Apple cutting iTunes pricing on TV episodes?

According to a report from Variety today, the Jobster and crew aren't stopping at iPhone price cuts. If you believe what the entertainment rag has to say about iTunes, the word on the street is that Apple is hoping to halve the cost of TV shows, dropping the $1.99 price to just $.99. Variety claims three separate sources have indicated that the Cupertino juggernaut has gone as far as telling networks and studios about the price drop, and that the plan was actually the cause of NBC's departure from the music / TV / movie download service. Apparently -- as with the Peacock network -- other providers are balking at the change, particularly when it comes to DVD boxed sets, as $.99 per-episode downloads could impact sales that many studios rely on. The paper goes on to claim that studios are interested in the idea of tiered pricing for older and newer shows (offering something like The Brady Bunch at a lower price than last week's episode of Lost), though Apple is resistant to the concept. Still, the report is largely hearsay at this point, so until we get some more solid facts, we're treating this as educated speculation.

[Thanks, Xavier]

[Eric @ Sep 7th 2007 11:40AM]

That would be awesome. However, this doesn't seem to make much since. A 30+ minute TV show for the same price as a 3-5 minute song?

I think the pricing scheme is fine to be honest, but I'm not going to refuse a price cut. I would definitely being buying more TV shows if thats the case, when I get my iPod touch that is.

[john @ Sep 7th 2007 1:02PM]

Considering that most shows are free to watch on television (excluding cable costs), I had always found it a ripoff to pay $2.00 for something I could get free.

...Or maybe I'm just the only person who still has a VCR in addition to a DVD player.

[Alan Partridge @ Sep 7th 2007 2:08PM]

They're not free they're 'free at the point of use'. Cost of advertising is added to cost products you purchase, so you pay for it in the long run. The value of what the networks get from advertising revenue, compared to what they give us in 'entertainment' does not come anywhere close to a good deal.

[James @ Sep 7th 2007 4:14PM]

"A 30+ minute TV show for the same price as a 3-5 minute song?"

I think the assumption has always been that you'll listen to the 3-5 minute song a couple dozen times at least, whereas most of us would only watch a TV show once or twice (which is why I can never seem to justify paying for them).

[Rick @ Sep 7th 2007 11:34AM]

I want to have Steve's babies! This is great news! I'll pay a buck for a TV show.

[Ireland @ Sep 7th 2007 12:59PM]

You said it 'junior'

[John @ Sep 7th 2007 11:35AM]

Theoretically, wouldn't more people want to buy OLD TV shows? I mean, you can just watch the new ones, they're on TV, but the old ones are harder to find. Thank god for DVRs, eh?

[Boynamedsue @ Sep 7th 2007 11:40AM]

i got BSG off itunes even though i'd eventually get the dvds because week to week it was worth. I could enjoy a show without having excellent drama interupted by a bear puppet telling me how soft his product would make my clothes.

[Boynamedsue @ Sep 7th 2007 11:36AM]

As it stands now the 1.99 pricing makes a season of some shows cost more than it does on dvd. Meaning the network is making more money on the shows. I thought the rumour that NBC wanted more money was unreasonable.

.99 cents for a show seems too low, but then, some people want to watch as it airs, but are still going to get a dvd box set.

Also, why no distinction between hour long and half hour shows? Why not make half hour sitcoms .99 cents and hour long dramas like BSG 1.99?

[joey @ Sep 7th 2007 11:45AM]

"I thought the rumour that NBC wanted more money was unreasonable."

I guess this is that whole spin thing that PR people get paid for. That way each side can say they are in the right and the others are in the wrong.

[randy @ Sep 7th 2007 11:36AM]

Pffft, screw the newtworks. DVD "Boxed Sets" are ridiculously overpriced. I had to break down and pay CBS and Best Buy $54 for Season 1 of "The Unit" (i didn't have time to torrent it). Felt like I'd been mugged.

[everrette powell @ Sep 8th 2007 3:05PM]

you were

[pacheco @ Sep 7th 2007 11:36AM]

If this is true, then I'll actually start buying episodes from iTunes. For the quality and limitations, I always felt that 2 bucks was too much (for me personally).

[Vic @ Sep 7th 2007 12:21PM]

same with me - I'm more inclined to pay $.99 than 2 bucks for tv shows - 99 cents just sounds like a good deal!

[Josh @ Sep 7th 2007 11:43AM]

I've had a ipod for four and a half years and (which just died on me but I just ordered the 16gig touch) I have never once bought anything off of itunes, I would rather just buy the CD and load my tunes off of the disc and I never had the need for video because I had the old blue and black screen but on top of that I thought having just a digital version of a tv episode was way to much but for the same price as a song I might just start using itunes more than my digital back up to my cds. Good call Apple, you might have won me over but we'll see if this turns out to be true!

[Mike @ Sep 7th 2007 11:44AM]

Now, I was afraid to be butchered by the Apple fanboys before, so I never really stated my opinion on the whole NBC/Apple affair. Now, I believe while NBC handled the matter poorly, I can honestly relate to their case. As the people who own their content, NBC should be allowed to have control over it (and how the content is distributed, and at what price). Apple seems to forget that iTunes is simply a GUI for internet distribution, not some miracle holy grail of music. They should open up their interface to allow artists and labels to upload, manage, and price their own content. Hell, I'm sure studios will start to release some stuff for free or at really low cost in order to promote higher priced content, as well as giving us much needed tiered-pricing. We could start seeing things like charging more for the most popular songs on a track and charging less or nothing for the least popular...there are a lot of possibilities to consider, all of which are beneficial to the consumer because at the end of the day it just gives us more choice. Apple's vision of having control of everything isn't my idea of bright, I much prefer the innovation that can come with individual pursuit.

You guys cry when NBC says it is going to raise its prices, but guess what, thats how capitalism works. If prices are too high, don't pay for them, when the studios release they could make a lot more money when they stop price-gouging, they will start to lower prices. It may not be soon because sales are still booming...

However, that being said, while demand is such that people ARE paying well at those prices with optical media, so low-priced internet distributed content is set to take the record industry down fast and hard. They realise this and are all going to move into this realm so they can get a hold of it before it destroys it. They are not going to move in to a platform that they have no control over it, and I don't blame them, I wouldn't keep a contract with iTunes that lets them choose how and at what price to distribute my content.

Stay tuned...iTunes really is the past. What was was an innovative software has become proprietary, bloated and stale. New competitors to the internet distribution game are coming that will destroy the years-old iTMS system...

[Quix @ Sep 7th 2007 11:50AM]

Ballmer, is that you?

[lo-kii @ Sep 7th 2007 12:52PM]

...I do agree with some of your points. however, this whole market for downloading videos/movies, etc. specifically through iTunes is a market that was created by apple and their products. I think that entitles whether incorrectly or not I think apple feels they can control the market. I know there are dozens of way to download movies and things, but apple created a simple market for people to easily gain access to these things. I'm sure lots of people download torrents, but theres still a large segment of people that dont know how or wont do that, they'd rather pay 1.99 for that episode of greys anatomy that they missed or whatever. I know nbc is moving to amazon unbox but from what i've seen its not even close to the ease of use that apple provides with their 'bloated software'. I think thats a main issue many people are missing. Because of apples huge market penetration 100million ipods sold? i mean thats a large market that will now no longer had nbc content and i would think that this majority of people who are actually paying for these downloads, so I dont see how this helps nbc. But to the main point, this is an interesting situation because the market in which nbc and other providers are trying to increase prices on their content is the same market that essentially apple has created and has full control over it. I cant think of many markets so indebted to a specific company with no real competitor. Competition is good for the consumer, the problem is we're not getting jacked by apple as of now, and thats affecting these content providers, because they want MORE money.

[Mike @ Sep 7th 2007 1:04PM]

You make some valid points. iTunes was created with Apple's ease-of-use design philosophy that made it and the rest of the company so successful. However, other companies are STARTING to catch on, and like i said, you will need to wait a while but iTunes is not the end all, be all solution. This is because it LACKS flexibility in content management. Thats all.

I could very well see why Apple would want to retain control over a system where it has a huge stake (with over 100 million ipods floating around), but I could very well see why NBC wants to manage their own content. I never agreed with either company, both are being stubborn and acting against the interests of the consumer (there is no reason Apple could not upgrade their iTMS platform to allow independant artists or record labels to upload and manage their own content.). NBC handled it even more poorly by not realizing that iTunes is their only source of distribution at the moment, which will be replaced by other (potentially illegal) sources. 99 cents is not outrageous for each episode, and NBC could of held a contract with Apple, appealed to the community, and waited until other solutions came onto the market. NBC is losing money on this one.

As for raising prices? Possibly, but you can fight higher pries buy refusing to buy the product, but price flexibility gives us competition which will lead to LOWER prices. What happens when other studios release backlogged shows at 20cents? Maybe some studios release them for free. Who knows? I'd like to see the possibilities that come out of price flexibility.

[john @ Sep 7th 2007 1:24PM]

Actually, the way capitalism works these days is such that, when a company holds a more-than-significant amount of market share, companies that rode on the coat-tails of their success then have to pay the price to maintain the parent company's success. Take Wal-Mart, for example. They have such a huge impact on a product's success that they actually dictate how they will price it on the shelves, with all expenses coming out of the contributor's pocket. NBC never would have had the same success with their online distribution if it weren't for iTunes. Over 100 Million people own an iPod, and iTunes has led to the success of the internet media business in general.

As prices start to level off due to market saturation, Apple has choices to make to keep their product alive. NBC should be more than grateful for at least making some kind of revenue off of their free network broadcasts, which, without iTunes, would probably be YouTube fodder.

I doubt this is the end of iTunes. As Jobs noted, iTunes is the number 3 music distributor behind Best Buy and Wal-Mart, two companies that operate actual stores and sell actual CDs. NBC is taking a huge gamble by abandoning 100 Million potential customers in hopes of sparking interest in Amazon.com. I wish them the best.

[lo-kii @ Sep 7th 2007 2:17PM]

I see we're all pretty much on the same page.

This is basically a new market and NBC and most likely other companies want to explore other options, but I think NBC will soon see their # of buyers are much lower on amazon than they are on iTunes, thats probably why they are waiting till december in the midst of their new season they'll still how the numbers are moving.

This move also affects apple because they have some products [apple tv] that are almost useless with little to no content so they need they content providers but I'm sure their apple tv customers want nbc content to their tv and so for, their will have to be some sort of comprimise or another way to get this content[competition] other wise, both companies will lose in the long run to free[illegal or youtube] services.

[Quix @ Sep 7th 2007 11:47AM]

Dear studios,

Sell television programming for $.99 a show and I'll cancel my cable and TiVo subscription (which I use to skip all your obnoxious ads anyway) and buy all my television through iTunes. I don't buy at $1.99 because it's not financially practical for me. $.99 is another story entirely.

My money is on the table. Do you want it, or will you remain stuck in the 20th century?

Sincerely,

Your progressive-thinking customer with cash to spend

P.S. I don't buy DVD box sets anyway, so I'm no lost sale there.

[SteveJ @ Sep 7th 2007 11:45AM]

99 cents makes a heck of a lot more sense. I'd actually buy some shows at that price instead of getting them via "other means", just for the convenience. At $2 an episode that convenience wasn't worth it to me, but for only a buck? Why not. However, that only applies to weekly shows. For "Daily" shows, 99 cents is still too much. You're talking $20 or more per month for just one show. Crazy. For daily type shows the price should be 99 cents for one week worth of episodes.

[SteveJ @ Sep 7th 2007 11:45AM]

99 cents makes a heck of a lot more sense. I'd actually buy some shows at that price instead of getting them via "other means", just for the convenience. At $2 an episode that convenience wasn't worth it to me, but for only a buck? Why not. However, that only applies to weekly shows. For "Daily" shows, 99 cents is still too much. You're talking $20 or more per month for just one show. Crazy. For daily type shows the price should be 99 cents for one week worth of episodes.

[Joe @ Sep 7th 2007 11:51AM]

A point of correction: NBC did not want to charge more per episode, they wanted more pricing flexibility. They also wanted to give a break to people who bought an entire season of episodes. In other words, and using made up numbers, they wanted to, say, charge $1.99 for a single episode, but $24 for an entire season. I suspect they also wanted pricing flexibility between half-hour shows and hour long shows.

(I'm puzzled as to why Apple is so intransigent over this issue. Charging more for newer, more popular, songs and shows and less for old stuff seems very logical. There are plenty of old songs and shows I wouldn't pay "full" price for, but would take a stroll down memory lane for a deeply discounted price. [I've been meaning to give the original Mission Impossible a whirl.])

[yoshi @ Sep 7th 2007 12:01PM]

Wow, the NBC fanboys are out in force today.

[Quix @ Sep 7th 2007 12:02PM]

"A point of correction: NBC did not want to charge more per episode, they wanted more pricing flexibility. They also wanted to give a break to people who bought an entire season of episodes"

Wow, Joe, naive much? "Pricing flexibility" basically means "price increase." You need to learn corporate-speak.

Oh, and in iTunes you usually *do* get a break when you buy an entire season of episodes.

Your dream of "deeply discounted" pricing for older programming is naive too. Basically NBC would sell you the old crap for the current prices and new crap for *increased* prices. Believe me, NBC's position in this conflict does not have you, the consumer, at heart.

This is why Apple is so "intransigent" over this issue.

[Celebrity Poker @ Sep 7th 2007 12:10PM]

I could swear entire seasons ARE cheaper on iTunes.

It seems like any speculation about what NBC wanted with their "flexibility" is just that - speculation. They are charging iTunes prices on Amazon, so it doesn't seem like the $1.99 was a real problem. I suspect they wanted to bundle less popular shows in with the good ones, but what do I know?

It seems like once you get used to downloading stuff thru iTunes, people DO actually browse the content there looking for new shows, so it seems like pulling out of iTunes is not a good move.

For the same reason, I think the WiFI store should have podcasts. Once I get used to accessing new material on the go for free, I'll be more inclined to also make purchases that was.

[Mike @ Sep 7th 2007 12:31PM]

Ah, Quix, are you that naive about Apple? If they had, you, the consumer at heart they wouldn't price gouge you on certain *cough* mobile devices, and on things like RINGTONES.

Get a clue, one corporation is not your friend and the other is not your enemy, they are both simply after the money in your wallet. Let them both freely pursue their own attempts to get at that money and dont take it personally when they make it obvious. Just dont buy, its as simple as that. Stop buying, and thats the harshest thing you can do to a company. Enough people stop buying, and the corporation will listen.

I say let them price their content however they would like, and they bear the risk of losing demand for that product or for people moving to alternative means (for people getting price gouged on internet distribution, that means piracy). You reap what you sow.

[Quix @ Sep 7th 2007 12:43PM]

"Ah, Quix, are you that naive about Apple? If they had, you, the consumer at heart they wouldn't price gouge you on certain *cough* mobile devices, and on things like RINGTONES."

Well, Mike, I'd love to see something equivalent to the 8 gig iPhone for $399 or the 160 gig iPod classic for $349. Links please?

And if I'm not mistaken, the cellular service providers nick you for more on ringtones than Apple does.

Of course Apple and NBC are both corporations and of course both have their own interests in mind. But as a consumer, my interests align much more closely with Apple's in this particular fight, and I believe yours do too. Which is why I'm rooting for Apple on this one. And you should be as well.

[Mike @ Sep 7th 2007 1:02PM]

Yeah, but it is also in my interest as a consumer to a see 8800gtx graphics cards for 100$, but thats not going to happen. And the iPhone was 599$ just yesterday, and I don't think they managed to reduce production costs by TWO HUNDRED dollars per phone in just the month or so its been out. And even if you count the one hundred dollar discount (which, by the way, was a clever ploy to lock you into iTMS), they still got you for 100$.

And, by the way, I'm not an anti-Apple person, I just bought an iPhone and a Macbook Pro for my girlfriend, they have some great products out there.

I'd much rather see price flexibility as it gives the chance for PRICES to go DOWN. Competition in that market will make it happen. What happens when ABC decides to charge 45 cents per show? If Fox gives out every other episode for free? Lots of possibilities, and we can always fight a price hike by boycotting the product. If we get locked into a fixed-price mentality this early we are dooming ourselves.

[Joe @ Sep 7th 2007 10:29PM]

The stupidity of posters on this site never cease to amaze me.For those who failed Econ 101 (i.e. Quix) the ability to adjust prices to increase sales volumes can result in higher profits. In a truly competitive environment, prices will be adjusted according to demand to maximize returns. Sometimes this would result in price increase, but generally competition results in lower prices. Apple simply won't allow price to reflect demand. (This is called the power of monopoly, for those who never attended Econ 101.)

[Rabidkeebler @ Sep 7th 2007 11:16PM]

Wow, Joe, you need to take a few more Econ. classes before you leap to conclusions. If you think the entertainment industry is upset that Apple is charging "TO MUCH" for their products then I want whatever your dealer is selling.

As it stands right now the entertainment industry is upset at the low prices (see Universal Music). Universal thinks that it can charge higher prices and still recieve the same (or similar) amount of downloads that it is getting right now. Now the flexible pricing that NBC was talking about is probable for less popular shows or packaging those less popular shows with "The Office".

Seriously if you think that the price of the new episodes of "The Office" will go down when they get their own distribution (Huego? I forgot its name) then I will owe you a coke, or pepsi, or whatever your bevereage of choice is (stipulation is that is must be of the same quality and commercial free).

[Joe @ Sep 8th 2007 5:42AM]

Rabid, you still miss the point. Apple is exercising monopoly power and preventing competition and flexible pricing. Yes, extremely popular shows would probably cost more in an open market, but less popular shows would cost less.

I never asserted that flexible pricing meant every show would go down in price, let alone "The Office" (which I can't stand--don't like most NBC shows now that I think of it.) I would wager, though, that the average price of all programming sold would go down with a fully flexible scheme.

My original post and follow up was to simply observe that NBCs dispute with Apple was a simplistic "NBC wants to raise prices". I'm also genuinely puzzled as to why Apple has been so resistant to compromises on pricing in this regard. It seems to be more than simply wanting a simple pricing model. I do think change is a matter of when, not if, and entirely dependent on how many other content providers follow NBCs lead. (And, like everything else in business, the result will be a compromise where both sides can declare victory.)

[brute @ Sep 7th 2007 2:03PM]

Oh Great, Apple.

Now, you've given those iTunes TV Show buyers something to whine about like the iPhone Whiners out there...

I can't wait to hear the iTune TV Show Buyers state ,"Well I just bought Battlestar Galactica Episode xx for $1.99 last month, and now Jobs slapped me in the face by offering it for 50% off! I want the difference refunded! I hate Apple! I'm never buying anything from Apple again!"

Sheesh.

(In case you can't tell, this was a thinly veiled stab at all of those iPhone whiners out there...)

[HoldenCfld @ Sep 7th 2007 12:10PM]

I wouldn't say the NBC fanboys are out, I'd say the non-Apple ball licking guys are here.

[AlexNC @ Sep 7th 2007 12:11PM]

I currently do not purchase TV episodes off iTunes because the $1.99 price is too high. But if they are able to make them $0.99, I will start downloading a lot of them. I don't have Cable or Satelite TV, so it will be nice to use this as an a la caret service. I wish the media networks would wake up and go with this. Treat it more like a payed for service, like HBO.

[Shon @ Sep 7th 2007 12:42PM]

If apple drops tv shows to .99, I'll buy an apple TV... at some point.. but ill buy one. A buck is absolutly reasonable for a show.

[Herbert Neal @ Sep 7th 2007 12:21PM]

Just use bittorrent. It's free.

[malvegil @ Sep 7th 2007 12:35PM]

This is not going to make me buy iTunes TV Shows any faster.

[jeff @ Sep 7th 2007 12:57PM]

this is about creating a demand for having tv shows on the go, ie... watching tv shows on the new ipod touch.

it's not easier than ever to download shows and watch on a small device, and it looks better than ever with the bigger screen. i can see myself buying an episode of xyz every am and watch on my way to work in the subway. the cheaper the shows, the more people will download and watch it, and the more people will put up the money for the ipod touch.

nbc doesn't get it. this is about creating a demand for people to watch and PAY for tv shows in another venue/device. it's about volume. if every person that has an ipod out there decides to upgrade to touch, everyone one of them can potentially by tv show buyers. that's a heck a lot of people.

[Jeff @ Sep 7th 2007 12:59PM]

this is about creating a demand for having tv shows on the go, ie...
watching tv shows on the new ipod touch.it's not easier than ever to
download shows and watch on a small device, and it looks better than
ever with the bigger screen. i can see myself buying an episode of
xyz every am and watch on my way to work in the subway. the cheaper
the shows, the more people will download and watch it, and the more
people will put up the money for the ipod touch.nbc doesn't get it.
this is about creating a demand for people to watch and PAY for tv
shows in another venue/device. it's about volume. if every person
that has an ipod out there decides to upgrade to touch, everyone one
of them can potentially by tv show buyers. that's a heck a lot of
people.

[DodgerBlue @ Sep 7th 2007 1:09PM]

This would be great. I wish HBO shows were on iTunes.

[Todd @ Sep 7th 2007 2:14PM]

If NBC is worries that $.99 episodes will hurt DVD sales, work with Apple to provide DVD quality episodes at $1.99 and keep the current broadcast TV quality episodes available at $.99. This allows people who just want to watch video on their iPods happy with the cheap stuff and those of us who watch on our HDTVs happy for immediate availability, great picture quality, and less DVD storage! Shouldn't be an iTunes problems since I seem to remember studios offering movie trailers at higher than TV show quality.

[jyang @ Sep 7th 2007 2:44PM]

Dude, that's almost certainly what Apple was asking. Apple is clearly moving toward offering HD quality content at some point--but in order to sell that and not break their price boundary of $2, they're going to need to cut prices on broadcast quality stuff. Prediction--the ability to buy HD-quality video content via AppleTV from your sofa is six months or less away...the arrival of the iTunes WiFi Store shows that Apple isn't afraid of end-running the computer anymore...

jeff

[Galley @ Sep 7th 2007 2:56PM]

Let's see, $20 per TV show season x 12 shows = $240 per year. So why am I paying $50-70 per month for satellite? Oh yeah, tons of HD. C'mon, Apple; where's the HD content?

[ssuk @ Sep 7th 2007 3:19PM]

probably WHY the price cut is going on is because they're going to throw in new HD content... But most iTunes video is for iPod viewing, so HD content isn't really a good choice, but adding HD content would get more people interested in downloading from iTunes altogether...

[Joppa @ Sep 7th 2007 8:25PM]

You know of course that they will charge more for HD don't you?

[ssuk @ Sep 7th 2007 3:15PM]

How about giving the UK pricing policy a shake-up? We're paying double for the same content over here, soon to be 4 times the price if this new price-cut goes ahead.

[bigazzknocks @ Sep 8th 2007 7:18PM]

For DRM'ed episodes, 99 cents is stil too much.