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“Unveiling a new Apple TV product Wednesday, Steve Jobs said he had hopes for ‘other studios to see the light.’ But sources at other content companies believe Disney and Fox are moving like moths to a flame,” Wallenstein reports.
“At issue is the 99-cent price tag that represents a steep discount from the TV episodes already offered on iTunes. Multiple executives described it as an unacceptable devaluation of the content that puts in jeopardy the so-called ‘downstream’ windows crucial to generating profit including DVD and syndication,” Wallenstein reports. “One studio chief drew a comparison between the new arrangement and the damage done to the music industry when Apple disaggregated the traditional album-oriented business model in favor of a singles-centric approach.”
MacDailyNews Take: Apple gave choice back to consumers. In general, an “album” is a forced bundle masquerading as “art.” The smallest salable unit of music is the song. Consumer should have the ability to purchase music in such a way. Albums continue to exist for consumers who want them. Most don’t. The smallest salable unit in TV is the episode. Plus, as opposed to songs, TV shows almost always are watched only once. 99-cents seems to be the high-end for what an average consumer would consider acceptable. Even that price makes it dicey as to whether the average consumer would make it a habit. It’s still more of a catch up price (your DVR missed it, you weren’t home that night, etc.) What does the above studio chief want, exactly? TV shows sold only by the season? Some of these luddites cling to old models (DVD boxed seasons in Wal-Mart) as desperately as the most myopic music labels. Successful businesses adapt to change, not try to ignore it or stifle it. Let’s put it this way: It’s no surprise that Jeff “Spell it with a capital F” Zucker is currently on the wrong side. Note to other execs: If your standing next to Jeffie, it won’t bode well for your business in the long run.
Wallenstein continues, “While few were surprised that Disney again joined forces with Apple, the emergence of News Corp. as a willing partner this week raised eyebrows. The deal reportedly was made at the behest of Rupert Murdoch, who overruled the objections of News Corp. executives because he is trying to advance his company’s interests in the digital news business. Noting the lockstep in which Disney CEO Bob Iger has moved with Jobs, the company’s largest shareholder, one exec cracked, ‘If Steve Jobs jumped off a cliff, Iger would hold his ankles on the way down.'”
MacDailyNews Take: We don’t see Steve doing much cliff diving. About all he seems to do is make tons of money for Apple and their partners. Steve Jobs is all about moving into the future. On a road paved with gold, no less. Iger is smart to follow. Those who don’t will be left in the dust.
Wallenstein continues, “Cable and satellite operators could be particularly steamed as TV networks are perennially embroiled in tough negotiations with them over retransmission fees for the same content they are making available to the competition. ABC is now engaged in such a standoff with Time Warner Cable, which likely will count Apple TV as a threat to its upcoming TV Everywhere initiative. “
MacDailyNews Note: ABC and TimeWarner announced the end of their standoff and a new multi-year agreement this morning.
Wallenstein continues, “Although Apple is touting the inclusion of Disney and News Corp., the holdouts are hoping their absence from iTunes rentals will weaken it. Already they’re taking pride in having successfully prevented some of Apple’s previous efforts, including a 99-cent download (as opposed to rental streaming) and a bundled monthly offering.”
MacDailyNews Take: Viacom, CBS, NBCU, Warner Bros., etc. are “proud” of not offering potential customers the choice that ABC, ABC Family, Fox, Disney Channel and BBC America offer. Remember that.
Wallenstein continues, “Disney strategy in particular was described by one rival exec as ‘schizophrenic,’ considering its series pop up on ABC.com, Hulu, Hulu’s iPad offering and now Apple TV.”
MacDailyNews Take: That’s simply moronic. Disney’s strategy is the proper one: Make your content available in as many places as you can at reasonable prices. That’s not “schizophrenic,” it’s just smart business.
Full article here.
MacDailyNews Take: These fat cat holdouts seem to have completely forgotten the value of a dollar. There are only so many entertainment dollars to go around for the average consumer. How many subscriptions and plans and crap are people supposed to be able to afford? The ISP, SiriusXM, TiVo, Cable TV, Hulu Plus, $15 3D movie tickets, and on and on and on. The holdouts just don’t get it. Make your content easily available at a reasonable price, don’t throw up artificial roadblocks and make it difficult/expensive. BitTorrenting TV shows is not that hard and it’s free.