it's also going to be a long time before even 1080p becomes widely available.

Take a look what happens to Cable TV when there is a dispute with a network as what happened recently in New York. The Network pulled their shows from the Cable Company until the dispute was resolved. Same kind of thing happened to Apple with NBC when they yanked their content from the iTunes store.

It'll likely change when the networks and movie industry start making less and less from DVD (and BluRay) sales, cable TV and advertising.

 

[mambodancer]

I doubt seriously that I will ever switch back to my cable once I get my Apple TV. Between the 99 cent rentals and Netflix, I have no need to waste time watching commercials. If other networks don't want to jump on the bandwagon, thats fine. I just won't be renting their content. Its simple really. They will either learn, or be left to rot. It does not really matter to me one way or another.

This is exactly the case in our household. Network (ie, sequential programming) is dead as far as I am concerned. I will not watch commercial fed programming. The interruptions make watching broadcast/cable TV painful. I'd rather pay to buy episodes of shows I like without commercials, or, as the HULU model, would be willing to watch shows with a very short commercial embedded in it. After that, I'll simple wait for the DVD's to be released and rent it from Netflix or watch them for free from our library.

I like the new AppleTV because it integrates Netflix into the same UI with my iTunes library. I don't have to use a remote to switch to a different device on a different input channel with a different UI on my TV.

 

[axual]

Not surprising ...

These network execs are living in the last century or another planet. I watch about 60 hours of TV a month and pay about $60 a month on cable TV. So exactly how much more do these brilliant network executives want me to pay?

I realize they might have to cut back on their limo rides, 3 hour martini lunches and expensive vacations ... too bad. Produce something worth more than 99 cents, and we might consider it.

Otherwise, tell us how the weather is on Neptune.

 

[Eric-PTEK]

Here is my illegal 2 cents.

My wife and I love Top Gear, and we get our shows 1-2 hours after they are on in the UK.

3-4 years ago you hunted and hunted for torrents of TV shows. Quality was marginal, download times were long.

Regardless of its legality it is so easy these days to download torrents of TV shows. Quality is fantastic, download times are extremely short. There is a certain TV show web site out there that is more up to date than my Dish network guide.

These are the same shows I'd watch on regular TV. Except for Top Gear its for when the DVR won't catch the 3rd show, or we missed something.

The price point isn't 'bad', but its wrong. We watch 12-14 shows during the TV Season, so 4 weeks that a best case of $48 per month to $56 rounding up(is there tax?).

So subtract that from the average $80 to $120 a month a consumer who can afford these types of devices spends. On the low end I'd need basic local channels and that for $40-$50 a month.

I can get that...I can also get all those shows Steve wants me to rent for .99 for the same price as the rental.

Without the hassle, without technical difficulties, without having to wait for them to download, etc.

iTunes and Apple in general are notoriously slow to download. On a good torrent on a good TV show I'll max out my connection at 20mbps.

The experience needs to improve, the value needs to improve.

There is no value in renting shows for .99, or renting movies for more than what I pay at the video store, for lesser quality.

I had one experience with iTunes and TV shows. I bought the season of Kings because we started watching it late. After 4 hours of fighting with Apple and iTunes over why it kept downloading over and over and would not play I gave up and in 2 hours had the entire season in HD from a torrent site.

I have zero problem paying for any of this, but the value has to be there in the experience.

The fact is there is more value in other methods, legal and not so legal. It seems you replacing a system that works just because.

I'll buy one to stream stuff in the house however, but not to buy content with it.

BTW we haven't seen a commercial in years, we never watch live TV, it's all recorded on the DVR and we'll watch even an hour later to skip the commercials.

 

[PlayUltimate]

Thing is, bulk of viewers want their preferred shows dictated to them - which requires a network TV channel.

Remember (and all Internet TV hopefuls miss this): the TV model is "turn on, pick one of a dozen channels, watch whatever is showing." Whoever makes an Internet TV device that dead simple (or at least IQ 60 simple) with sufficiently engaging shared-experience material will win.
Apple TV still misses that winning paradigm. It will for $0.99 get you what you request, but most viewers don't want to request, they want to sit back and be given with zero effort.

I think there is something to be said about the passive nature of TV. As you allude, many people sit down and flip channels and may even stop somewhere to watch a show they would normally never watch. The passive nature of TV does not exist on an Apple TV. The Apple TV's rental model is active in that the person watching actually has to chose, and pay, what to watch; completely different model.

 

[samcraig]

Last I checked, some of the networks like FOX and PBS are ONLY broadcasting in 720p.

The irony here is that it seems YOU have been taken in by the snake oil marketing. 720p is just as "true" HD as 1080p. To say 1080p is the only "true" HD implies that any resolution greater than 1920x1080 are no more HD than 720p. Take the video shot from a Red video camera for example.

HD is a standard of which 720p is the minimum resolution. Furthermore, since we are talking about resolution here, on small screens like iPods, iPhones, and TVs 32" and smaller there is no appreciable increase in quality. It's basic math.

The issue isn't resolution. The actual HD issue is BITRATE. At present, internet connections can't handle TRUE HD content which even comes remotely close to that of Blu-Ray (no surprise that Apple refuses to support it). And uncompressed audio as well. What most consumers get in their homes via cable and/or streaming services is "ok" - but it's by NO means true HD.

Until you're able to receive streaming files closer to 25 gig for a movie for great audio and video bitrates - then anyone with an HD set is not getting true value from their hardware. Period.

 

[mambodancer]

The issue isn't resolution. The actual HD issue is BITRATE. At present, internet connections can't handle TRUE HD content which even comes remotely close to that of Blu-Ray (no surprise that Apple refuses to support it). And uncompressed audio as well. What most consumers get in their homes via cable and/or streaming services is "ok" - but it's by NO means true HD.

Until you're able to receive streaming files closer to 25 gig for a movie for great audio and video bitrates - then anyone with an HD set is not getting true value from their hardware. Period.

And what's interesting about that is the cap imposed by Comcast at 250GB. That means, if I understand correctly, you can only stream 10 movies at about 25GB per month!

 

[baller1308]

I agree $0.99 is too cheap. I want to pay more, like $4.99 per episode. Oh wait, not really, dumb executives.

 

[Analog Kid]

So, in the new commercial-free internet model, we just need every adult in America to pay $151/yr to wash out the revenues from commercials, or each of about 120 million households to pay about $392/yr to wash out the commercial revenues.

Wow, it sounds to me like the advertisers overvalue the content rather than Apple undervaluing it. $400 per household in a year nobody is spending money? I wonder how they justify that expense...

 

[Jimmetry]

Oh very clever These guys really do not understand the market.

 

[PlayUltimate]

Wait until Apple TV gets apps such as CBS' tv.com.

 

[HobeSoundDarryl]

Wow, it sounds to me like the advertisers overvalue the content rather than Apple undervaluing it. $400 per household in a year nobody is spending money? I wonder how they justify that expense...

No, it's kind of like the lottery. Lots of people pay for a chance to make something off of what they pay. The advertisers pay for you for a chance that you might see what they are advertising. The network pays something for you for a chance that you might see the ads that will show while they are showing it. The syndicators pay for you in hopes that you'll watch that time and see the ads that they will show while it is on. Blockbuster & Netflix, etc pay for you in hopes that you'll rent and/or retain your subscription with them so that you'll have access to the show. The content producers know a number of people will buy the DVD set, then buy the BD set, and those revenues also help motivate them to create new shows, helping to pay for shows for you that you don't even know yet if you will want to rent/buy. Etc.

The current model has a lot of companies paying on your behalf. It's worth that much to all of them and results in profitable business for all of them. IN turn, netflix & blockbuster subscribers have plenty of things to rent & watch. Click on the TV in prime time and there's plenty of stuff to watch at any given time. Click on the TV outside of primetime and there's plenty of syndicated stuff to watch at any given time. Of course, not all of that is good, but every show every sold appeared to be a potential hit when it got funded. They don't figure out if it is good or bad until after it's had at least a pilot, and more often a few episodes to sink or swim.

In this new model that sticks it too the greedy middlemen, all those players that pay for you get cut out. It ends up being just you and the producers. The producers are just like any other company. They want to make more money this year than last. Just like Apple. Just like whoever you work for. If it comes down to just them, Apple (middleman) and you, one the latter 2 has to make up for the revenue shortfall. Will that be Apple or will that be you?

Else, the quality of the programming would have to adapt down to reflect the much lower revenues in a new model where most seem whine that 99 cent rentals are still way to high. Can you say 24 hours of Kate+8? Or worse?

You tube has a lot of "programming" that is free. Much of it ad-free too. Do we really want a world where that becomes the best quality programming available to us?

Again, in spite of Apple owning the audio space, you don't see any music companies or musicians raking in record revenues & profits in the new arrangement. If you did, the video cousins would want to jump in that same bed with Apple. There is such a fight against allowing Apple to get a hold on video like they have on audio. If it was so lucrative for ANY of the content producers, why wouldn't they be begging Apple to put all they have in iTunes?

 

[maflynn]

Why would people pay even $0.99 to see a TV program that has already been on the air? Couldn't you just record the broadcast for free.

Bingo

This is why apple-tv so far (in prior versions) has not been a success. The product is not giving consumers any added benefit over the current watching habits. Watching TV is easy, turn on the tube, change the station to see the desired show.

Apple-tv, wade through a menu, find what you want, rent the show, and wait for the streaming to either finish or get to a point where its watchable. People don't want to spend money on something that they get for free (or perceived free and tv shows are perceived free as most consumers don't factor in cable costs) and they don't want to wait while its downloading.

Apple's iPod, iPhone, iPad all are huge successes because they provided the consumer with greater functionality/ability then what was currently available. Not so with the apple-tv. Sure, some apple fanboys will buy it, some folks who live by their TV will buy it and some folks who don't want cable will buy it as an alternative but those are niche. Apple has not provided enough justification/benefit for the regular consumer to buy it.

 

[drober30]

I just don't get it? Who rents TV shows? I guess people who dont already pay for cable?

$1 for Red Box or Block Buster Express Hollywood movies are a good deal.

Start renting all movies for $0.99 and even with the 24hour limit after pressing play, it would be a fair deal.

Blockbuster filed bankruptcy for a reason. $4.00 is to much for a rental!

 

[samcraig]

I just don't get it? Who rents TV shows? I guess people who dont already pay for cable?

$1 for Red Box or Block Buster Express Hollywood movies are a good deal.

Start renting all movies for $0.99 and even with the 24hour limit after pressing play, it would be a fair deal.

Blockbuster filed bankruptcy for a reason. $4.00 is to much for a rental!

Blockbuster filed bankruptcy for several reasons. The cost of renting was only a fraction of it. They suffered mostly from over-franchising. In major cities - it wasn't uncommon to have stores a block or two away from each other. And the cost of inventory was higher than say, Starbucks.

Real Estate was the major contributor. Now also factor in that cable companies began offering movie rentals (and at the appx same price point) + netflix + other streaming services and it was no longer relevant to go to a brick and mortar store.

It wasn't just about price. It was about not needing physical stores and paying all those employees, rent, etc.

Millions of people do PPV and those are 2.99/3.99/4.99 for movies depending on what movie/what service.

 

[Rot'nApple]

"There are two networks in and two networks not in. Let's see what happens and maybe we'll talk again in January, maybe we'll talk again next year."

Uh, ONE network, Les.

Jobs on BOD of Disney/ABC, I'd love to see Disney/ABC say no... I dare them! Ain't gonna happen... It's a given...

So out of the other independent stations....

And some of you out there who will despise this and you know who you are....

FOX. helped. Steve's. bacon.

 

[jawporta]

And????

So if NBC and CBS are not on Apple TV for 99 cent rental, you mean my only other options are to watch it for free on their websites or bit torrent? Mmmmmm, I'll take free.

 

[maflynn]

Don't forget all of the cable networks NBC and CBS own, so its not two networks but a lot of the cable channels

How will apple-tv work with the shows that are discovery. For instance, I see on the itunes store, I can buy survivor man. Will those shows be available to watch on apple-tv since those are purchases and are geared towards storing on a hard drive, something that the apple-tv device no longer has.