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

[HobeSoundDarryl]

Blockbuster filed for bankruptcy (again) because they played the debt game: refinance the debt, refinance the debt, refinance the debt, file bankruptcy to try to discharge as much of that debt as possible, then sell debt, then refinance the debt, re-refinance the debt, re-re-refinance the debt, then file bankruptcy to try to discharge as much of that debt as possible. Some businesses do this over and over until finally no one is willing to loan them money, at which point they file a final bankruptcy and completely go away (like Circuit City).

Who does the above help? Bankers. That's part of why there is such greased wheels for our national debt too. It's the ultimate debt to finance, refinance, re-re-finance, etc, because the nation's subscribers have no choice but to pay the monthly subscription (known as taxes). However, it too can get to a point where no one will want to loan the U.S. any money, at which point we could experience Sovereign bankruptcy. Perceptually, our leaders must believe that having a nuclear arsenal is a good deterrent to our "bankers" getting to actually "foreclose", but all that's another topic.

Back on topic, a business doesn't prosper by driving the products it sells or rent to zero, nor handing pricing over to another company like Apple, who has no real skin in the game of whether iTunes store content makes money for it's creators or not... Apple just wants to sell more hardware.

I'm not really defending Blockbuster here. Netflix is a smarter version of Blockbuster. But THE answer is not handing it all to Apple, nor is it pricing the offerings toward zero. If the latter, there is little-to-no money to fund new shows, or to keep marginal shows alive long enough to find their audience. Lots of much loved shows were not hits out of the gate. In this model, every show would have to be an immediate hit, as there would be little incentive to consider anything more than apparent sure things.

The world where all content is commercial-free and near free in cost is the world where the quality of the content is pretty much what we can get on youtube now... commercial free and no cost. You don't get professional, polished productions from volunteers willing to put all that time into them and then making little to nothing on them. Watch the credits sometime. All those people get paid for their contribution to each show. Where does that money come from in commercial free, near zero rental world... especially for the shows that are not yet hits, but could be if they had a chance?

 

[HobeSoundDarryl]

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.

And if everyone followed your wise lead, there would be no new shows produced so that we could watch them for free, or steal them as you seem inclined. That's clearly the way to go. Who wants ongoing professional productions?

Let this other company- Apple- tell you how to price your products, or I'll steal them. Yes, that's the right way for things to go. Genius.

I hope Apple soon decides that houses & cars- regardless of quality- should all be 99 cents. If not, I'll just steal them, because only Apple knows the right prices of things. Everyone else is greedy if they don't let Apple dictate pricing.

 

[SeattleMoose]

Ping...marketing Data Collector

I suspect Apple was pressured by the record industry to add a way for them to track "popularity" of their products and that is why the lame "Ping" now exists.

Only real use....tweeners pinging each other over latest Bieber song.....

 

[DakotaGuy]

Broadcast TV is a waste of RF bandwidth and the networks only like shows designed for people with an IQ of 60. They both need to die.

You are making the assumption that everyone has enough money to pay for their content and if they don't... cut them out.

Broadcast TV serves an important role even if many people choose to pay for their content. You would be surprised at how good HD looks over broadcast. Better then cable or satellite. It is also an important form of communication if an emergency ever takes place.

 

[mrochester]

Blockbuster filed for bankruptcy (again) because they played the debt game: refinance the debt, refinance the debt, refinance the debt, file bankruptcy to try to discharge as much of that debt as possible, then sell debt, then refinance the debt, re-refinance the debt, re-re-refinance the debt, then file bankruptcy to try to discharge as much of that debt as possible. Some businesses do this over and over until finally no one is willing to loan them money, at which point they file a final bankruptcy and completely go away (like Circuit City).

Who does the above help? Bankers. That's part of why there is such greased wheels for our national debt too. It's the ultimate debt to finance, refinance, re-re-finance, etc, because the nation's subscribers have no choice but to pay the monthly subscription (known as taxes). However, it too can get to a point where no one will want to loan the U.S. any money, at which point we could experience Sovereign bankruptcy. Perceptually, our leaders must believe that having a nuclear arsenal is a good deterrent to our "bankers" getting to actually "foreclose", but all that's another topic.

Back on topic, a business doesn't prosper by driving the products it sells or rent to zero, nor handing pricing over to another company like Apple, who has no real skin in the game of whether iTunes store content makes money for it's creators or not... Apple just wants to sell more hardware.

I'm not really defending Blockbuster here. Netflix is a smarter version of Blockbuster. But THE answer is not handing it all to Apple, nor is it pricing the offerings toward zero. If the latter, there is little-to-no money to fund new shows, or to keep marginal shows alive long enough to find their audience. Lots of much loved shows were not hits out of the gate. In this model, every show would have to be an immediate hit, as there would be little incentive to consider anything more than apparent sure things.

The world where all content is commercial-free and near free in cost is the world where the quality of the content is pretty much what we can get on youtube now... commercial free and no cost. You don't get professional, polished productions from volunteers willing to put all that time into them and then making little to nothing on them. Watch the credits sometime. All those people get paid for their contribution to each show. Where does that money come from in commercial free, near zero rental world... especially for the shows that are not yet hits, but could be if they had a chance?

I agree with this, excellent post. Apple needs the content more than the networks need Apple.

 

[Epicurus]

Let this other company- Apple- tell you how to price your products, or I'll steal them.

I'm thinking that NBC was the one to set up the free shows on NBC.com, not Apple. NBC set an expectation that their shows are free online, and Apple is the one trying to reestablish a market price. Apple tried $1.99, then $2.99 for HD, now $0.99, all to push back against the idea of "free" tv shows. What I don't get here is how anybody can keep a straight face when a network executive says Apple is devaluing their content when the show is streaming for free on their own website.

And before anybody gets upset, I fully understand that everybody here (Apple, NBC, CBS, etc.) is in this game to make money. I just happen to prefer watching shows without ads, and Apple is the only one offering that (aside from DVDs, which are kind of beside the point).

Furthermore, regarding Netflix, I'll just quote Ars: It's hard to understand why iTunes rentals "devalue" content while instant, unlimited, on-demand access for the price of nine iTunes TV rentals is so great that NBC/Universal's Frances Manfredi "applauded" the deal it reached with Netflix.

 

[Analog Kid]

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?

I think you missed my point. I understand how the model works. What I'm constantly amazed at is that advertisers think a few minutes a day of the average household's attention is worth $400 a year. I haven't actually had a television for years, so it's hard to use myself as an example, but last I checked half the advertising was Coca Cola and Budweiser. When they "win the lottery" as you put it, the viewer buys a six pack of beer or bottle of coke that they wouldn't have purchased otherwise. Of that six pack, some of the purchase price goes to the vendor, some to the transporter, wholesaler, deposit on the cans, and finally to the firm funding the advertisement.

Would the average household beer consumption fall by hundreds of dollars if it weren't for advertising? If not, then advertisers are overvaluing content.

 

[HobeSoundDarryl]

Furthermore, regarding Netflix, I'll just quote Ars: It's hard to understand why iTunes rentals "devalue" content while instant, unlimited, on-demand access for the price of nine iTunes TV rentals is so great that NBC/Universal's Frances Manfredi "applauded" the deal it reached with Netflix.

Because, the video guys don't want to get under Apple's thumb like the audio guys. It's not that great a place to be for the Audio guys. None of them are happy about it. And they're doing everything they can to try to get themselves out of that position (which is why you can often find better pricing for audio elsewhere). If they were raking in the revenues & profits from the iTunes deal, why would they seemingly further cut their own throats giving companies like Amazon better pricing?

Thus, the video guys are happy to do deals with lots of other players better than the deal they want to give Apple, because they don't want Apple to own them like the audio guys. Again, Apple has a few companies in on 99 cent rentals, but some of that same programming can be owned by paying 99 cent for it at Amazon. Dealing with Apple from "their" end is not a lucrative proposition. It's only really good for Apple (because it drives the sales of Apple's hardware).

Furthermore, I saw an article a few days ago that talked about the history of Netflix. Earlier on- when Netflix had little money- the industry put them low in the (what was referred to as the) "pecking order", because other buyers of the content would pay a lot more than Netflix could. However, now Netflix pays a lot more for rights to the content, which is partly why Netflix seems to be doing content deals much better than Apple.

Apple could learn from this by coughing up the dough to out bid Netflix, at which point the content owners would be much happier since they would be getting more toward what others are willing to pay for similar kinds of deals. But Apple doesn't see enough value in that kind of deal, they just want to pass along the content to subscribers, and price all content at about the same rental rate. No surprise that the owners of that content wants to do deals with others who will pay them MORE than Apple's deal for that same content. If you were in their shoes, would you do any different?

Apple could just cut out the networks all together and become their own production company, fund development of shows that they could then price as they see fit on iTunes. More simply, they could be their own incarnation of an HBO. I would even say that they have- and have ready access to- talent who has knowledge of what it takes to do that very thing, given Jobs experience with Pixar and Disney. Why don't they just do that? Just about every single great show starts out as a script/idea being pitched to suits at production companies. The pitch is basically begging for financial backing to create a pilot. Apple certainly has the cash on hand to back 1000 new shows. And if this content is so lucrative for the "greedy studios" it can be just as lucrative for Apple too, who could then bypass the networks, cable & satt middlemen, local stations, et all, and put it exclusively on iTunes and rent it for less than 99 cents commercial-free straight to us willing renters (who demand a "fair price" somewhere near free). Why don't they do that? Think.

Lastly, the NBC Netflix deal probably has a lot more to do with winning approval of Comcast buying NBC than because NBC suddenly sees the light and wants to do that kind of deal with anyone other than Hulu. I bet if there was no Comcast buyout, that Netflix deal wouldn't have got done. And I bet after Comcast owns NBC, it's only a matter of time until that deal expires... unless it somehow proves to be a lot more lucrative than face value today.

I think you missed my point. I understand how the model works. What I'm constantly amazed at is that advertisers think a few minutes a day of the average household's attention is worth $400 a year. I haven't actually had a television for years, so it's hard to use myself as an example, but last I checked half the advertising was Coca Cola and Budweiser. When they "win the lottery" as you put it, the viewer buys a six pack of beer or bottle of coke that they wouldn't have purchased otherwise. Of that six pack, some of the purchase price goes to the vendor, some to the transporter, wholesaler, deposit on the cans, and finally to the firm funding the advertisement.

Would the average household beer consumption fall by hundreds of dollars if it weren't for advertising? If not, then advertisers are overvaluing content.

The motivator is that they don't know what effect it has on any single person's buying behaviors. For all they know, you might be a family of 20 who sees one coke or beer commercial and immediately go out and buy cases of coke/beer, and continue to do so for the rest of your lives (that would certainly make it worth it to them even if only a small number of households did that). However, even if they just get a few individuals like you to try their product, someone(s) else might notice you trying it and then become a long-term consumer.

They spend the ad budgets because they believe the ROI is worth it. They can't know for certain, but that belief fuels a flow of funds on behalf of everyone, that helps pay for the production of the content aimed at motivating all of us to see the ad. They wouldn't spend that marketing budget if they didn't think the return was worth it. And good thing, because that ad spending added up to about $47 Billion last year that the end consumer did NOT have to pay to help fund the production of all the shows that we like to watch as individuals.

I just did the per household math for that $47 Billion in this or the other thread, and it worked out that those commercials paid for more than $30/month per household in some kind of commercial-free iTunes "all-you-can-eat" equivalent subscription. In other words, if the much dreamed about subscription arrived at $30/month, those on the receiving end wouldn't even make as much as they made ONLY from the commercials, even if Apple didn't take their cut.

If all advertisers decided to buy into the idea that killing their ad budgets would not yield much of a drop in the consumption of all things advertised, they'd probably kill their ad budgets. They don't spend it because it doesn't work at all; they've tried cutting advertising and they soon see sales fading. Stop spending to pitch your products and your competitors will step in and take share from you. If they are unable to take share, you were shrewd to save that ad budget this year. However, if you lose share for pinching pennies, you might soon be digging pennies out of the couch to stay afloat until you find your next job.

The industry lives on more than just the commercial revenues. Strip those out and they have to be made up for somewhere, or quality and volume of programming would need to cheapen and/or plunge. In the dreamed-about model that involves only Apple as middleman feeding us individuals commercial-free programming via iTunes, the only players left to make up for those revenues is either Apple or us. It's easy to surmise who would need to foot the bill if it came down to just those 2 choices.

Thus, if it came to pass, and if it got lots of traction (everybody chose to go that way), it seems inevitable that programming would significantly cheapen and every show would have to be a hit on the pilot episode, so stuff like Seinfeld would have never had a chance (since it didn't find its audience for a good while after the pilot).

Too many people think the value of the programming is their cable/satt bill divided by the number of channels they watch or the number of shows they watch. They think an ala-carte model where they could just pick the X (number of) channels they watch out of all channels on cable/satt would reduce their monthly bill by the percentage of X compared to the total number of channels in their current cable/satt package. That's not true at all. By bundling "crap channels" with the good ones, the owners of those channel groups have a lot more channels on which to sell commercials, which cumulatively help pay for all programming on our behalf. Even though "we" might choose never to "watch that crap", the revenues from the perception that someone is watching it helps pay for the production of some of what "we" do watch. Ala-carte concepts would kill the "crap" channels, which would kill lots of revenues from commercials and cable carriage fees, which would need to be made up somewhere. Again, in the imagined model- what seems to be a maximized incarnation of ala carte where we're not picking channels, but actually picking only individual shows- that "somewhere" is Apple or us.

 

[T-R-S]

The industry has it's head in the sand they tried to sue VCR's out of existence in the 1970's. Now they are trying to pretend the internet does not exist.
These highly paid CEO's are driving their companies out of existence.
They lack any vision of the future.
99 cents or Zero - YOU CHOOSE!
Greed is NOT good!

 

[Macpowered]

Apple should allow content providers to charge what they want, like the do in the App Store. The market will sort out the pricing.

QFT.

 

[Epicurus]

There is a lot of talk about television networks and advertisers and the current production and distribution channels. The point Apple seems to be trying to make with video (and I'll be speaking narrowly to the TV forms of video for the moment) is similar to what they offered to the world of audio a while back. This can be seen one of two ways, depending on your predilection for historical accuracy.

Apple's idea for audio was to offer convenience for a price as an alternative to convenience for free (Napster, etc). The music industry was already in a downturn well before Apple opened its store, and the push to digital music was already gaining speed. Remember that Apple didn't even write iTunes from scratch, they bought it. There were already several companies writing "iTunes"-like digital music software. Apple just hopped on board as fast as they could. They saw where the industry was headed, spotted a good spot for a consumer electronics device + software solution, and went for it. Apple didn't kill the audio industry, and the revenues from the iTunes sales are never going to be what they once were, but they are a far cry better than they would have been otherwise.

Now look at video. TV viewing is going down. Ad revenues are shrinking. Online video sources (torrents, etc) are competing with broadcast television. Apple sees where this is headed and they are trying to carve out a spot for a consumer electronics device + software solution. Apple is not killing the TV networks, but they are dying. Either somebody comes up with a middle-ground solution like the Apple TV + rentals, or the whole industry slides into anarchy and everything falls apart. Hulu and ad-supported "free" streaming on the network websites will not slow this decent for long. If anything, these sites (and Netflix to some extent) is encouraging the idea that TV content is "free". This is exactly the mindset that lead to Napster years ago, and Bit Torrent today.

Certainly as the networks and production companies get squeezed by shrinking revenues there will be budget shortfalls and cutbacks. We've already seen the first wave of this come and go with the reality TV phenomena. Advertisers will need to adapt as well, since TV ads will no longer be as lucrative for them as they once were. TV show productions will need to streamline, and technology will be there to help (some of it, ironically, from Apple). None of this is Apple's doing, so thinking that signing a deal with them will be the death of your network is just stupid.

The only analogy I can think of is this: Imagine the network executives are in a boat floating down the river. On the shore they spot Steve Jobs, who warns them about some dangerous rapids ahead and offers to sell them life vests for a small fee. The network guys get offended, saying "Why would we want to float in the water when we already have a nice boat." Little do they know that the choice is not between a life vest and a boat, but between a life vest and drowning.

 

[pika2000]

Only one IPTV with everything, no choice of IPTV provider. This is what you want...your comment is not as bright as you think it is

It's not like the content providers can't do apps on Google TV, etc. They have the freedom to do that. Besides, it's not like Apple will become like a "provider" in the classical sense. The content providers will become their own "network," with their own apps, Apple (iOS) will just become one of the platforms for the content delivery.

Your way of thinking is not as bright as you think.

 

[HobeSoundDarryl]

The only analogy I can think of is this: Imagine the network executives are in a boat floating down the river. On the shore they spot Steve Jobs, who warns them about some dangerous rapids ahead and offers to sell them life vests for a small fee. The network guys get offended, saying "Why would we want to float in the water when we already have a nice boat." Little do they know that the choice is not between a life vest and a boat, but between a life vest and drowning.

It's always nice to see pro-Apple analogies like this. I'm an Apple fan too, so I can even appreciate many of the reasonings behind why we want to see it like this. I too would love to get the content I watch commercial free and dirt cheap. But I recognize the ramifications of that should it come to pass. Among many incorrect assumptions, two of the bigger ones is that all our favorite- and other people's favorite- content would continue to get produced at current levels of quality in spite of a significant drop in the revenue flows, and all of our future favorite content would still get funded to have a chance for us to decide to rent it, etc. If we don't have lots of other players feeding that machine money on our behalf (often for the chance that we might see a commercial while they are showing it to us), Apple and us are the only players left as sources of the money (and potential replacements for all that revenue now).

As I mentioned above, if there was a lot of money in renting commercial free content for 99 cents per episode or less while cutting all the middleman players like the networks and cable/satt out of the equation, Apple could just take that big wad of cash it has and become it's own HBO-like entity, fund the pilots of shows and then exclusively rent those shows for 99 cents or less to us via iTunes. If it is as lucrative as we all perceive, that would apparently make Apple a huge amount of ROI on their spend. Why aren't they doing that? Think.

Here's my analogy. Take yours and step it forward a little bit in time. All those guys took the life vest from Steve and made Apple the sole middleman between content production and consumer consumption. Apple completely controls the video distribution of all shows from all production companies. Since Apple's first responsibility is to maximize profits for it's shareholders, it would make a lot of sense to start jacking up those prices for content that can only be purchased/rented from Apple. After all, if all media is given to Apple, where are we consumers going to go if Apple flexes that muscle?

That would put US in the next boat floating down the river. And Steve would be offering us the life vests at whatever price he wants to charge. The choice that we would have would be to pay up for whatever level of Apple premium Steve would like (to delight the shareholders- to which he has a legal obligation to maximize return on equity) or turn off the TV and do without.

Before you say, "Apple would never charge higher prices for something they control...", I would encourage you to objectively think it through.

I would love the same thing that some of us are dreaming about: cheaper access to commercial free versions of my favorite shows. But there isn't that much savings in stripping greedy executives of their private jets (note that Steve has a private jet too). If it pushes a middleman satt or cable company out of our house, Apple would just be the new middleman in this arrangement. If there are no commercials to help pay for the content, we have to pay for it in the rental fee. And as I showed in the math a little earlier, washing out the revenues made on just the commercials will cost more than $30/month from every household in America... before Apple takes its cut. Again, revenue from just commercials is not the only source of revenues that backs our favorite programming. In a world where the chain is content producers to Apple to us, it's only the latter 2 that can make up for the current revenue flows, if all the established structure was replaced by the dream. Borrowing a working content tactic from Netflix, Apple could do direct deals for the content now (and for the last 4 years) and then turn around and rent it to us for 1 cent if they wanted to... but they don't want to do that. Why?

 

[mrochester]

I agree with you, again! I think too many people are being too short sighted about this.

 

[Jasonxe9]

And these networks will just go over to Google et al instead, while giving Apple the finger....

Shoot / Foot.

A lot of content is already available on the Network's website so why would you want to pay >$0.99 in the first place?

So are you hinting that we might get a full TV show from google less then .99? I mean if thats true then all the execs just lied. I'm all for competition. Bring on Google Microsoft, Apple TV, whoever. In fact I think Tivo should get into TV show renting. Tivo already has a strong customer base and would fit in with what they are trying to do.

The problem is these network execs did not say we are looking at other options, they said .99 is too little for their content. For renting IMO I don't think thats too steep and would be willing to rent at that price.

 

[Mister Snitch]

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

Uh... HELLO? These execs who are complaining about Apple's pricing create NOTHING. Got that? NOTH-ING. Others create movies, these tools are just along for the ride. All they do is control the pipeline. And they're living in fear that Apple will do an end-run around them, just like cable did when the world was broadcast-only. They're afraid of losing more of their turf, plain and simple.

Years ago, when cable started making inroads into broadcast TV, network execs - just like these sad-sacks - sprang into action. Their semi-monopolistic control of the pipeline was threatened. So they funded a flood of fear-mongering ads declaring that cable would 'doom' broadcast TV. And of course, that's exactly what happened. Yup.

For that matter, movie producers once fought bitterly against a technology that they claimed would doom the movie business. That invention was television. As you know, TV thrived and, as you also know, no more movies were ever made. Yup. That's what happened all righty.

Years later, both the movie industry AND the TV business tried to block a new invention - the VCR. That, too, they swore would end the creation of new content. And sure enough, the VCR also ended the TV and movie industries. Yup.

And so it goes. What's amazing is not that these clowns keep reciting the same old crap. That is totally UNsurprising. No, what's amazing is that there are any goombahs left who are gullible enough to buy their hogwash. But, I guess there's one born every minute.

 

[mrochester]

Uh... HELLO? These execs who are complaining about Apple's pricing create NOTHING. Got that? NOTH-ING. Others create movies, these tools are just along for the ride. All they do is control the pipeline. And they're living in fear that Apple will do an end-run around them, just like cable did when the world was broadcast-only. They're afraid of losing more of their turf, plain and simple.

Years ago, when cable started making inroads into broadcast TV, network execs - just like these sad-sacks - sprang into action. Their semi-monopolistic control of the pipeline was threatened. So they funded a flood of fear-mongering ads declaring that cable would 'doom' broadcast TV. And of course, that's exactly what happened. Yup.

For that matter, movie producers once fought bitterly against a technology that they claimed would doom the movie business. That invention was television. As you know, TV thrived and, as you also know, no more movies were ever made. Yup. That's what happened all righty.

Years later, both the movie industry AND the TV business tried to block a new invention - the VCR. That, too, they swore would end the creation of new content. And sure enough, the VCR also ended the TV and movie industries. Yup.

And so it goes. What's amazing is not that these clowns keep reciting the same old crap. That is totally UNsurprising. No, what's amazing is that there are any goombahs left who are gullible enough to buy their hogwash. But, I guess there's one born every minute.

Isn't it the networks who take calculated risks as to whether to back a show or not, some of which turn out to be successful, some not?

If you eliminate that layer, where does the money come from to fund these TV shows?

 

[HobeSoundDarryl]

There are always these people who can only see things however it appears that Apple wants them to go. In many cases if you look back through history, they'll passionately argue against video in iPods when Apple asked "who wants that?", then praise it when Apple rolls it out. They'll argue passionately against a front facing "facetime" camera in an iPad when they launched without that feature, and now argue passionately for it since they know it's coming.

I suspect Apple could call their significant other ugly or tell them that the sky is green, and they would quickly dump their significant other, under a green sky.

This whole thing is not about how stupid the middleman executives are vs. how smart Apple is. Both parties know how to make lots of money. Both parties have private jets and lifestyles that reflect tremendous flows of revenues & profits for what they produce. Replacing one middleman with another doesn't necessarily result in a better experience.

But I can tell you this: right now, a lot of other companies spend money on our behalf, which funds the machinery in place now. Sure, some of that money buys private jets (but some of your Apple money paid for Steve's private jet too), etc, but a lot of that money becomes the fuel to deliver the quality of programming- good & bad- that we can find on all those channels- good & bad- now. Some of it becomes the seed money that green lights pilot episodes that yields new shows- good & bad- that might be our favorite shows a year or two from now. Some of it becomes the payroll to pay for all those people listed in the credits at the end of all the shows on television (watch those shoot by some time- there's a lot of names in those lists, and almost none of them are nonprofit volunteers/interns). How does all that get paid for in the new model? How do we rent a pilot not yet made, so they have the money to make the pilot? How do we motivate the content production creatives to gamble on a slate of new shows every year, when the show would have to be made BEFORE we could pay them 99 cents or less to rent it?

One more time: Netflix learned that the easiest way to get lots of content was to pay up for it. By spending bigger bucks than competitors, the studios and production companies were happy to do deals with Netflix. It's very simple: if they get the money they want, they're happy to sell or rent their output... just like Apple... and just like whatever company you work for.

Apple has a ton of cash on hand. They could easily pay up for the content. With their Pixar/Disney experience, they could easily become their own HBO-like entity, fund the development of their own shows entirely separately from the "greedy establishment", then make them exclusive offerings via this iTunes commercial-free rental arrangement. 99 cents too high? No problem. In this approach, Apple could rent them for 1 cent per episode since they would completely own the content they paid for.

So geniuses, why don't they do that? They have the cash. Plenty of it. They have the expertise. Plenty of that too. They have iTunes in search of great content to rent commercial free for cheap. They have many of us so sure that this new way where only the content producers, Apple (as middleman) and us consumers are in the chain is THE WAY to go. And we experts are so certain that so much of the money in our cable/satt bills, etc is just waste to fund the lifestyles of the greedy executives, Apple could either eliminate that waste or pocket it themselves. So why aren't they doing that? Think.

 

[JAT]

I would love the same thing that some of us are dreaming about: cheaper access to commercial free versions of my favorite shows. But there isn't that much savings in stripping greedy executives of their private jets (note that Steve has a private jet too). If it pushes a middleman satt or cable company out of our house, Apple would just be the new middleman in this arrangement.

The interesting thing in this discussion is that we are talking mostly about broadcast TV networks. Which are available for "free" on the old system that's been here for decades, via antenna to most people. Most of the best antennas cost well under $50. And DVRs are available for those that care about timing or missing commercials. Pretty cheaply, I might add.

But so many people are against the idea of an antenna on their house, although a sat dish is apparently ok. For a lot of people, they aren't really paying Comcast or DirecTV for content or to avoid commercials or whatever, they are paying to not put up a $35 antenna. Comical.

 

[HobeSoundDarryl]

The interesting thing in this discussion is that we are talking mostly about broadcast TV networks. Which are available for "free" on the old system that's been here for decades, via antenna to most people. Most of the best antennas cost well under $50. And DVRs are available for those that care about timing or missing commercials. Pretty cheaply, I might add.

But so many people are against the idea of an antenna on their house, although a sat dish is apparently ok. For a lot of people, they aren't really paying Comcast or DirecTV for content or to avoid commercials or whatever, they are paying to not put up a $35 antenna. Comical.

That's right. And note that even the broadcast TV networks are not really "free", just that those of us willing to put up antenna don't have to pay for them in something like a rental fee or subscription. Like always, someone else- advertisers & sponsors- are paying for us to have the ability to watch our favorite shows. The dreamers wanting commercial-free, < 99 cent rentals can't seem to figure out that all these players that pay the content producers for us are cut out, then it's only Apple or us that will be left to make up for those revenues (that pay for production of the shows). It should be clear that Apple doesn't want to spend it's huge cash reserves to do like Netflix and pay up for lots of content deals. So who's left in that new world, to make up for all that revenue that pays for all those shows?

Earlier, in this thread, I illustrated how just the commercials alone- if removed- would cost every single household in America more than $30/month to flow the same cash in some kind of iTunes-equivalent "all you can eat" commercial free arrangement. That doesn't include Apple taking a cut, and it assumes EVERY single household. We know that Apple will want a cut, and we know that every household in America doesn't have a TV. So, the cost-per-household would be higher- a lot higher- than that.

And that just washes out revenues from commercials. There's a lot of other revenues that also grease the wheels of the machine "as is". They too would be threatened, weakened, or eliminated in the dreamed iTunes model. There's only 2 outcomes if it comes to pass that Apple would own all media distribution- as some here seem to envision- we consumers would either pay a lot more for our programming, or the quality and breadth of programming would dramatically plunge commensurate with how much less the artists and production companies would be paid in this new arrangement. Does anyone really want either of those scenarios?

 

[lilo777]

The industry has it's head in the sand they tried to sue VCR's out of existence in the 1970's. Now they are trying to pretend the internet does not exist.
These highly paid CEO's are driving their companies out of existence.
They lack any vision of the future.
99 cents or Zero - YOU CHOOSE!
Greed is NOT good!

BTW, what is your opinion about Mac clones?

 

[akw]

No, the way to get networks to join up is to get AppleTV off Apple devices.

The reason the networks are all turning this down is because AppleTV is a niche product with a closed platform and limited audience reach.

That is something Jobs will never do and that's why AppleTV will stay the same niche product it always has been.

Seems just the opposite to me: NBC doesn't want their content on Apple TV because they're hoping it stays a niche product.

I haven't seen any other evidence that NBC is withholding content from platforms with limited distribution. Have you?

 

[Shivetya]

15:1 they don't like Apple's cut of the cost.

 

[lilo777]

15:1 they don't like Apple's cut of the cost.

Nope. They just do not like Apple. Period.

 

[tdmac]

I don't get the whole industry exec argument when they all collaborate on a free site Hulu. Or run their own sites where I can watch for free. So its not worth renting the movie for $.99 but we will give it away for free. Even if you factor in Hulu Plus, so you can get older episodes or a full season, you can pay $10.00 per month and watch multiple shows on multiple networks. Vs. the $.99 per episode and I max out on just 10 shows for the same price.

There is only one real difference here and that is the advertising $$$. This has nothing to do with deals on cable company networks etc. Its all about cannibalizing the advertising revenue period.

The know that the price to buy an episode is outrageous if you wanted to watch an entire season that way. Its fine if you miss an episode or two of something. DVD sales, when the season is long over, is total gravy to a network. However, the model of TV stations is built on the old advertising model. Without the ability to have corporations and businesses pay for those programs the whole thing crumbles. Unless you try and come up with a new model. But why change a dinosaur.

Now if Apple offered a subscription service based on shows that still included advertising, like Hulu, streamed in HDTV etc. Then I think we will see more exec's signing on. This could be the direction they were planning to go anyway. Plus the TV stations would have more clout with the cable companies.

Of course NBC probably would never agree since they are owned by Comcast anyway. A model like the one I suggested would risk their subscriber base. I can't believe the FTC & FCC allowed this to happen in the first place.