Networks wary of lowering iTunes TV show prices

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Networks wary of lowering iTunes TV show prices

Despite last week’s statement from CBS CEO Leslie Moonves that “certain shows” would be sold on the iTunes Store for $1, many networks remain wary of cutting prices in order to boost sales. The New York Times reports that Apple has been pushing for lower TV show pricing—sometimes desperately so, according to private remarks from some TV executives—in an attempt to line up content for the iPad. The networks, meanwhile, are said to be interested in making their offerings more attractive to Apple’s 125 million iTunes account holders. “We’re willing to try anything, but the key word is ‘try,’” said a TV network executive who requested anonymity. The report also states that Apple’s $30 a month subscription proposal has not been ruled out entirely, according to executives at two of the networks, although Apple has encountered significant reluctance to the plan due to its position as a direct competitor to traditional cable and satellite services.

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Comments

1

There must be a test somewhere to become a media executive; if you have the common sense and business sense of, say, a 6 y.o. with a lemonade stand, you’re eliminated.

Of course the Apple model competes with traditional cable and satellite services, but so doesn’t their own website (free with ads), Hulu (free with ads), and, the biggest elephant in the room, bittorrent sharing sites.

The traditional model of broadcasting once or twice with ads on the parent network, then selling into syndication and/or selling DVD sets of television shows is dying. This is obvious to anyone except television execs apparently. The biggest consumers of episodic television aren’t looking to be figuratively tied down in increments of 1/2 hour, of which 9 minutes are paid advertising, on specific dates and times just to catch a television show. They DVR the shows and fast forward through most of the ads anyhow. They wait for the summer and netflix the whole series on disc and catch up in few weeks without commercials what was strung out over a seven month span. They watch them on their lunch break on the computer on the parent network’s site with much less ads. They bittorrent them for free either when due to arcane negotiations the show isn’t available where they live, is on a premium channel they’re otherwise unwilling to pay for, or even something as simple as they missed its live broadcast. In dead last, *some* are paying higher than DVD prices to essentially have Apple DVR their shows for them without commercials. At $2 an episode, you average series comes in significantly higher than the DVD box set, and even when you buy a pass, it’s still higher in most cases.

Instead of worrying about clinging to dying broadcast methodology, they need to crunch the numbers and figure out how much they actually net from advertising per viewer, because with Apple eating the storage, bandwidth, and billing costs for them, anything better than the net advertising revenue per viewer is a good amount to be making.

Posted by Code Monkey in Midstate New York on February 24, 2010 at 4:55 AM (PST)

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