“Apple is mulling a plan to cut the price of TV show downloads in half — an idea that’s not going over too well in Hollywood,” Josef Adalian reports for Variety.
“According to three people familiar with the proposal, Apple has told networks and studios that it would like to slash the cost of most TV episodes sold via iTunes from the current $1.99 to just 99¢ — the same as what Apple charges for most music singles,” Adalian reports.
“But entertainment companies don’t seem to be rushing to embrace the idea. Indeed, the half-price plan may have contributed to NBC’s decision last week not to renew its current deal with Apple (though if NBC had simply let its contract automatically renew, the current price of $1.99 would’ve stayed in place),” Adalian reports.
“Apple’s argument to studios and nets has been that they will end up making more money from digital downloads under the new proposal. Company believes the volume of sales for TV shows will rise dramatically, offsetting the impact of the price cut,” Adalian reports.
“Among the concerns is that at 99¢, iTunes downloads could impact sales of DVD boxed sets, an important revenue source for TV congloms. While many congloms believe digital distribution is the future for TV shows, retail sales of DVDs are of primary importance for now, along with protecting partnerships with giant DVD sellers such as Wal-Mart and Best Buy. Those retailers would likely scoff at selling DVD boxed sets at a price point significantly higher than what iTunes effectively charges,” Adalian reports.
Full article here.
Why Apple has to continually smash paradigms and drag obtuse people and organizations kicking and screaming into the future while generating profits for them is beyond us.
We imagine that NBC fled at the first mention of halving the price. The others probably just wet their pants. Can’t you just hear them? “Oh, no, oh, no, we can’t upset Wal-Mart! Let’s try to stave off the inevitable for as long as possible with higher prices, more DRM, protracted negotiations, opening and moving to also-ran online outfits that nobody uses, and/or general do-nothingness. Yeah, that’s the ticket!”
Hopefully, Jobs will be successful in persuading the networks and studios* to allow him to stuff their bank accounts full of profits.
*We do have faith in Job’s trump card, Disney/ABC – based completely on the fact that Jobs is the company’s largest individual shareholder.