Apple Looking to Cut TV Show Prices
Apple has begun an effort to convince networks and studios providing it video content to allow it to cut prices in half, meaning most television shows sold through iTunes would retail for 99 cents.
According to news reports, the idea has gotten a cool reception from Hollywood, which in many cases is looking to make more money from video downloads. However, Apple believes that a price cut could lead to a boon in sales, and would soften the blow of any revenue loss.
It could be due to this new effort that NBC Universal walked away from the table. That company was one of those looking to make more money from digital video by bundling programs together, although Apple claims it was also trying to raise the price of individual shows.
There are reasons for the network's unease. For example, DVD sales of television shows have become an important part of overall revenue. Variety offered one example where NBC's Heroes DVD currently retails for $40 in stores.
Including 23 episodes, on iTunes it would currently cost $45.77 to purchase all of them. After the change, that cost would be $22.77, much cheaper than the DVD. Customers could opt for the cheaper download method, cannibalizing sales of the show on DVD.
This is the same argument that has prevented Apple from attracting new studios to its movie store - offering a cheaper version of a new release the same day as it is available on disc is too much of a risk for some. However, at the same time, not everybody is completely against the idea.
Some studios have suggested a tiered pricing system, where older catalog episodes could be reduced to 99 cents for quick sale. However, Apple has always been against any type of tiered pricing, so such an arrangement could be hard to negotiate.
Apple declined to comment on the reports, although industry insiders claim that it may be closest to a deal with ABC, the first to offer its TV shows on iTunes. Jobs is on the board of Disney, which owns the network.