Apple Pressuring TV Networks For Cheaper iTunes Prices
Posted 01/26/2010 at 7:13am
| by J.R. Bookwalter

It’s Apple Tablet Eve (or so we think), and our very own tech Santa, Steve Jobs, is putting the heat on the TV networks to get all of us cheaper programming via iTunes.
That’s the
news overnight from The Business Insider, who claims that Apple has been in last-minute negotiations with television executives in an effort to slash prices on TV shows sold in iTunes to 99 cents per episode -- half of the current $1.99 asking rate.
Business Insider
quotes a Financial Times report which explains that Apple feels lowering the per-episode prices will increase sales dramatically, thereby offsetting any lost revenue from the price cut itself. But the TV networks are approaching with caution after seeing what happened to the music industry in 2003 after iTunes re-energized the sagging business with 99-cent per song downloads, while overall album sales continue to drop off.
It’s not the first time Apple and the TV networks have come to the bargaining table on this subject. Between cable & satellite DVRs, Netflix and illegal downloads found online, the television networks are already facing tremendous hurdles for their traditional business model. If TV episodes fall to 99 cents per episode, a season pass likely wouldn’t cost more than $22, with only $14.50 going to the network.
While buying television shows via iTunes is popular with a select clientele who wants immediate gratification, the current pricing schemes are often more expensive than the full-season DVD releases that follow months later -- and those are often packed with extras like deleted scenes and other content you won’t get from iTunes.
Apple doesn’t release sales figures for TV show downloads, but given their tendency to boast about successes like their record-breaking first quarter announced on Monday, that’s probably a good indication that such programming makes up a small piece of the overall pie, comparative to more popular iTunes sections like the App Store.