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Yep, good ol' reliable Disney/ABC. They'll stick around, make a ton of money, and the other networks will sheepishly follow their lead back into the iTunes fold.

I'd sure be more inclined to buy them at $.99. Then, when the DVDs come out I wouldn't even mind buying the box sets if they were reasonably priced. Instant gratification for $.99 and then get all the extra goodies later with the DVD release.

.99 is a good price. How many times am I going to watch it. Twice max.

The studios are being short sighted. DVDs have extras and better quality. I will pay for that if the original show isn't crap (like a lot of tv is.)

Believe me, I'm an Apple fan through and through, but I stopped for a minute and thought about the other side.

If I were a producer of shows and I would like to set it's price for downloads but some other company who I use as the vehicle to distribute tells me what to price it at, I would be quite irritated.

There has to be some middle ground. Seems a distributor shouldn't have full say on pricing over a creator of that content.

Thoughts?

I'd be far more willing to purchase TV shows at $0.99. As it is I generally stick with the South Park season pass and nothing else. If the price was reduced I'd certainly look at more purchases such as The Daily Show.

I'm not sure that keeping Disney/ABC would singularly support iTunes TV downloads if all other networks started pulling out; simply because people often like the one-stop shopping scenario and might tend to go where they can get most of their shopping done all at once.

Having said that, it sure does look like Apple's got something up it's sleeve again, and I'm really curious what the real issues are for Apple and its desire to halve its TV download prices. What's the plan man - I know from experience that there almost certainly is one. Maybe SJ is moving slowly toward free downloads in exchange for advertising within the download stream or within the program itself - I really dislike that idea, but again, I'm just wondering what the real goal is - 'cause I'm pretty certain there is one [a goal]. Advertising dollars almost always mean more money for the producer and the distributer, one of the reasons we see more and more advertising when we go to the theater (I'm not refering to trailers), and more and more when we pop a rental DVD in to watch at home too.

Fixed costs vs variable, and algebra. A x B = C.

$0.99 x gigantic number. It's a threshold consideration. AAPL just understands it's about behavior modification - lower the price, establish an impulse to buy rather than steal, and repeat.

Seems simple.

Pirates Bay, ahoy - torrents, rum sodomy, and the lash!

This is nothing but negotiation. Studios want the moon and Apple wants $0.99. Maybe they end up at $1.29, who knows. It appears that SJ has the upper hand at present so he should come close to what he wants. If all the studios say no then the studios could have the upper hand and the price could go way up.

No matter what it will be interesting to see this unfold.

"Number One, Apple spilled the dirt of our little plan to radically increase TV show prices"

"Dr. Evil, we should counter Apple with a lie saying it was Apple who wanted to cut TV shows to 99¢"

"Huh?"

"It will make the other networks reconsider their contracts with Apple"

"Ahhh good Number One, muhhahhahaaa!"

I have never been on the studios' side for any of this, but that one thought did make me pause. I can see DVD sales taking a hit if shows were available on iTunes for a buck. (Now, whether the studios would make back the money is another story.)

As for adding advertising, I think it's very unlikely. Apple has made the correct financial decision so far to throw their lot in with charging for ad-free content (the HBO model) rather than the continuously-proposed idea that people prefer free content even if they have to watch ads (the network model). Plus I think that the idea of commercials embedded in iTunes-sold content offends Steve Jobs' sense of taste -- a very powerful decider in Apple's design and product offerings.

At 99c I would treat downloads like a rental and delete it after viewing. Anything worth watching twice is worth buying on DVD.

WalMart needs to push HD as the differentiator for physical sales, since DVD is a dead end for them and it is not worth the effort for consumers to download and back up HD content.

to M.A.D.:

In principle, I agree with you regarding the concept of the content creator having the ultimate control over pricing of their product.

However, much bigger thing is at play here. Digital downloads (an oximoron; what other kinds of downloads are there? Analog ones??) are a very new, emerging technology. Nobody knows how to operate it. The original business model has been out there for 7 or 8 decades (even more, for movie theatres). This is all new and right now, Apple seems to be the only one that shows understanding of the market. Therein lies the problem; Apple is forcing everyone to play by its rules, since it seems that the past four years showed that it is the only one in town that has figured it out correctly. Apple is saying: "You must listen to us! You'll thank us later! Let's first build this market as fast as we can! Our rules seem to be working, so let's not mess with them!". Meanwhile, studios are seeing rapid erosion of their level of control over their own content. Record labels have already gone through this and many secretly with they could do what Universal is trying to do -- wrestle back at least some of the control over their ditigal distribution from Apple.

Until this market is fully mature and consumers completely are familiar and comfortable with downloading their entertainment, labels and studios have no other choice than to listen to what Apple says and do what Apple wants. It is, at this point in time, in their best interest to do this in order to build this thing up fast. Once it is finished, let them maneuver around pricing, bundling, subscriptions and other concepts.

Just a small thought here for all to consider.

We are talking a re-broadcast of a TELEVISION show are we not???

The show was broadcast FREE. NO COST. TAPE it ( VHS or DVD) and give a copy to your friend.

And now you want HOW MUCH to let me watch it again or for the first time cause I missed it???????? HMMMMM????

Lets see, does it include "Reverse-ie"? Does it have games included??? Does Ballmer sell it on TV?? LOL

I will agree that for 99 cents, I would consider downloading a lot more shows to watch that I have missed. Hmmmmm?

en

Simple truth: he's right! $0.99 is probably the sweet spot if you're going to start charging for something people are used to receiving for free. I know I balk at numerous shows simply because I know I'll never...EVER...watch it again. I probably would have bought a season of 24 @ $0.99 an episode...no way in hell is it worth $1.99! Wake up Hollywood!

Gotta agree with M.A.D.

It's always fun to see someone else's rice bowl get pissed in, but never fun to get YOUR rice bowl pissed in.

I wonder what MDN would think if Apple released an update to Safari that would completely eliminate all ads on a web page. All of a sudden we could read MDN free of ads. I don't think they would be appreciative of that.

Just see how you feel when someone takes your income stream away or reduces it in the name of "the future".

Why doesn't Apple just cut their entire product line pricing in half. I mean "they will end up making more money from [volume sales] under the new proposal."

Apple will make more money in the long run from this deal by selling more iPods and such. And that's good, for Apple. However, if someone was "proposing" to take my money. I'd object furiously too. So don't be so quick to judge the studios. They're doing what anybody would do.

Just don't buy their junk food entertainment and read a book, that's how you'll really show them.

I wonder what MDN would think if Apple released an update to Safari that would completely eliminate all ads on a web page. All of a sudden we could read MDN free of ads.

Install Pithhelmet, done. Takes only a second and it's donationware.

Use a proxy server if you want the proxy to receive the ads and not you. This way MDN gets a hit count on the ads.

There are all sorts of tricks, just take the time to learn.

Maybe this is part of a bigger plan. Like offering standard def shows for $.99 and HD shows for $1.99?

So, what do you think of the price in the UK, £1.89 - that's $3.84 currently.

Sure aren't going to sell many in the UK market, that's for sure. At 99 pence, possibly.

@MDN

"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."

It is very simple. The people in control at any of these companies have large vested interests in not changina paradigm. They are worried about their jobs and bonuses this year and next year, and that means not risking sales or profits inthe short term. And you really can't blame them.

It is easy for Apple to innovate in areas where they have absolutely nothing to lose.

Just see how much puch back you get at Apple when anyone suggests giving up hardware manufacturing and licensing the OS. That is a change in paradigm.

How about .99¢ for a half hour show, $1.99 for an hour show and $2.99 for full length movies?

Wouldn't that be close enough to the DVD prices.

More DRM, please!!!!!!!

to M.A.D.:
I do agree that the content providers are unhappy for that very reason. However, the content providers have proven that have no interest in what the consumer wants, which is very relevant to sales figures. Should the consumer be able to set the price and the rules? No. However, the price should be set so that consumers use the system enough to make profit for both the content provider and distributer (in the long run) and successully grow the system. Here, Apple is saying that they think $0.99 an episode is better for the long-term growth of the system.

While I do believe the DVD angle is a legitimate consideration for them, another factor here is their absolute fear of this kind of distribution. These are people that for years dictated when and how often you would see their content. Only on their terms. The VCR make them quesy. DVD collections of series (the thing they are trying to protect) gave them acid reflux. DVRs are causing massive GI episodes since this really gets at their money (advertising). DVDs are difficult to rip for the average consumer. DVR content is difficult to transfer from the DVR for the average consumer. However, the average consumer can use iTunes and download invididual episodes. They can watch them on mulitple devices and whenever they want. This is anathema to the networks. Once they get over the distress, though, they will enjoy this just as much as they now love DVD box sets.

Personally, I don't understand why more shows are not on iTunes. I know that there are problems in some cases because the studio and the network have to agree. But they act as though putting a show on iTunes kills all their other options. For instance, Daybreak. ABC killed the serialized drama in mid-season, they spent fucking forever trying to decide what to do with the episodes. They already had the episodes done, but waited weeks to put them on their website. OMG! They're free! If you enjoy your HD shows on a 3 inch screen in flash with ads you cannot skip. Put them up on iTunes already! The money has already been spent on production. You can take them off later. Oh, the DVD sales. Whatever. Stupid network choads.

The $.99 price tag is purely aimed at removing user's reliability on broadcast TV and making it affordable to watch all your shows on the Net.

I'm still of the opinion that until you get live news and sports streaming on iTunes, it will be very difficult to get people to sever their broadcast cable/satellite ties....

Still, this goes a huge way in getting adoption....if only they could bring it to Canada....

M.A.D.:

As an independent filmmaker, believe me, you are at the mercy of your distributor.

MW: "need" as in "I need to make money."

We're crazy! We're Insane! We're slashing prices down here at the iTunes Emporium!

Bad credit? No Problem!

iPhones for $399! TV shows for a buck! You'd have to be CRAAAAZY not to buy!

Retailers have the right to determine what product they wish to sell on their shelves and to a degree indicate what price point they think that will sell. Target might have a bike company saying their bike is worth $1,500 retail and target can say sorry but that is not what our customer base is willing to pay for a bike. If you want to be in our store is needs to be X.

All the studios are free to not distribute their TV shows at all on the internet. They are also free to explore all avenues of digital distribtution. DVD boxed sets are important to the true fans of a show that want that quality and perhaps the bonus material that is offered. True fans would probably watch on tv, buy on internet and get the DVD a year or so later when they finally come out. DVDs do not address timely shows such as American Idol and The Daily Show.

I am one of those guys that has over a thousand DVD's and collect them like crazy, but even I have very few boxed sets of TV shows for this very reason, they are way too expensive.

In Canada, the average boxed set of a TV show is just under $100.00 when it first comes out or is very popular and then settles down to about $50.00 or $60.00. Second hand they are between $20.00 and $40.00.

Considering most sets only contain about a dozen half hour shows, even the budget, second hand, cut rate price is far too much to pay for this kind of stuff. The only reason to pay it is if you are a "collector" but then a collector won't buy a digital download anyway.

i have yet to buy a single TV show from iTunes...

but if they dropped to $.99, suddenly Apple TV and ditching the satellite dish seems like a good idea!

lets see, a few shows for the kids, a season of myth busters, and season of The Daily and Colbert.....

heck i could save enough money to buy a new video nano for the kids to watch on the go!

if he can swing this, i have to make a run to the Apple store....

I wonder what MDN would think if Apple released an update to Safari that would completely eliminate all ads on a web page. All of a sudden we could read MDN free of ads. I don't think they would be appreciative of that

Now ask MDN: what if Apple blocked every ad, but in return you got 99¢ for each unique visitor every time you updated the site?

Just think of all those ipod nano owners coming in that will have a strong interest in tv shows for their ipod now. Maybe Steve is right, the studios will make more.

btw, mikeintosh's analogy with apple cutting prices doesn't work because, the studios cost will not change if they sell twice as many shows, where apple's cost will double (well maybe not double) if they sell twice as much hardware.

"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.

This is very true. And after all, it's all icing as far as the studio profits go so why the hell not? I've bought maybe 10 TV shows and one season from iTunes. I'd buy more than twice that if the price were cut in half. 99 cents just makes it easier to take a risk on a show, especially the "half hour" ones.

No more TV Shows on iTunes from NBC? But I was a faithful customer?!! Oh well. Hmm...what did I do with that bittorrent program....Ah, there it is. . .

MOST IMPORTANT:

Money from iTunes is virtually pure profit. From DVD box sets. a significant margin is spent on packaging and distribution....far, far more than Apple charges for iTunes. As well, in-store marketing costs are paid for by the distribution companies which eats significant margin as well.

More profit on iTunes? Maybe if prices come down to $.99.

Apple is simply using Wal-Mart tactics in negotiating with it's vendors. Apple like Wal-Mart has an understanding of the price point at which the customer/consumer "perceives" value in a given product of service. This understanding is derived simply from a supply/demand analysis. Retailers like Apple and Wal-Mart that represent such an overwhelming amount of the retail sales for the respective products that they represent to customers can demand that the manufactures/producers of products adjust their pricing to be reflecting of the demand/supply curve. Unfortunately, for media producers, there is an unlimited supply of their product...it's all digital...and the marginal cost to produce the product is actually incurred by the retailer (Apple) as reflected in the cost of the bandwidth used to deliver to product to the consumer. In effect, it costs the producer nothing to supply additional demand and it costs the retailer to meet the additional demand. Because the retailer, Apple, controls much of the digital content market for Internet download, it's at a distinct advantage in price negotiation but at a distinct disadvantage in that the more successful a product, the more their costs increase. Apple believes that .99 is where the demand curves should be to increase business and thus profits. The producers probably believe that it should be higher. The market will ultimately determine who is right, but I would bet on Apple in this case. Ultimately, digital entertainment producers are due for an amazing market correction in the value of their product, which will democratize digital content.

Apple crapola-quality current video downloads ought to be 99 cents.

720p at least downloads should be $1.99.

What the networks really ought to do is make their own torrent site, distribute torrented copies of the programs at 720p or higher with ads included, and then they'd have the best of both worlds -- revenue from ads, customers downloading legally, and the programs being free would be in part consideration for the fact that it is the customers rather than the network providing the bulk of the network capacity for distributing the programs.

It would also be painfully simple to tell which shows are more successful under the scheme.

1. Roughly 20 million+ iPods are 5.5G or 6G video iPods in the market (and a million iPhones).

2. With the new lineup, count on that number rising to 50 million+ in the next two quarters.

50 million+ TV screens to sell shows onto. Now that's leverage, and the networks know it and are going to be sweating out new iPod sales - big time. If Apple sells over 20 million iPods this December quarter (very, very, likely), then count on Apple winning this battle.

Next year at this time, Apple will be narrowing in on 100 million little TV screens out there, and that's just too much market for any network to eliminate out of their revenue stream.

1. Either they pony up to Apple's pricing points.
2. Apple goes wifi with the nano and continues to push web content from YouTube and any other free source (such as podcasts), ensuring the networks continue to lose mindshare to other new media outlets.
3. Apple works on delivering original content via start-ups and privately held production houses that see the new opportunity via iTunes and iPods/iPhones.

Networks are going to lose this battle sooner or later and Steve knows it. The smartest networks will give up on the dying breed of DVD sales, and get on the new crack, which is downloads via iTunes.

@shen

Right on. With digital broadcast coming, that takes care of the three majors. Using the $80 per month I spend on DirecTV to download missed episodes and desirable "cable" network shows (Daily Show, Keith Olbermann, Bill Mahr, BBCA, Alton Brown) from iTS, I'd be a few bucks ahead every month. Or maybe DirecTV will recognize the real competition and stop bundling channel groups into 90% piles of crap and 10% useful programming and forcing you to go up a level to get one or two worthwhile programs.

You have to look at the network's side as well here, folks. TV shows and movies are FAR more costly to produce than music. They they are being sold without commercials, which is the revenue generator for the network.

Now factor in that the typical person who downloads TV shows likely is doing so because he or she missed an episode or two, or he or she would like to have the episodes before they become available on DVD.

Now let's throw into the mix that most people don't want to watch TV shows or movies on their computer. Most people would rather watch them on their TV, especially if they have a nice, large, HD set. iTunes downloads are not HD, and only just rival DVD quality. Right now, there simply isn't the market for TV show downloads. Sure, some people are doing it, but it's a very immature market with a small base of users. Nothing like the DVD market.

The networks can't throw all of their eggs in the iTunes basket and tell Wal-Mart and Target where to go. They still need DVD sales revenue from retail stores. Right now it's far easier for most consumers to buy and use a DVD than it is to download from iTunes and play the show on their TV, unless you have an AppleTV, which few people have.

There is NO money 'lost' by selling shows at .99 They have already ben paid for by the advertisers. In the case of NBC and Heroes, NBC probably makes another big $$$ take by licensing the right to rebroadcast Heroes to the Sci-Fi channel.

What would be the advantage to networks to sell for .99 per episode? If someone told me I should check out this cool show, I could download a couple of episodes for .99 If I liked the show, I would buy more, or tune in during its live broadcast to increase the shows ratings, and the Network could get more advertising revenue.

So what about box sets? If the show is really good, Like say Heroes, and the box set had the ever present extras like the unaired pilot episode, out takes, interviews, behind the scenes stuff, commentary by cast, and etc that would be a great value and incentive to purchase the DVD set.

In the case of heroes, that is what happened to me. A friend said you'd like this. iTunes Store provided back episodes to catch up on, and the occassional missed episode, and I got the season 1 box set when it came out.

.99 is a real impulse deal maker. If a show that looked OK in the commercial previews suddenly showed up on iTunes, I'd be willing to pay $2-$4 to see some episodes and decide if I liked it. Isn't that what propelled The Office to one of NBCs biggest hits?

Welcome to the 21st century dinosaur studio execs

Frankly, $1.99 for an individual episode seems reasonable to me. It's the $40-something (i.e. no bulk discount) that you get saddled with for season passes that's way out-of-wack.

A nice compromise between the two parties might be the following; keep the current pricing for individual shows up to one hour long, maybe bump up the price for TV movies & such to satisfy some sense of 'variability' (though no more than $3.99), and lower season pass prices so that each episode runs Apple's suggested .99c. All of the above would seem to cover all the bases.

But the whole debate ignores the REAL pricing travesty on iTS - the movies. Paying $14.99 for a sub-DVD quality, DRM restricted, digital download is nothing less than highway robbery.

Good quality titles on DVD can cost up to 1/3 to 1/2 less (unless they're new releases, which I don't think Apple ever offers anyway), have better image & sound, can be taken to your girlfriend's house, etc ... For the life of me, I can't believe anyone with half a brain would ever purchase a movie off iTS for anything but the novelty.

So if Apple want's to do something to grow their business faster, they need to both 'up' the quality of what their selling across the board ('near-DVD quality', indeed - full STD Def should be the minimum), and lower the prices of the movie offerings. THEN they can dicker about the TV shows.

I mean, deal with your most obvious flaws first guys

What if every movie producer of a movie could set the ticket price to see their movie? Don't you think the distributors would get a little hacked at trying to keep track of what to charge?

That's what we're seeing here, folks - a free medium (network TV) is trying to make money the same way that paid mediums (movies & music) currently do, all while trying to figure out how to keep their advertising revenue stream, too.

It's just not going to work that way. One revenue stream will have to give way to the other.

You have to look at the network's side as well here, folks. TV shows and movies are FAR more costly to produce than music.

Your implying that the TV networks don't make enough on the ad sales for their regular TV broadcasts to cover show production. That's not true. If that's the case, the show gets cancelled. Digital sales without advertising is extra money, above and beyond their standard revenue streams. If networks choose to sell more ads to add to the digital content, that's just them wanting to milk their content for all they can. It's not about recouping production costs.

"You're" dammit.

I buy TV shows from iTunes regularly.
I do this because I work evenings and several shows I like come on at the same time (The Unit, House, etc.) or I forget record them.

I would love the whole 99 cent thing.
I would never buy or download a show with commercials embedded in it-never.

@lurker

i hear ya, if i could choose my channels OR get 99 cent showes, either way, i would be happy, this other stuff is killing me....

MW: "later" as in when the networks and record companies will figure out a good model.....