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Thursday, February 18, 2010, 06:20 pm
CBS plans to reduce prices to $1 on some iTunes TV episodes
Apple's push for 99 cent TV shows to coincide with the launch of the iPad has garnered support from at least one content provider, with the network CBS reportedly interested in reducing prices for some shows.According to MediaMemo, CBS CEO Les Moonves said Thursday that his network would reduce prices on some of its shows to 99 cents, down from the standard price of $1.99. The news follows a report from last week that indicated Apple was looking to test a $1-per-TV-episode program when the iPad launches in late March.
He said that "certain shows" would be priced at 99 cents, but didn't give any specifics. He added that the details have not yet been worked out.
That report said some networks had already agreed to lower prices, but didn't name any specifically. Moonves' comments mark the first major U.S. network to confirm participation with the new pricing structure.
"It’s possible that Moonves doesn’t plan to make any significant concessions on pricing — CBS, like other networks, already offers some older shows, or new shows it wants to promote, at discount prices," the report said. "But the context of Moonves’ comments, which came during the company’s earnings call today, indicated that he was planning on changing his pricing structure on more than a one-off basis."
In addition to CBS, another likely candidate would be ABC, which is owned by the Walt Disney Corp., of which Apple co-founder Steve Jobs is the largest shareholder. Last week the CEO of Disney praised the iPad and its potential for multimedia content, including interactive TV shows. Bob Iger singled out the popular ABC show "Lost" and said a forthcoming iPad edition would provide an interactive version of the program.
Earlier reports suggested Apple was looking to push a subscription TV plan to coincide with the iPad launch. Both Disney and CBS showed early interest, but talks reportedly stalled in January when executives from major networks did not show interest in either subscriptions or 99 cent episodes.
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Previous Comments View All
It's about time these entertainment companies got a clue! They can't charge the same prices for TV shows and movies as they would for physical DVDs. Digital downloads are a lesser product with far less in terms of features and production costs. There is no packaging, special features, physical disc or ease of use/transport across platforms (TVs, computers, laptops, etc). They should cost less than buying a season DVD or movie.
Not that I am saying digital downloads are bad. Just that they should cost way less!
Yay, the 99-cent model lives on! This pricing was instrumental in the early success of iTunes. With both CBS and ABC on board it will be difficult for NBC and Fox to hold out. If successful in the first few months after iPad is released, I expect most if not all media corps will jump in. If there's one thing you can depend on corporations to do it's to cave in on their principled stands when there's money to be made.
Right now, I use bit torrent as my PVR. I do pay for cable TV, but I rarely watch TV during prime time, so a PVR (or VCR) is the only way I'd see those shows. The thing is, downloading the shows is so much more convenient, and it's a better viewing experience without the commercials.
At $2.99 per episode (which is what most iTunes shows that I want to watch are priced at), I'm not going to rack up much of a collection, again I'll stick to torrents. But at 99¢ per episode? I'm in. I'll buy lots of them. LOTS.
The biggest trick the studios are missing is charging a very low fee (say 20 cents) to "rent" a show, i.e., so you can only watch it once.
At the moment, you are buying the show and get to keep the file forever and watch it as many times as you like. Many people are only interested in watching something once, and maybe if it's an amazing show you'll want to buy the boxset later. The 20 cent price of a rental could even count as a discount towards a permanent-own version if you want to buy that later.
The biggest trick the studios are missing is charging a very low fee (say 20 cents) to "rent" a show, i.e., so you can only watch it once.
Does Apple take a set fee for a video length at a particular quality? For instance, wouldn't Apple take for hosting and distributing a TV Show be over 20¢ for the $2 charge? Economic of Scale can work to Apple's and the studio's benefit, but if it gets too popular the servers and network could get overwhelmed making the server costly for Apple.
I have to wonder if perhaps 1/4 (49¢) or 1/3 (69¢) pricing model might be more realistic.
How about a charged rental model with embedded ads might be required in order to go so low. The rebuttal for that argument is that Hulu has ads but it's free, but Hulu also doesn't necessarily have new shows the next day, has limited cable shows, has no paid cable channel shows, has a low bit rate to their low resolution video and isn't transferable to iDevices, at least not yet).
It's been 20 years since any US broadcast network had a show that was worth $1.
99¢ isn't bad to own, but I would like to see a even lower rent price.
Right now I can watch tons of shows all day, all month long, for only $8-9 a month via Netflix.
To beat Netflix, each TV rental will have to be less than 3¢ each and commercial free.
Economic of Scale can work to Apple's and the studio's benefit, but if it gets too popular the servers and network could get overwhelmed making the server costly for Apple.
There's nothing stopping Apple implementing peer-to-peer technology in iTunes to help reduce serving costs.
There's nothing stopping Apple implementing peer-to-peer technology in iTunes to help reduce serving costs.
That would be great, but that seems like a complex setup wrought with issues.
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