Report: HBO close to deal to sell programs on Apple’s iTunes Store – with flexible pricing

“Apple is close to announcing it has signed a deal to sell HBO programs and movies on the iTunes website, according to HBO employees involved in executing the agreement,” Josh Saul reports for Portfolio.com.

“The deal marks the first time that Apple has agreed to a separate price structure for a content provider, one of the employees said,” Saul reports.

“The HBO insiders said that the new service would be launched and announced simultaneously, most likely in a week or two,” Saul reports.

“The HBO-Apple agreement is a strategic coup for both companies. Apple is trying to increase sales and awareness of its new Apple TV, a device that allows viewers to rent movies and buy content from your television. HBO wants to profit from its archive by letting fans buy old episodes of shows like Deadwood and The Larry Sanders Show,” Saul reports.

“The terms of this new deal could open a Pandora’s box for iTunes. With the advent of pricing variation, movie studios, and musicians will want to charge more for their big hits. Apple could be pressured to accept variable pricing for other content, a change it has resisted in the past,” Saul reports.

“‘We should have done this a long time ago,’ said an HBO insider,” Saul reports.

Full article here.

[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]

If so, Steve Jobs should grant Apple-approved (simple and consistent) variable pricing options to everyone except NBC. They need to do at least a year of penance.

28 Comments

  1. Deadwood and The Larry Sanders Show? WTF?

    It’s all about The Sopranos, baby! I already have seasons 1-6A burned from my DVDs but if iTunes carries the extended half of season 6 for the right price they’ll get some more business out of me.

  2. HBO is smart to consider new distribution channels such as Apple TV via iTunes. Variable pricing structure will un-level the playing field though. Apple, please keep it simple (and elegant) what ever you decide to do.

  3. I don’t see a problem with variable pricing. Let’s face it, some creative content is better than others; some entertainers have earned the right to charge a premium. Let the market decide. If products are overpriced, they won’t sell. Prices will find the proper level if there is an open system. The key is for Apple and the content producers to find a simplified tier structure. Something like set pricing for Premium, Standard, and Bargain sections.

  4. Apple started with a flat pricing model, and that simplicity helped to build the iTunes base. But everyone is used to a variable retail pricing structure – the same product can cost different amounts in different stores, or even with just different packaging. So I am at a loss to understand the resistance to variable pricing in iTunes. It is merely another retail store. In fact, variable pricing has existed in iTunes for a while with DRM’ed and DRM-free music tracks, various albums, music videos, standard versus HD movies, etc.

    The current debate is over variable pricing within a particular area, and I see no reason why all music should be $0.99 per track. Does every track in the iTunes Store have the same value to you?

    Everyone seems concerned that variable pricing will inflate prices, and it may do that for popular material. But supply/demand elasticity also has the potential to reduce prices. If the price goes up under a variable pricing structure, then vote with your dollar and the price will eventually go back down. It is time to free up the constraints on the iTunes Store and let it function similarly to other retail venues.

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