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

Posted:
in iPod + iTunes + AppleTV edited January 2014
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.
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Comments

  • Reply 1 of 109
    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.
  • Reply 2 of 109
    Full package digital cable costs $2/day. If WB truly expects me to pay that much for a single episode they're nuts.
  • Reply 3 of 109
    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).
  • Reply 4 of 109
    jragostajragosta Posts: 10,473member
    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.
  • Reply 5 of 109
    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.
  • Reply 6 of 109
    addaboxaddabox Posts: 12,660member
    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.
  • Reply 7 of 109
    cmf2cmf2 Posts: 1,427member
    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.
  • Reply 8 of 109
    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.
  • Reply 9 of 109
    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.
  • Reply 10 of 109
    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.
  • Reply 11 of 109
    solipsismsolipsism Posts: 25,726member
    I could swear it wasn?t 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 can?t be fast-forwarded through, unless the file already tags it as watched. I also wouldn?t 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 wouldn?t have minded some minimal cost, like 25¢, since these would offer something the other mediums can?t 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.



    Don?t forget that these are also supplemented by other costs, and that digital downloads from the iTunes Store have features that can?t 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 can?t 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 don?t 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 wasn?t too keen on the deal either, but did it to curry favour with Jobs and Apple for future negotiations.
  • Reply 12 of 109
    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.
  • Reply 13 of 109
    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...
  • Reply 14 of 109
    http://www.youtube.com/watch?v=gBzJGckMYO4



    Couldn't have said it better.
  • Reply 15 of 109
    jeffdmjeffdm Posts: 12,949member
    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.
  • Reply 16 of 109
    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.
  • Reply 17 of 109
    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.
  • Reply 18 of 109
    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.
  • Reply 19 of 109
    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.
  • Reply 20 of 109
    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.
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