Filed under: Analysis / Opinion, iTS, Apple
Does Apple want to sell TV shows for 99 cents?
The Apple/NBC drama continues with this latest report from Variety. Sources tell Variety that Apple proposed to the studios that TV show prices on iTunes should be lowered from $1.99 each to $.99, to which NBC said, 'No thanks!' NBC is pushing for 'flexible pricing' meaning that new shows would cost more than older shows which makes sense to me if the prices are reasonable (i.e. not $4.99 for new shows) and this scheme is actually already in place in the iTunes Store.What?! I thought Steve was all about one price or nothing, I hear you say. Yes, that would seem to be the case if one looks only at TV shows and music, which account for most of iTunes purchases but one shouldn't forget that Apple also sells movies . Newly released, or hot, movies cost $14.99 to download while older movies cost just $9.99. Oh, the confusion a buyer must feel when faced with these differing price points!
I predict that in the near future all the studios (including NBC) will agree to sell their shows via iTunes with new shows getting $1.99 an episode and with older shows going to $.99. That way the newer downloads won't compete with DVD sales, and the older stuff will suddenly become more appealing.
Thanks to everyone who sent this in.
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Reader Comments (Page 1 of 1)
adrian said 4:06PM on 9-07-2007
The time has come for Apple to get out of all this media selling stuff and concentrate on Macintosh, like they used to.
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Fritz Laurel said 4:19PM on 9-07-2007
Does anyone know how much a studio gets from each viewer now, as in over the airwaves or cable? It's advertisers who are paying, but what is the going rate for a show based on ratings? And what does it come out to per viewer? I'd be willing to bet it's well under $4.99.
Cheers,
FL
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Stephen Antonucci said 4:44PM on 9-07-2007
Maybe, but they sure want to control how you play them on a TV.
http://www.reelsmart.com/2007/09/07/bad-news-apple-locks-tv-out-on-new-ipods-breaking-video-add-ons/
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Irving Isler said 5:21PM on 9-07-2007
Apple does need to improve a few things:
1. Shows should be worth LESS than music. Most TVs will not be watched more than a single time. The fact that it costs more to create doesn't really matter; and if it's true that Apple is attempting to negotiate a lower price it can only be because people aren't buying enough of them. A 99c song will probably bring much more long term enjoyment, unless the show is part of a collection - but then you'd want higher quality.
2. Here we are at higher quality. HD show downloads (you know H264 can do it well) or at least stop cropping the crap out of shows that are aired or produced 16:9. When grey-market Bittorrent downloads are better than purchased content, we have a problem.
Over.
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Christina Warren said 5:55PM on 9-07-2007
#2 - it might be less than $4.99 a person, but the total number of viewers for something on network television vs even the most highly downloaded/watched iTunes or even YouTube clip isn't comparable. You can't really compare broadcast television revenue and iTunes episodic sales rates at all because they mean two entirely different things and account for income in entirely different ways. Plus, money and profits are divided in different ways from broadcast and actual sale - meaning that the network has to pay profits out of DVD sales or broadband sales that they don't have to pay, in most cases, when the show is aired on broadcast (or streamed for free online or via On-Demand).
Other than basic ratings, the ad rate depends on the show, the studio who makes the show, the network, the demographic (this is more important in many regards than the rating itself - the demo is key) and of course, the time slot.
It isn't uncommon for 30 seconds on a really hot show to go for $300,000 or more -- if you take that and apply it to a one hour, which usually averages about 17 minutes in commercials (so 43 minutes is the show, the other 17 is ads), that's $10.2 million in revenue just for that show. Now, that could be high or low depending on the show. I mean, ER used to be able to get $800,000 ad rates in its prime -- but that is also assuming all national ad rates - which doesn't happen, so it's hard to say.
The thing is, even $1.99 is a bit high for a new show, because people aren't buying TV the same way they buy music. TV episode downloads are just one more part of the growing trend in time-shifting television viewing. If I buy a box set of a TV show, it's because I want to watch that over and over again - I want to own that show. If I download an episode, in 95% of all cases, I just want to see what happened because one of my TiVo's didn't catch it or I forgot it was on -- and then I'll delete the episode and never watch it again. The quality and extra features of something like a TV series on iTunes is NOT a good deal - even for older shows. I just got The Practice on DVD from Amazon for $20 -- DVD quality, some extra features, whatever -- they want $25 for it on iTunes, without the extras and DRMed and in lower quality. Same thing with The Office - it's my favorite show, but I never bought an episode on iTunes because I knew I would buy the DVD - and I wasn't going to buy an episode twice. I suppose if I HAD to see something and BitTorrent didnt't have it, I'd buy from iTunes - but that's it -- iTunes is just another timeshift option - and to be honest, if I could stream it at high quality off the network's website - even if it meant watching an ad before the show started, I would do that every singe time over paying $1.99.
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Patrick said 4:06AM on 9-08-2007
When they lowered the price on the iPhone, some people said it was because the phones were not selling as well as expected and the lower price was expected to move more hardware. Cutting prices is a pretty standard way to boost sales.
So if they make the TV shows cheaper, does that mean they are also not selling as well as Apple would like? I know I've never looked at iTunes for my TV needs. It's virtually certain they don't carry the shows I like, and I already have satellite and Tivo, so why would I bother with buying TV from Apple?
The whole NBC issue is meaningless. I haven't watched anything on NBC properties since Trio shut down. It would not be possible to care less about what a network has to offer. Wouldn't notice if they went out of business entirely.
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James said 9:20AM on 9-08-2007
fuck NBC
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Mark said 10:28AM on 9-14-2007
It already happened. I just did a search for "History Channel" on iTunes and now all the shows have dropped to $0.95. This must be what pissed off NBC.
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Mark said 10:32AM on 9-14-2007
My bad. Those are all Audiobooks. Darn.
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