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Warner Bros. execs find Apple's 99 cent TV show rentals too cheap

post #1 of 111
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Executives with Warner Bros., producer of numerous primetime network TV shows, believe that Apple's 99 cent prices TV show rentals need to be more expensive.

According to The Associated Press, Barry Meyer, chief executive of Warner Bros., said his company decided to not participate in Apple's proposal for 99 cent TV episode rentals, because they feel the price is too low. Meyer revealed his company's stance this week at an investor conference hosted by Merrill Lynch in California.

"Meyer said the deal was not a good value for the studio subsidiary of Time Warner Inc., which sells permanent downloads shows such as 'Gossip Girl' on iTunes for $2.99 each," the report said.

While Warner Bros. didn't agree to Apple's deal, other networks did join on for the rental service, upon which Apple's new cloud-centric Apple TV will rely. That device, which will sell for $99, will have limited internal storage and will focus on rentals of HD movies for $4.99 and TV shows for 99 cents.

Announced earlier this month, the new rental service has been agreed to by major U.S. networks Fox and ABC.

"We think the rest of the studios will see the light and get on board pretty fast," Apple Chief Executive Steve Jobs said during his keynote address earlier this month.

Before the rentals were announced, reports indicated that major content providers including NBC Universal, CBS Corp. and Time Warner Inc. have all "dug in their heels in opposition" to Apple's plans. TV executives are said to believe that inexpensive episode downloads would break their current economic model.
post #2 of 111
Hi Warner Bros,


As the consumer, I'm not interesting in paying more than $0.99 cents for a TV show. Watching a whole season of your show simply gets too expensive. It's not viable. I could spend my money on a lot of other things that would make more sense (like Netflix).

I'm sure Pepsi would prefer to charge $5.00 for a 2-liter, but the market demands cheaper products. Either figure out how to hit the $0.99 cent price point or don't expect many people to be buying your shows.


Thank you,
Andrew


P.S. If your high price points make people not buy your shows, don't blame it on piracy and go crying to the public. This is your problem, not ours. Pepsi doesn't blame poor sales on store theft, neither should you.
Andrew
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post #3 of 111
Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.
post #4 of 111
Quote:
Originally Posted by AppleInsider View Post

Executives with Warner Bros., producer of numerous primetime network TV shows, believe that Apple's 99 cent prices TV show rentals need to be more expensive.

According to The Associated Press, blah... blah... blah...

I was sort of thinking $.99 was a little high for a TV show rental. You can rent an HD version of Avatar that runs for about 2+ hours for $4.99 but a TV show is generally 20(ish) minutes once you take out the advertisements. The way I see it, we should get to rent TV Shows for $.79 or Free if we take them with advertisements (just a matter of time before the iAd works it's way in - hulu style).
post #5 of 111
Let's see. They're willing to have Amazon SELL the episodes for $1.99 to $2.99 each (mostly $1.99), but they won't rent them for $0.99?

Idiots.
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post #6 of 111
Quote:
Originally Posted by Bregalad View Post

Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.

Completely agree. I'm paying $1 a day for DISH, and this idiot wants me to pay $3 for one episode of one show?!?!?!?! By far one of the more absurd things I have ever heard.
post #7 of 111
Television executives are eager to rush down the path pioneered by music industry executives, where they try to stubbornly cling to their old models while the profitability of their industry collapses around their ears.

They're modeling what "should" be the ROI for their hideous product on what they used to be able to get. The reality is that fewer and fewer are watching network television, and once you lose a generation the game's pretty much over. You can pick up some ancillary bucks by moving deck chairs on the Titanic and trying to "monetize" whatever convoluted scheme you've come up with to manage distribution to other platforms, but by putting all kinds of barriers in the way of allowing people to watch what they want, when they want, on the device they want, you're simply hastening the demise of your enterprise.

They think Gossip Girl is precious enough to extract a usurious toll. Hilarious.
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post #8 of 111
Quote:
Originally Posted by AppleInsider View Post

Before the rentals were announced, reports indicated that major content providers including NBC Universal, CBS Corp. and Time Warner Inc. have all "dug in their heels in opposition" to Apple's plans. TV executives are said to believe that inexpensive episode downloads would break their current economic model.

Internet streaming will break down the current economic model. What they should be doing if accepting that fact and figuring out how to make money under the new ecomomic conditions that will be present in a couple years. They can do a lot worse than $0.99 an episode.
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post #9 of 111
Hows about we just start the old-fashioned boycott? Vote with our wallets and let WB find out what WE think the prices should be…

Of course, I don't watch any of that stuff so I'm already on board.
post #10 of 111
Quote:
Originally Posted by hittrj01 View Post

Completely agree. I'm paying $1 a day for DISH, and this idiot wants me to pay $3 for one episode of one show?!?!?!?! By far one of the more absurd things I have ever heard.

and you know what, the Neilson rating service already gave them(WB) the info they needed and that was piped over to the advertisers. So the money for those shows have already been made. So dang give up the show for 99 cent rental. hell what are they going to loose? Nothing.
And when those show get re-ran on tv there will be more advertiser money piped into their coffers.
post #11 of 111
Mr. Executive, meet the market. In fact, 99 cents is probably too high but stick to your guns, lose money, and do some power point presentations showing how your company's losses were not your fault. After all, you have your golden parachute under the desk so it's all good.
post #12 of 111
Quote:
Originally Posted by Bregalad View Post

Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.

Between me and my girl we watch...7 shows. At 24 episodes a season that's 168 bucks/season!!! And that doesn't include the BS channels you get with Dish.

If Apple or anyone else wants a model like this to work they need to charge something like 4.99 a season! Anything more and it really doesn't pay to switch from my $70 Dish plan. $24/season is just way too much.
post #13 of 111
I could swear it wasnt too long ago that posters were saying Apple was changing too much for their TV Show rentals. It should be clear now that Apple is not whole responsible for the lack of networks and price for digital downloads.

What I would have liked to have happened is what you see on Hulu. Ads within these FairPlay encrypted files. Ads that cant be fast-forwarded through, unless the file already tags it as watched. I also wouldnt have minded if these ads were targeted which means the pieces of the TV Show you DL from iTunes Store would grab your demographic and other data and stitch the pieces with the most appropriate ads, with the FairPlay wrapper for your account added and then sent to you. This can be done almost instantly on the server. If that were to happen, I also wouldnt have minded some minimal cost, like 25¢, since these would offer something the other mediums cant compete with: being able to be stored on an iDevice remotely and offline. I think this would have no only boosted ad revenue but also kept from hindering physical media sales and potentially even increased it.


Quote:
Originally Posted by Bregalad View Post

Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.

Dont forget that these are also supplemented by other costs, and that digital downloads from the iTunes Store have features that cant be matched by your cable provider.


Quote:
Originally Posted by hittrj01 View Post

Completely agree. I'm paying $1 a day for DISH, and this idiot wants me to pay $3 for one episode of one show?!?!?!?! By far one of the more absurd things I have ever heard.

99¢ for an HD rental or 2x as much for an SD purchase, or 3x as much for an HD purchase. I cant imagine multiple viewing is very common so they would be getting 2x to 3x as much per show. And of those that are willing to re-watch a show multiple times, I would think they are much more likely to buy the physical media with even better quality and features once it comes out, so that is a mute point.

So that leaves volume to make up the difference. If there accountants dont see a 2x or 3x increase (or whatever the average is between them) over the digital download TV show purchase model then they are losing profit.

Note that Rupert Murdoch reportedly wasnt too keen on the deal either, but did it to curry favour with Jobs and Apple for future negotiations.
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post #14 of 111
So you can rent a TV series from Blockbuster 1 disc at a time. Each disc holds about 4 episodes. So each episode is valued at 99 cents in that model. How is Apple's different?

Let's not forget some discs have about 8 episodes on them, which means the value is half that.
post #15 of 111
Quote:
Originally Posted by jsmythe00 View Post

Between me and my girl we watch...7 shows. At 24 episodes a season that's 168 bucks/season!!! And that doesn't include the BS channels you get with Dish.

If Apple or anyone else wants a model like this to work they need to charge something like 4.99 a season! Anything more and it really doesn't pay to switch from my $70 Dish plan. $24/season is just way too much.

So... $168 a year is too much? Most people pay $700 a year for cable... just sayin...
post #16 of 111
http://www.youtube.com/watch?v=gBzJGckMYO4

Couldn't have said it better.
post #17 of 111
Quote:
Originally Posted by maccherry View Post

and you know what, the Neilson rating service already gave them(WB) the info they needed and that was piped over to the advertisers. So the money for those shows have already been made. So dang give up the show for 99 cent rental. hell what are they going to loose? Nothing.
And when those show get re-ran on tv there will be more advertiser money piped into their coffers.

The amount of money they get for a rental is probably still more than they would get for three people watching over the air.

Quote:
Originally Posted by jsmythe00 View Post

Between me and my girl we watch...7 shows. At 24 episodes a season that's 168 bucks/season!!! And that doesn't include the BS channels you get with Dish.

If Apple or anyone else wants a model like this to work they need to charge something like 4.99 a season! Anything more and it really doesn't pay to switch from my $70 Dish plan. $24/season is just way too much.

Don't forget the ads. Sure, it's less money out of pocket, but with cable/sat, how you really pay is not to Dish or Comcast, but being the eyeballs for advertisers on the channels.
post #18 of 111
Warner Brothers doesn't want to rent TV shows for .99 through iTunes but they're willing to rent their big budget feature films through Red Box for .99! Hypocrites.
post #19 of 111
WB, I don't know about your current "economic model", but I don't think you're getting anywhere near $1 per show from me right now, as it stands.

Commericials? $1 per show per viewer? hmmm.... Seeing as I record most of the shows I watch and never see the commercials, if you are getting that much then maybe it's the advertisers whose economic model needs tweeking.

From my cable provider? Not hardly.

So you're going to pass up $1 per show of nearly pure profit? Best of luck.
post #20 of 111
Well, if they don't like .99 cent movies, they aren't going to get my money, because I refuse to pay more than that. Those networks make way too much money as it is. They are going to have to start charging less, or people are going to continue to pirate.

Pirating happens, because the product offered is too expensive. We want to pay for their product, but right now it's way overpriced. It's time these fat cats, stock holders, and board members start making less money. They've been gouging for too long already, and it's simply not right.
post #21 of 111
Have they really done the math? ... sure they will not make as much per show when someone rents it but don't they think that a lot more people will jump at rent the show or renting a season to more than make up for the loss of show sales?

... they can always change their mind after they see what happens with Disney shows, etc. and I rather suspect that they will.

The only shows that I've purchased are those that my kids get repeat viewings out of ... my wife and I couldn't imagine having the time or interest in watching a tv episode more than once.
post #22 of 111
Quote:
Originally Posted by jsmythe00 View Post

Between me and my girl we watch...7 shows. At 24 episodes a season that's 168 bucks/season!!! And that doesn't include the BS channels you get with Dish.

If Apple or anyone else wants a model like this to work they need to charge something like 4.99 a season! Anything more and it really doesn't pay to switch from my $70 Dish plan. $24/season is just way too much.

$168 for 24 episodes of 7 different shows? That seems fairly reasonable. That's 6 months of entertainment for you and your girl, isn't it?

Just think how quickly the average consumer spends $168 in unnecessary gas, coffee and junk food? Cut back on that stuff a little and accept a reasonable price for TV shows.
post #23 of 111
So rather than collect 99 cents from people (for a program that is already bought and paid for in full by studios) you would rather accept nothing from those same people?

There's a great business model.

Oh, and I'm taking my fooball and going home!
post #24 of 111
At $1.99 or $2.99 per episode, I have purchased exactly ZERO TV shows off of iTunes. No dollars from me.

Now, at $.99, I may consider buying a show or two when I want to watch something. Heck, I'd probably end up spending $5-10 per month, and I rarely watch TV. So, at the lower price, you get a lot more sales. And since every sale is essentially profit, you see a huge increase that way.
post #25 of 111
Quote:
Originally Posted by coolfactor View Post

$168 for 24 episodes of 7 different shows? That seems fairly reasonable. That's 6 months of entertainment for you and your girl, isn't it?

Just think how quickly the average consumer spends $168 in unnecessary gas, coffee and junk food? Cut back on that stuff a little and accept a reasonable price for TV shows.

I hear you but we already get those 7 shows now...for $70 via Dish. What we're want/hope is to get those shows and only those shows for say....$30-$40. If Apple TV can get that to us, that'll just be one more Apple product in a long list of Apple products in our house.

Also, in one extreme case we even wait a year to see Dexter on Netflix vs paying the $11 to watch it on showtime.
post #26 of 111
Quote:
Originally Posted by jsmythe00 View Post

I hear you but we already get those 7 shows now...for $70 via Dish. What we're want/hope is to get those shows and only those shows for say....$30-$40. If Apple TV can get that to us, that'll just be one more Apple product in a long list of Apple products in our house.

Also, in one extreme case we even wait a year to see Dexter on Netflix vs paying the $11 to watch it on showtime.

That is only 4 or 5 episodes per show for $70 via Dish... right now, you are paying about $2 per episode...

Apple's model will cut your bill in half.
post #27 of 111
People,

This issue is pretty complex with a lot of players with eventual harm to a lot of business models. This isn’t about simply ignoring a new revenue stream with no negative impact on other revenue streams.

And why the defense of Cable and Satellite as a means of “saving money” on TV Show viewing when Netflix, Hulu are considerably cheap, and even free for regular Hulu? That makes no sense, unless you are purposely ignoring the cons of the cable and satellite while ignoring the pros of non-Cable TV or Satellite based media.


Quote:
Originally Posted by jsmythe00 View Post

I hear you but we already get those 7 shows now...for $70 via Dish. What we're want/hope is to get those shows and only those shows for say....$30-$40. If Apple TV can get that to us, that'll just be one more Apple product in a long list of Apple products in our house.

Also, in one extreme case we even wait a year to see Dexter on Netflix vs paying the $11 to watch it on showtime.

Isn’t that only a $2 month saving for Dexter? Though you can just fly through the season quickly on Netflix, are the saving so great that make it worth waiting a year? Personally, that is one (of many) shows I like to watch immediately.
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post #28 of 111
Idiots...

How much do they get from the ads when I watch it for free on Hulu?

How much does Netflix pay them when I watch it on a DVD or via their online options?

How much do they get in ads when I watch it for free over the air?

Even with cable fees plus ads, how much do they earn per episode?

What's their cut if I rent it from Blockbuser or Red Box?

I'd bet not a single one of these alternate sources gets them 70 cents per episode (99 cents minus Apple's 30% cut). And then there is the incremental income they are losing from people who simply wouldn't watch it at all if they missed it on TV, but who might pay the 99 cents to get it from iTunes to watch on their iPhone or iPad.

What they are really afraid of is loss of control and influence. If they can't insert ads or control the distribution, then they can't tell you about all their other crap they want you to watch. What percentage of ads aren't even for products, but for other TV shows? Ever wonder why you have 5 weather channels, all those shopping channels, and those dozens and dozens of other channels nobody ever watches? It's because those channels are owned by the big networks. And they tell the cable provider, "I won't let you carry CBS unless you also carry the CBS weather channel, etc, etc."

So it's not about how much an episode is worth. It's about wanting to be financially compensated for the threat it represents to their overall empire. It's nothing but a giant welfare program to prop up all their other crap that nobody would otherwise pay money to view.
post #29 of 111
I have considered a mac mini, or even an apple TV for a "media extender on my projector, but unfortunatelly the apple TV is going towards renting, which I don't do much of.

I wouldn't even consider renting a TV show on a device I had to pay for(apple TV) unless it was down below $0.50. $5 to rent a movie, that is rediculous too. I will stick with my local red Box for $2 blu ray rentals...and I'll continue to acquire my tv shows elsewhere. Lets just say friends I have never met record for me what I missed and I download from them.
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post #30 of 111
They have really lost the plot

Many people these days can record TV shows to their PVR and then archive to DVD, all for free. Well we can in the UK at least

Considering they are competing with that and torrents they would be doing very well to get 99c a rental

Personally I don't see torrenting of tv shows in the same light as films and music, it's lke a form of timeshifting. Not that I do it, tv doesn't interest me that much
post #31 of 111
FU WB: Your shows suck anyway.

When you have the balls and vision to put out something as good as "The Sopranos", "Entourage", "The Wire", or "Boardwalk Empire," then maybe I'll support your farcical company, which relies on pumping out crappy remakes of movies that were crappy to begin with.
post #32 of 111
Quote:
Originally Posted by Bregalad View Post

Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.

They don't. They want you to watch it on cable and pay $2.99 for an episode every once in a while.

I understand Warner Brothers' reason for keeping the single-episode pricing high, which is to protect the licensing fees they get from the networks that broadcast their shows and the retransmission fees they get from the local cable carriers that carry their networks.

The reason the networks have pushed back so hard against an iTunes/Netflix/Amazon/whatever subscription plan is that they've got a good racket going with the way things work now and don't want to disrupt that by giving people a reason to drop their cable.

What I don't understand is why they think it's going to work for very much longer. I think the push-back against cable is going to accelerate as Netflix Watch Instantly and similar services start to take hold. People want to watch current shows, but they've got so many more choices now than they did five years ago that it's not hard to pass on a new show when you know you can pick it up on DVD or watch it on Amazon VOD later.
post #33 of 111
Quote:
Originally Posted by macinthe408 View Post

FU WB: Your shows suck anyway.

When you have the balls and vision to put out something as good as "The Sopranos", "Entourage", "The Wire", or "Boardwalk Empire," then maybe I'll support your farcical company, which relies on pumping out crappy remakes of movies that were crappy to begin with.

Warner Brothers produced or is currently producing all of those shows through its HBO unit. Try again.
post #34 of 111
To paraphrase Arnie ... "They'll be back'"
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post #35 of 111
Quote:
Originally Posted by Porchland View Post

They don't. They want you to watch it on cable and pay $2.99 for an episode every once in a while.

I understand Warner Brothers' reason for keeping the single-episode pricing high, which is to protect the licensing fees they get from the networks that broadcast their shows and the retransmission fees they get from the local cable carriers that carry their networks.

The reason the networks have pushed back so hard against an iTunes/Netflix/Amazon/whatever subscription plan is that they've got a good racket going with the way things work now and don't want to disrupt that by giving people a reason to drop their cable.

Well, too late in my case. I dropped mine 6 months ago and could not be happier. I bet a lot more are going to join me soon.
post #36 of 111
I know what Netflix has to offer.

Anyone know if it ever will be possible for Redbox to offer their wares for the AppleTV anytime soon @ .99?
post #37 of 111
I have already pre-ordered my AppleTV and intend to rent a few more shows than I might have just to help ensure that it's a big success, but mostly to spite Warner Bros. and other short sighted greedsters.

It'd be great if iTMS was a huge success and WB had to come begging to Steve, and he could extract painful concessions!

I guy can dream, can't he?
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post #38 of 111
I have yet to see anything on the WB network I would be willing to pay for. I think most TV shows are garbage and I think TV networks should have to pay us to watch their trash.
post #39 of 111
I don't understand why they don't put the stuff on itunes as a rental for free as it appears on TV - (commercials and all) and just make it so you can't fast forward through commercials. They can charge more for the embedded commercials from advertisers because they are permanent and the user must watch - instead of change the channel or FF on DVR. Even if these were $.50 each I'm sure they'd still be more profitable than OTA.

Most people forget these networks started as solely OTA, with their only profits being advertising. Now that the cable companies pay them they think its a right that we all pay them for content too. We are the product they are selling. Not the other way around. Without us watching to sell advertising space they have nothing.
post #40 of 111
Quote:
Originally Posted by jsmythe00 View Post

I hear you but we already get those 7 shows now...for $70 via Dish. What we're want/hope is to get those shows and only those shows for say....$30-$40. If Apple TV can get that to us, that'll just be one more Apple product in a long list of Apple products in our house.

Also, in one extreme case we even wait a year to see Dexter on Netflix vs paying the $11 to watch it on showtime.

But you do understand, don't you, that you would be renting in lieu of Dish, not in addition to it?
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