Rupert Murdoch and News Corp. to Be Swing Vote for 99-Cent iTunes TV Show Rentals?

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The Los Angeles Times reports that Apple is still working to convince media companies to adopt its plan for 99-cent TV show rentals through its iTunes Store. According to those close to the negotiations, a number of media companies, including NBC, CBS, and Time Warner, are against the plan, but Disney is currently prepared to go along with it.

News Corp., the parent company of FOX, is still sitting on the fence, however, with its executives split on whether to sign on with Apple for the rental plan. Chairman and CEO Rupert Murdoch is said to be in favor of it, which may tip the balance in favor of Apple's plan for News Corp., and possibly even the entire industry should the early adopters see success with their offerings.
News Corp. executives are divided over selling TV shows at such a discount, according to people close to the conversations who requested anonymity because they were not authorized to discuss internal company matters.

Single episodes of such popular shows as "Glee" or "Lie to Me" are available to purchase for as much as $3.99 at Apple's iTunes store. Some executives of News Corp., which owns the Fox network, worry that offering 99-cent episode rentals will cut into lucrative DVD sales and pull viewers away from watching network TV, thereby eroding a $20-billion advertising market, these people said.

But other top officials at News Corp. - especially Murdoch - are prepared to join Apple's six-month pricing trial because it could cement a relationship with Apple's powerful chief executive, Steve Jobs, and reap benefits for other divisions within the company, namely newspapers.
According to the report, Apple's plan calls for a six-month trial in which content providers would be guaranteed to receive the same revenue for rentals that they have been receiving for sales of TV show episodes. Apple's iTunes Store would offer commercial-free versions of the episodes at the 99-cent rental price point within 24 hours of their original airing on television.

Those media companies currently holding out against Apple's plan cite a number of factors, including fears of sabotaging their own lucrative DVD sales and losing customers for traditional cable companies that pay significant fees for the right to carry their content, in their reluctance to sign on. The companies are also worried about an overall devaluation of their content due to dropping prices, causing a ripple effect for revenue streams such as syndication.

Article Link: Rupert Murdoch and News Corp. to Be Swing Vote for 99-Cent iTunes TV Show Rentals?
 

Mjmar

macrumors 65816
May 20, 2008
1,179
419
I'll never use iTunes for TV as long as I have hulu plus. A dollar to rent a tv show is ridiculous.
 

talkingfuture

macrumors 65816
Dec 4, 2008
1,216
0
The back of beyond.
There is a complication to this once you move outside of America. In the UK Murdoch owns Sky, a satellite broadcaster. Outside of sport and news they produce very little content themselves and channels like Sky1 mainly show the content of FOX and a lot of channels he doesn't own like NBC and Discovery etc. I can't see him wanting iTunes to offer too much competition for Sky in the UK. Especially as a lot of people like myself would gladly drop sky if apple made a cost effective way of watching Mythbusters, 30 Rock etc.
 

Cynicalone

macrumors 68040
Jul 9, 2008
3,212
0
Okie land
I hate this idea.

But if this is just to add rentals and leave the option to purchase it won't change much.

Again where does this fit in the price range?

  • .99 Rental
  • 1.99 SD Purchase
  • 2.99 HD Purchase
 

ngenerator

macrumors 68000
May 12, 2009
1,835
0
USG Ishimura
I'd pay a dollar an episode to rent Dexter and It's Always Sunny in Philadelphia, but not the Office or any of those types of shows. Do they not realize that the consumer will not own the title for $1, they're just renting it for 24 hours worth of viewing? How can they possibly be as split as they are? They'll still get home video revenue when the seasons inevitably come to dvd in 7 months...
 

dmm219

macrumors 6502
Aug 25, 2008
416
0
I'll never use iTunes for TV as long as I have hulu plus. A dollar to rent a tv show is ridiculous.
Short sighted. If you watch 10 plus tv shows a month...then maybe. If you watch less (which many people do, especially in rerun season), its a far better deal than hulu plus, without ads.

Hulu + remains the biggest ripoff in the industry at this point...
 

huntercr

macrumors 65816
Jun 6, 2006
1,039
0
No Ads for paid TV show?
Will they provide the free TV show with Ad?
I think they will.. it's only natural. Apple will want to spin this into a relationship with iAd.

I'll bet, under the covers, this is the real reason the studios are objecting... they want control over the advertisers, and Apple is saying 'no way'.

Still... I can't see myself spending more money on TV subsciptions than I already do on cable... if it really takes off, and half hour shows are prorated to $.49, then I'll possibly do it.

If it's HD content, I might also reconsider, but I think we know it's going to be SD.
 

utahraptor

macrumors member
May 16, 2003
31
0
I don't consider 99 cents a discount to something that is normally free. They should not look at this as a chance for tranditional revinue to be erroded, but a chance to try and hold onto tranditional viewers who are jumping ship.
 

newagemac

macrumors 68020
Mar 31, 2010
2,091
23
Short sighted. If you watch 10 plus tv shows a month...then maybe. If you watch less (which many people do, especially in rerun season), its a far better deal than hulu plus, without ads.

Hulu + remains the biggest ripoff in the industry at this point...
No, cable/satellite tv is the biggest ripoff in the industry. Hulu Plus is a far better value in comparison although I prefer a combination of Netflix and free OTA.

It's amazing that people still spend $70 to $100 (or more) every month on cable (about $1000 a year) loaded down with a sickening amount of ads when there are so many other entertainment options out there nowadays that present a better value. Habit I guess... and an expensive one at that.
 

johnnymg

macrumors 65816
Nov 16, 2008
1,316
6
$0.99 is still WAY too low of a fee for me to watch Glee or these other cr@pp shows.

I do have to give some credit to Apple for pushing the dying TV industry to inovate.

JohnG
 

cwoloszynski

macrumors member
Jul 21, 2005
57
6
How much revenue, per person, is generated by viewers to the content providers? Is my watching 30 minutes of TV with 6-8 commercials really generating $1 in ad revenue to the providers?

I figured there are 300 Million people in the US and the $20B in the advertising market. If 20% of the people watch 10 hours a week of TV over 50 weeks, that is 30B viewer hours. Seems to me that 30 minutes of TV must generate less than $0.33, not $1.

Perhaps Apple is only sharing $0.33 per show to the content providers and using the rest for transport costs.

Hard to imagine that 40 hours of TV per month could be worth $12 in ad revenue.
 

GorillaPaws

macrumors 6502a
Oct 26, 2003
930
6
Richmond, VA
Here's what I don't get: if a show brings in less than $0.99 per episode in advertising revenue, wouldn't renting it for $0.99 be an overall INCREASE in revenue for the studios?

That would be like Toyota complaining that their Lexus division is really cutting into the sales of their Camry division... the logic baffles me.
 

silentbob007

macrumors regular
Jul 31, 2010
179
29
Little Rock, AR
If I'm paying for cable+DVR, I don't see myself ever "renting" a TV show unless it was from a "premium" network (HBO, etc). I don't see myself dropping cable unless live, HD streams of local sports are available. I don't think my situation is unique.
 

griz

macrumors 6502a
Dec 18, 2003
581
220
New London, NH
Give us a season for $4.99 for 30 min shows and $9.99 for hour long shows.
That I would agree with. It needs to be competitive with basic cable. Right now I get the networks for $18/mo. So If I watch 2 different shows for a season, the model above is still more expensive. But the flexibility might be worth it, especially if they offer a lot of non network shows. Besides, my monthly internet bill would go up by $10 if I drop the TV part.
When will the cable TV companies realize, they are bit vendors.
 

Žalgiris

macrumors 6502a
Aug 3, 2010
934
0
Lithuania
It's amazing that people still spend $70 to $100 (or more) every month on cable (about $1000 a year) loaded down with a sickening amount of ads when there are so many other entertainment options out there nowadays that present a better value. Habit I guess... and an expensive one at that.
Mad people do that. Also do not forget to add absurd price for good internet (talking about US).
 

UnseenLlama

macrumors 6502a
Jul 27, 2007
559
14
Indianapolis, IN
Once you rent and watch a show, it will disappear, so how does this erode dvd sales? When you pay for cable every month, you are basically "renting" the entire channel line up for that month. People still go out and buy dvds of particular series. :confused:
 
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