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CBS plans to reduce prices to $1 on some iTunes TV episodes

post #1 of 42
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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.

"Its possible that Moonves doesnt 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 companys 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.
post #2 of 42
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post #3 of 42
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!
post #4 of 42
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.
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post #5 of 42
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.
post #6 of 42
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.
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post #7 of 42
Quote:
Originally Posted by Mr. H View Post

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).
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post #8 of 42


It's been 20 years since any US broadcast network had a show that was worth $1.
post #9 of 42
Quote:
CBS plans to reduce prices to $1 on some iTunes TV episodes

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.
post #10 of 42
Quote:
Originally Posted by solipsism View Post

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.
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post #11 of 42
Quote:
Originally Posted by Mr. H View Post

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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post #12 of 42
Quote:
Originally Posted by solipsism View Post

That would be great, but that seems like a complex setup wrought with issues.

Bittorrent users seem to cope? And the BBC's iPlayer downloader works ok.

You would have thought if open-source and small one-man-show developers can write bittorrent clients Apple should be able to implement a working peer-to-peer scheme?
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post #13 of 42
Quote:
Originally Posted by Mr. H View Post

Bittorrent users seem to cope? And the BBC's iPlayer downloader works ok.

You would have thought if open-source and small one-man-show developers can write bittorrent clients Apple should be able to implement a working peer-to-peer scheme?

The problem isn't the ability to write an app, it's likely the content being distributed via peers that either have to authenticate the next peer in some way via the iTS. Not to mention the content owners likely having an issue with the distribution method. I think it's a lot of logistics, politics and fear, not the ability to write a bit torrent app.
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post #14 of 42
Quote:
Originally Posted by solipsism View Post

The problem isn't the ability to write an app, it's likely the content being distributed via peers that either have to authenticate the next peer in some way via the iTS. Not to mention the content owners likely having an issue with the distribution method. I think it's a lot of logistics, politics and fear, not the ability to write a bit torrent app.

DRM isn't a problem. As I said, works with iPlayer just fine. All content on the peer-to-peer network would be encrypted so you'd need a key from the iTunes store to play the file (in exactly the same way that if you put a Fairplay-protected video on bittorrent, people wouldn't be able to play it without the correct password).
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post #15 of 42
I WILL buy some. Cut and dry. Anything more and I think it's too much. $1.99 is too much.
post #16 of 42
Quote:
Originally Posted by Mr. H View Post

DRM isn't a problem. As I said, works with iPlayer just fine. All content on the peer-to-peer network would be encrypted so you'd need a key from the iTunes store to play the file (in exactly the same way that if you put a Fairplay-protected video on bittorrent, people wouldn't be able to play it without the correct password).

I see your point. I think there is something logistical we're missing here, not including politics, but I can't see it so I concede to your point. Plus, I'd really like this to happen.
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post #17 of 42
Quote:
Originally Posted by solipsism View Post

I see your point. I think there is something logistical we're missing here, not including politics, but I can't see it so I concede to your point. Plus, I'd really like this to happen.

There may be something logistical we're missing, but I fear that it may be a politics issue rather than a technical stumbling block.

If TV rental comes to iTunes, I suspect it would be as a flat-rate monthly fee (e.g. $30 a month) which will be great for those who want to consume all their TV via iTunes, but not great for poeple who want access to just one or two series a year (where the "a-la-carte" 20 cent per episode rental would work best).
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post #18 of 42
I wish they would do this with music videos. Better still would be to include the song download with the video download for the same $1.99.
post #19 of 42
I'd rather CBS work on getting all of their shows onto iTunes, or at least The Big Bang Theory, but I'm good with $0.99 pricing too.
post #20 of 42
Quote:
Originally Posted by kozchris View Post

Better still would be to include the song download with the video download for the same $1.99.

Music videos no longer have DRM so if you've got QuickTime Pro you can losslessly extract the audio track (the audio will still be "lossy" in that the original encode was lossy, but you won't further degrade the quality).
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post #21 of 42
The phrase "got it for a song" has more tangible meaning these days.

yuk yuk yuk
post #22 of 42
Quote:
Originally Posted by sippincider View Post



It's been 20 years since any US broadcast network had a show that was worth $1.

Really. Who would want to clog up valuable HD space with this crap anyway?
post #23 of 42
Quote:
Originally Posted by TEKSTUD View Post

Really. Who would want to clog up valuable HD space with this crap anyway?

Rental works better IMO

Quote:
Originally Posted by solipsism View Post

Does Apple take a set fee for a video length at a particular quality?<snip> 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).

Whether or not Apple takes a fee for bandwidth costs - there ARE bandwidth costs to account for.

As for the show - my calculations a few years back were that an ABC station makes about 40c/viewer on the ads it shows during Lost. ABC network probably makes half of that... (but it'd be really good to figure out what the real figures are).

This has 2 consequences
1) assuming the average show has 2 viewers, we're probably looking at less than 80c per rental for the network to make the same money. (But perhaps they need to also support the local ABC channel?)
2) If Apple was to put in 18minutes of ads, EXACTLY like a TV station, and shown on your home TV - then they could earn about 40c/viewer. A $1 show is almost paid for anyway.

Personally I think that instead of 18minutes of Boston advertising aimed at the average "Lost" viewer, if the AppleTV showed 1/4 of the ads customised specifically to me (and even with ads for shops/services in my suburb) then that would be worth the same. But I could be wrong.

Quote:
Originally Posted by Mr. H View Post

There's nothing stopping Apple implementing peer-to-peer technology in iTunes to help reduce serving costs.

That's a good idea. Use it to SUPPLEMENT the main Apple servers, even if it only halves Apple's bandwidth requirements it'll be a success. We already know that an Apple TV file is mostly identical for every user - so just share that piece and get the final authorisation from Apple. If they add P4P technology then sharing will happen between nearby users, reducing ISP bandwidth costs too.

edit: With Content Distribution Networks now, I really don't know how much bandwidth costs. I'm actually surprised Apple hasn't bought a CDN (or made its own)
post #24 of 42
Quote:
Originally Posted by GregAlexander View Post

RAs for the show - my calculations a few years back were that an ABC station makes about 40c/viewer on the ads it shows during Lost. ABC network probably makes half of that... (but it'd be really good to figure out what the real figures are).

This has 2 consequences
1) assuming the average show has 2 viewers, we're probably looking at less than 80c per rental for the network to make the same money. (But perhaps they need to also support the local ABC channel?)
2) If Apple was to put in 18minutes of ads, EXACTLY like a TV station, and shown on your home TV - then they could earn about 40c/viewer. A $1 show is almost paid for anyway.

Personally I think that instead of 18minutes of Boston advertising aimed at the average "Lost" viewer, if the AppleTV showed 1/4 of the ads customised specifically to me (and even with ads for shops/services in my suburb) then that would be worth the same. But I could be wrong.

The local networks are something else we often forget. The more viewers they lose to the internet the less the stations will make yet their costs aren't going down. This could get really bad for cable stations that don't want to pay as much for pay cable if they are losing customers to internet renting methods.

The other interesting thing you brought up was tailored adverts. Google does that for searches, it would be interesting to have a show separated into segments and ads pulled and dynamically stitched in when you rent it, just before being uploaded to your machine. Actually, that sounds like something profitable worth patenting.
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post #25 of 42
Wow, such a deal, considering episodes on Hulu are FREE.

The Internet is the new OTA (Over the Air)... eventually I think broadcast will mostly go away and it will all be bi-directional...
post #26 of 42
Quote:
Originally Posted by libertyforall View Post

Wow, such a deal, considering episodes on Hulu are FREE.

— Wow, such a deal, considering Hulu can't be played on cellphones
— Wow, such a deal, considering Hulu can't be played offline
— Wow, such a deal, considering Hulu doesn't necessarily have shows the next day
— Wow, such a deal, considering Hulu doesn't have any paid-cable shows
— Wow, such a deal, considering Hulu uses a very low bit rate compared to iTunes
— Wow, such a deal, considering Hulu has ads, iTunes doesn't.

I watch many shows via Hulu but that doesn't mean I can't see the benefit of other options.
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post #27 of 42
Quote:
Originally Posted by Mr. H View Post

There's nothing stopping Apple implementing peer-to-peer technology in iTunes to help reduce serving costs.

Distribution/IT cost has nothing to do with it. The cost issue is all about content licensing.
post #28 of 42
Quote:
Originally Posted by libertyforall View Post

Wow, such a deal, considering episodes on Hulu are FREE.

The Internet is the new OTA (Over the Air)... eventually I think broadcast will mostly go away and it will all be bi-directional...

For cheap people, maybe. Some of us would rather pay a little for higher quality, or content without advertisements.
post #29 of 42
Quote:
Originally Posted by stevegmu View Post

Some of us would rather pay a little for higher quality, or content without advertisements.

Ideally we should be able to choose which we'd rather do.
* Buy for $2 (HD)
* Rent for 80c
* watch 18 minutes of ads which we can fast forward over (like a PVR today)
* watch 5 minutes of ads customised just to us
* pay 40c to watch half as many ads.

The other side-effect of ads is that we can start watching immediately - it can show a preloaded ad while it starts to load the TV show. Also it'll work on slightly slower internet connections if it intersperses preloaded ads.

New technology ALLOWS us to have options in how we watch, where OTA broadcast pretty well had to make one size fit all.
post #30 of 42
Quote:
Originally Posted by solipsism View Post

Wow, such a deal, considering Hulu can't be played on cellphones
Wow, such a deal, considering Hulu can't be played offline
Wow, such a deal, considering Hulu doesn't necessarily have shows the next day
Wow, such a deal, considering Hulu doesn't have any paid-cable shows
Wow, such a deal, considering Hulu uses a very low bit rate compared to iTunes
Wow, such a deal, considering Hulu has ads, iTunes doesn't.

I watch many shows via Hulu but that doesn't mean I can't see the benefit of other options.

I pay for cable and TiVo the shows I want. I absolutely love Tivo and it's completely changed the way I watch TV.

I was actually wondering who pays for network TV shows on iTunes. The above are some interesting reasons. I have no interest at all in ever watching Lost on a dinky screen, but I can see someone wanting the mobility. Tivo trumps the other reasons. Of course it depends on how many shows you watch, but it's far cheaper for me to pay for Cable+Tivo than individual shows for $1.

I have built an HTPC, so I should really check out Netflix.
post #31 of 42
Quote:
Originally Posted by min_t View Post

NCIS/Criminal Minds/Mentalist and I'm in like Flint

I think Red John is the CBI boss, Virgil Minelli, played by Gregory Itzin.


Quote:
Originally Posted by os2baba View Post

I pay for cable and TiVo the shows I want. I absolutely love Tivo and it's completely changed the way I watch TV.

I was actually wondering who pays for network TV shows on iTunes. The above are some interesting reasons. I have no interest at all in ever watching Lost on a dinky screen, but I can see someone wanting the mobility. Tivo trumps the other reasons. Of course it depends on how many shows you watch, but it's far cheaper for me to pay for Cable+Tivo than individual shows for $1.

I have built an HTPC, so I should really check out Netflix.

They are all great. They all have pros and cons, but I buy a lot of iTunes Store videos because of the convenience since I'm always traveling. I use Hulu when I can, but it won't work for everything as detailed above. I used to have Netflix streaming but it was taxing on my system and I didn't care for the player or quality, but if you are wanting to watch every show of an older series it's the way to go.
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post #32 of 42
Quote:
Originally Posted by sippincider View Post



It's been 20 years since any US broadcast network had a show that was worth $1.

Can't help myself. To quote a cult film, Robocop.

I'd buy that for a dollar

only I'm in Australia, so it won't be a dollar. Ah well.
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post #33 of 42
Quote:
Originally Posted by Woohoo! View Post

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.

Quote:
Originally Posted by solipsism View Post

Wow, such a deal, considering Hulu can't be played on cellphones
Wow, such a deal, considering Hulu can't be played offline
Wow, such a deal, considering Hulu doesn't necessarily have shows the next day
Wow, such a deal, considering Hulu doesn't have any paid-cable shows
Wow, such a deal, considering Hulu uses a very low bit rate compared to iTunes
Wow, such a deal, considering Hulu has ads, iTunes doesn't.

I watch many shows via Hulu but that doesn't mean I can't see the benefit of other options.

Quote:
Originally Posted by cy_starkman View Post

Can't help myself. To quote a cult film, Robocop.

I'd buy that for a dollar

only I'm in Australia, so it won't be a dollar. Ah well.

i watch free net flix tv shows
free hulu shows
free abc/scfy/cbs/nbc shows

itunes seems old hat
except when i watched every battlestar galactica ever made in HD
wow

and over time storing all these watched shows sucks
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post #34 of 42
I think that $1 per episode is not good enough for me. I just got Fringe season 1 in Best Buy for $9.99. That's 20 episodes, so it is like 50 cents per episode. TV shows are for watching once. I still don't think that paying $1, much less $2, for a TV show is worth it, especially when you can find such great deals on DVD.

Renting TV shows would be better, that brings another question, how much can you charge for it? I think that 29 cents per episode is the best for old seasons and 49 cents for just released shows.

But after all, a subscription plan for unlimited downloads would work the best. Maybe $9-$10 a month with limited commercial and a premium $30 without commercials, with an "own it" option for 49 cent in SD or 99 cents in HD.
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post #35 of 42
Quote:
Originally Posted by Luiso View Post

I think that $1 per episode is not good enough for me. I just got Fringe season 1 in Best Buy for $9.99. That's 20 episodes, so it is like 50 cents per episode. TV shows are for watching once. I still don't think that paying $1, much less $2, for a TV show is worth it, especially when you can find such great deals on DVD.

Renting TV shows would be better, that brings another question, how much can you charge for it? I think that 29 cents per episode is the best for old seasons and 49 cents for just released shows.

But after all, a subscription plan for unlimited downloads would work the best. Maybe $9-$10 a month with limited commercial and a premium $30 without commercials, with an "own it" option for 49 cent in SD or 99 cents in HD.

nice
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post #36 of 42
This is good, but not good enough. I watch maybe 3 shows on a regular basis, and if I could get internet delivery, I'd watch another 3 or 4. If these are 4 times a week, 4 weeks a month, that's $16 a month for each show, or maybe as much as $100 a month. My cable bill is only about $45 a month.

If they bring in the "all you can eat" subscription that's been bandied about, then I'm in.
post #37 of 42
Quote:
Originally Posted by Luiso View Post

Renting TV shows would be better, that brings another question, how much can you charge for it? I think that 29 cents per episode is the best for old seasons and 49 cents for just released shows.

But after all, a subscription plan for unlimited downloads would work the best. Maybe $9-$10 a month with limited commercial and a premium $30 without commercials, with an "own it" option for 49 cent in SD or 99 cents in HD.

Bingo.
post #38 of 42
I don't see how Apple could lower ALL TV Shows to $0.99. They are very conscious of the way media is valued, and how would it look if HD TV Shows, some of which are 44 minutes in length, cost less than a new Taylor Swift single at $1.29 for 3 mins and 256kbps?

Something seems a bit skewed there.

Maybe some unity across the store would remove some of the price-by-value perception.

ie:

New TV Show Episodes: $1.29 (HD or SD) for the first 24 hours after release.

Post-24 hours and Library Titles: $0.69 - $0.99 (HD or SD)

This way it makes a little more sense. Episodes from the 2nd season of Wings can be $0.69, while John Stewart's recent broadcast will float in at $1.29, and become $0.99 the next day.

Sounds like a good way to get a couple extra cents out of the person who wants to see the episode they missed immediately. Everyone else can be patient and save $.30.

Quote:
Originally Posted by Luiso View Post

But after all, a subscription plan for unlimited downloads would work the best. Maybe $9-$10 a month with limited commercial and a premium $30 without commercials, with an "own it" option for 49 cent in SD or 99 cents in HD.

Now this is probably the most brilliant idea yet. Rentals for TV Shows are the way to go, just like it was for movies. The same logic SJ used in that keynote applies here. Your pricing is right on too.
post #39 of 42
I think 50 cents per episode is the sweet spot. Lets hope some of the folks that work for CBS are browsing the appleinsider forums
post #40 of 42
Quote:
Originally Posted by solipsism View Post

Wow, such a deal, considering Hulu can't be played on cellphones
Wow, such a deal, considering Hulu can't be played offline
Wow, such a deal, considering Hulu doesn't necessarily have shows the next day
Wow, such a deal, considering Hulu doesn't have any paid-cable shows
Wow, such a deal, considering Hulu uses a very low bit rate compared to iTunes
Wow, such a deal, considering Hulu has ads, iTunes doesn't.

I watch many shows via Hulu but that doesn't mean I can't see the benefit of other options.

Best. Ever.

Seriously .99 is the sweet spot. This will increase sales of shows for sure, and not to mention will help other media, like music videos, drop in price too. Win for us!
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