i'm on Time Warner Cable in NYC. After taxes and all i pay around $130 a month for cable, internet and phone service and a DVR from them. pretty good deal. don't really see the point in iTunes for TV shows. it used to be $87 for just the TV and DVR but in December i signed up for the bundle special. Vonage was sorry to see me go after 6 years
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TV Networks Continuing to Resist Apple's Effort to Slash iTunes Pricing
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i'm on Time Warner Cable in NYC. After taxes and all i pay around $130 a month for cable, internet and phone service and a DVR from them. pretty good deal. don't really see the point in iTunes for TV shows. it used to be $87 for just the TV and DVR but in December i signed up for the bundle special. Vonage was sorry to see me go after 6 years
Networks get ZERO dollars per viewer. Networks PAY individual affliiate stations to air the programming. So really the networks PAY to have viewers. All revenue comes from the advertisers. Once a show goes into syndication, most stations can air a syndicated show for free(no cash exchange either way), but the must also air comercials "Built-In". For old programming that not many stations/advertisers are interested in, a station can pay cash and get the show with no comercials. So no, the shows are not more profitable.
So let me ask this. If NBC doesn't charge a TV station for airing a show (provided that the TV station also airs commercails that are sent with the show) then why should I as a viewer pay .99 cents to get it directly from NBC?(assuming also that NBC inserts the same commercails) It doesn't make any sense.
FWIW, I have worked in TV for 15 years and have had an opportunity to read some syndication contracts and talk to some syndicators. The syndicators are holding onto the shows and releasing them to the Internet slow and expensivly because they are scared. All of thier money comes from ad dollars and they don't want to lose that revune. If people stop watching OTA tv and swtich to the internet their whole business model could fail. They want people to go to their website for content, not Apple so they can control the ad revuene. But as of yet, an ad on the Internet is much much cheaper than an ad on TV, so it make more sense for them to collect money for the TV ad and not make it available on the Internet.
I really want this content to be free to watch. The government guarnatees all of us free TV, and OTA is going to die-leaving only pay options. Hulu and Fancast are poised to make money providing free TV, but most likely won't step up. I fear that once Comcast gets control that content will be moved to Comcast on Demand and I will be stuck paying for it.
I accept the value of a DVD because not only to I get to watch the show on the disc, I can watch that disc any time I want, on any compatible device I want. Further, I can rip that disc and take the show with me wherever I go.
I am willing to pay a premium for physical media, because although it costs more to produce, I as the consumer see additional benefit vs. a download.
Buying from iTunes restricts me in what devices I can watch my TV shows on, and therefore I see less value in that. So, if I'm going to buy anything from iTunes, it has better be ridiculously cheap in order to outweigh the benefit I've lost. If the price is even close to just outright buying the DVD set, iTunes loses in my house.
I've always heard that downloads would be cheaper, because there was no need to produce, ship, and store the physical media. So far, I haven't seen that come to pass.
I am willing to pay a premium for physical media, because although it costs more to produce, I as the consumer see additional benefit vs. a download.
Buying from iTunes restricts me in what devices I can watch my TV shows on, and therefore I see less value in that. So, if I'm going to buy anything from iTunes, it has better be ridiculously cheap in order to outweigh the benefit I've lost. If the price is even close to just outright buying the DVD set, iTunes loses in my house.
I've always heard that downloads would be cheaper, because there was no need to produce, ship, and store the physical media. So far, I haven't seen that come to pass.
I'm disappointed to see the television industry resisting the move to digital. I'm especially disappointed to see one of the cited reasons is "harming their much more lucrative deals with cable companies".
It stinks of anti-competitiveness to me, and renews my discomfort with Comcast's purchase of NBC.
I now get all my TV from iTunes and watch it on my Apple TV, so I always hope for cheaper prices and, more importantly, broader availability.
It stinks of anti-competitiveness to me, and renews my discomfort with Comcast's purchase of NBC.
I now get all my TV from iTunes and watch it on my Apple TV, so I always hope for cheaper prices and, more importantly, broader availability.
You are disappointed that content producers are resisting moving away from a business model that makes them money to a business model that is currently not sustainable by a long shot? Really? You also think that makes content producers guilty of anticompetitive practices? Seriously?
Lethal
HobeSoundDarryl
macrumors G5
Let's see if I can help. There was $48 Billion in US TV ad revenues collected last year (a down year). Let's assume about 180 million Americans (can) watch TV.
$48B/180M= ad revenue per viewer at about $267.
At $.70 per $1 episode purchased, replacing the ad revenue would involve the average viewer needing to buy about 381 programs in a year. Would you buy 381 TV shows each year at a $1 each? And if you have a family, just multiply 381 by the number of other viewers in your household.
If the rumored subscription model rolled out, the perception of it seems to lean toward a possible cable/satt replacement model, meaning we could dump cable/satt and get our shows via this new, direct option with Apple acting as sole middle man. If we assume the studios make nothing but ad revenue (something I know is not true), then a subscription model of only a little more than $22/month would replace the ad revenue per subscriber. It's interesting that Apple's rumored subscription product is rumored at around $30/month, as those 2 numbers seem to fit pretty nicely with the 30% cut that Apple likes.
However, here's just some key flaws:
- no great way to cover local programming within this package (best option is put up an antenna for local channels, but that doesn't work- or is not desirable- for everyone)
- no great way to cover live events like sports, etc (one can argue that it could all be streamed, but what do you think would happen to the Internet if we all tuned in for March Madness or the Superbowl at the same time on our broadband devices?)
- these companies make money beyond just the advertising revenue; for example, it's well known that ESPN usually commands 2-4+ dollars per subscriber; as soon as you let this math into the mix, all of the above gets very messy as a potential "win" (cable killing) arrangement)
- that $22/month is based on just one viewer. If there are more than 1 viewers in your household, multiply that $22/month by number of viewers to get the replacement subscription level for your home
So, as should be obvious, from the business end of things, the ideal appears to:
- keep their ad revenue AND get paid a subscription, OR
- price their ad-free content at a premium so that the ad-included option is always a better deal (which is what we have now)
Lastly, factor in who "owns" the broadband pipes through which this cable/satt killer option is delivered, and you can imagine what THEY would do if their very lucrative cable/satt cash cow started feeling the (lost revenue) pain of group shift to these kinds of options flowing through the very same pipe, and you can guess what would happen to your broadband bill. Why do you think there are virtually no competitors for broadband in pretty much any area of the country?
I hope the networks (and the newspapers) have not poisoned their market by putting something out there for free that they now know they cannot sustain on an ad-supported model.
There is so much psychology packed into what people consider to be "paid" vs. "free." It seems weird that people who don't blink at paying $150 a month for cable and internet are virulently opposed to the idea of paying $.99 for a TV episode or $10 a month for online access to their hometown newspaper, but that's driven by the perception that paying for something tomorrow that you get for free today is an unconscionable waste of money.
The record labels were worried about that five years ago, but iTunes made it easy to download a song for $.99 and people got over it.
It may actually be easier for Apple to sell a Comcast-killer model than getting any traction with $.99 TV episode downloads because the consumer can compare one service (cable) directly to an analogous service (iTunes subscription) on price. Nothing is $.99 extra.
Why would Apple allow you to record TV shows when it wants you to buy TV shows from iTunes?
EDIT:
The record labels are still worried because CD sales revenue is dropping faster than online revenue is growing, but there's nothing they can really do about it other than wait. By the same token DVD sales, which have been h-u-g-e for the movie industry have already peaked and are declining but Blu-ray and online sales aren't growing enough yet to make up the difference.
Lethal
You think paying for anything is laughable. Fortunately most of the rest of us don't think that way and are willing to pay for stuff, so businesses can actually create things for us to use. (Like those books you get for free at the library, for instance.)
Ultimately those of us who pay for things shoulder the load for you cheapskates who don't.
You're welcome.
For me it's all about the perceived value compared to what other options are available. I like the idea of iTunes music downloads, but I resisted the idea of $9.99 album downloads because I know I can buy CDs for $12-13 in retail stores, plus retail stores sometimes have sales, coupons, and used versions for sale. However, I have found myself buying more digital albums recently for the sake of convenience.
As someone has mentioned, one can usually see DVD box sets of TV shows around the $20 mark. Over the past year I purchased the entire Stargate franchise (SG-1 and Atlantis) for $20/season or less. These include the shows, with subtitles where available, and extra content like commentaries and deleted scenes. The digital iTunes downloads would not include these. Where is my incentive to buy from iTunes? If I can buy the physical DVDs for $20, then the iTunes version would have to be $15-20 before I would consider it. At the very least I would expect price parity with the physical media, and let the convenience of digital downloads battle it out against the bonus of extra included features.
I like the idea of a roughly $30 subscription service. This is very comparable to cable/satellite TV and would be very convenient. I also don't mind paying $2 per episode for TV shows that I watch. $0.99 or $1.49 would be even better, of course, but I'm OK with the pricing as it stands. The premium for HD bothers me a bit, so I always buy SD. Perhaps an evolutionary change would be to phase out SD and provide the HD versions for current SD pricing.
Is this a question of the digital downloads being too expensive, or DVD prices being undervalued? Either way the market has set certain price expectations and there will always be a resistance to bringing those price points any higher.
I was thinking about starting to watch Lost, and was thinking maybe I'd download all the episodes from iTunes. Then I get on the store and see that it's like $35 per season ($50 for HD and I don't get why HD should cost 43% more). So if I want to get caught up with Lost in this way it's going to cost me $175 to $250, for one show. I just don't see how that can seem reasonable to anyone who is not a millionaire. I'm don't think I'm cheap, I have money, but that's just crazy expensive for one tv show. I simply will never pay that much to watch a tv show and I think I'm in the vast majority here. Of course, I don't buy DVD box sets for those prices either. Networks need to wake up to reality or forget about it altogether. If they can get people to pay those prices, best of luck to them, but I will never be one of them.
And $1.00 an episode is still pretty expensive, frankly, when you consider how many tv episodes the average person watches in a year. At that price, I'd consider it, but my purchasing would probably be limited. Charge 50¢ an episode and I'll start consuming downloadable content like crazy.
Furthermore, how about a discount for buying a whole season. Right now you generally pay the same rate as buying all the individual episodes, but if you discounted a season 25% or more, that would probably help spur sales.
And $1.00 an episode is still pretty expensive, frankly, when you consider how many tv episodes the average person watches in a year. At that price, I'd consider it, but my purchasing would probably be limited. Charge 50¢ an episode and I'll start consuming downloadable content like crazy.
Furthermore, how about a discount for buying a whole season. Right now you generally pay the same rate as buying all the individual episodes, but if you discounted a season 25% or more, that would probably help spur sales.
At $1.99 I rarely buy some TV shows but it does happen every now and then
At .99 cents, I will probably buy some more.
At .99 cents, I will probably buy some more.
with netflix and Hulu what exactly is the point of buying TV shows? before my son was born i rented every season of The Sopranos and every Star Trek episode from all the series over the course of a year or so.
the only TV shows i'm planning to buy are Dora the Explorer and other shows from Nick and Disney for my son.
the only TV shows i'm planning to buy are Dora the Explorer and other shows from Nick and Disney for my son.
Advertising Costs...
The range I saw online was $5-10/1,000 viewers for a 30-second spot. A 1-hour program has 32 spots, so they should recover $0.32/viewer. With iTunes, they would get $0.69/viewer after Apple's cut.
But, what everyone in the equation wants to do is dramatically increase the value per viewer that they can extract, so a mix of highly targeted ads and low cost pay-per-download is the easiest way to maximize profits.
I wouldn't pay anything for a one-hour show with more than 5 30-second spots, but if it isn't as obtrusive people don't go out of their way to block the ads.
The range I saw online was $5-10/1,000 viewers for a 30-second spot. A 1-hour program has 32 spots, so they should recover $0.32/viewer. With iTunes, they would get $0.69/viewer after Apple's cut.
But, what everyone in the equation wants to do is dramatically increase the value per viewer that they can extract, so a mix of highly targeted ads and low cost pay-per-download is the easiest way to maximize profits.
I wouldn't pay anything for a one-hour show with more than 5 30-second spots, but if it isn't as obtrusive people don't go out of their way to block the ads.
I don't need these at all. Given that I pay quite a bit for digital cable, I simply DVR all the shows I watch. Anything I want to keep, I bit torrent and save, since I can't get them off of my DVR.
Some would argue the ethics, but since I paid for the shows, I feel fine with it.
Some would argue the ethics, but since I paid for the shows, I feel fine with it.
Yeah, but you have a chicken-and-egg problem there. Isn't the fact that online sales are so tiny partially a function of the asinine pricing model they started with and refuse to adjust? If they're really interested in trying it, then do it for real, with new, popular shows that people are watching like Survivor, 24, Lost, House, etc. And drop the price of 20- to 40-year-old sitcoms to 50¢ each. And stop charging a ridiculous premium for HD.
This is exactly how I feel. Digital downloads are supposed to be cheaper than physical releases, and IMO significantly so, due to the vastly reduced production costs. I have not bought anything from the iTunes store ever, and will never do so unless they start charging what I feel to be reasonable prices (or at least in the case of music, offer lossless downloads). I won't buy a crappy lossy approximation of an album if I can get the lossless fully-unrestricted version from a store for essentially the same price. The few music tracks/albums I have bought online I have all gotten from alternative sources who offer FLAC/lossless downloads.
With TV shows, I would consider paying $1 per episode if it was full HD quality. Frankly though there is so little on TV I find even remotely worth watching that I probably wouldn't bother anyways.
I guess it ties in with how little I watch TV (I'd say under 5 hours per month) but I would never get into a subscription model either. The only reason I am getting cable TV now is that the cable company is bundling it in for free. If I dropped the cable from my service, they would raise my internet rates and I would be paying the exact same amount.
Ruahrc
While there are no physical disks to a download I think they should be somewhat cheaper but I also realize that these files sit on redundant servers and they also consume bandwidth. Also the current tv shows on iTunes have no commercials. There certainly is no free lunch and/or free downloads. The true consumer benefit of digital downloads are the plethora of options it gives a consumer and the convenience. Believe it or not, that is actually worth something.