Television and movie studios just don't get it. People pirate content because they do not provide a viable and realistic alternative. This does not specifically deal with the NBC story, but has anyone seen the DVDs containing a digital copy on the disc? I initially thought this was a good idea because I purchase a good number of DVDs and it would save me time if I did not have to rip the movie to put it on my Apple TV. I can't really say I was shocked, but the first time I saw one of these DVDs in the store, I noticed the there were two versions of the dvd. One with the digital copy and one without. The DVD containing the digital version was a good $4 more. Someone tell me why I would pay more for a DVD just to get the digital copy, when I can buy the other one and rip the movie myself (which gives me control over the quality)?
The TV shows are already priced higher than I am willing to spend, in all but a few cases. Except for shows like The Office that I want to watch multiple times, paying $1.99 or $3.99 for a show I'm not likely to watch more than once is not ok with me. For $.99, I would do more. Worthless to me if they come back at higher prices like they want to.
But if they convinced Steve to limit my Handbrake'd files, then I'm going to have a problem. Well, I'll live just fine without. But Apple will have limited to buying a Nano every few years instead of the cash cow I am at present for them, trying to keep up with with video-friendly devices as they keep expanding their screen, quality & features.
Sure, it's possible, but it would also block legal content such as legal material released without DRM and the user's own home movies. Obviously, that would be completely unacceptable to everyone.
Yes, and this is (apparently) what the idiots at NBC consider a good idea.
Just want to point out that this is not a new idea. Sony actually implements something like this in some of their DVD players. The player will not play a DVD that has NO region coding--which effectively prevents consumers from playing their own homemade wedding DVDs or other home movies. (Most consumers aren't savvy enough to encode their DVDs with region codes to get around this problem; most don't even know that this will be a problem on their Sony DVD player.)
Seriously, these fool execs at NBC, Sony, and other heavy-DRM-lovin' companies are leading their companies off a cliff with this kind of anti-consumer thinking.
Wasn't there a similar commotion after Steves open letter about dropping DRM ? ie studios say "that will never happen" ,"are you mad?" etc. and then Amazon opened
Actually apple started releasing tracks without DRM before amazon got into the business, right?
Quote:
Originally Posted by cwoloszynski
It would be pretty easy; the owner of the video could submit a request to block a video (from bit torrent or where ever) and iTunes could serve up an MD5 (or equivalent fingerprint) of the video to block.
That would be a start, but it would be extremely easy to do something to change the MD5 file. Converting codecs would definitely do it, but so would something as simple as editing a fraction of a second of content from the end.
They could try watermarking, but I don't know if there's much that is robust enough to make it through conversions but still remain invisible to the viewer.
Just want to point out that this is not a new idea. Sony actually implements something like this in some of their DVD players. The player will not play a DVD that has NO region coding--which effectively prevents consumers from playing their own homemade wedding DVDs or other home movies. (Most consumers aren't savvy enough to encode their DVDs with region codes to get around this problem; most don't even know that this will be a problem on their Sony DVD player.)
Have you personally encountered this? I tried looking it up, for the most part, it looks like people tried to play a PAL disc in an NTSC player.
Have you personally encountered this? I tried looking it up, for the most part, it looks like people tried to play a PAL disc in an NTSC player.
Helll, I've PURCHASED DVD's from Discovery Channel and others, that don't work on my brand new DVD player, and when I read the owners manual, it mentioned there were several coded DVD's that would not work with this player. In this case, this information, or the owners manual should be on the outside of the box.
If it matters, Sear's would not allow me to return the player, after I had used it (6 - 8 times) and became aware of this issue
Helll, I've PURCHASED DVD's from Discovery Channel and others, that don't work on my brand new DVD player, and when I read the owners manual, it mentioned there were several coded DVD's that would not work with this player. In this case, this information, or the owners manual should be on the outside of the box.
If it matters, Sear's would not allow me to return the player, after I had used it (6 - 8 times) and became aware of this issue
I'd raise a bigger fuss about that, I would consider it a flawed player if it won't play legit region 0 DVDs.
I'd raise a bigger fuss about that, I would consider it a flawed player if it won't play legit region 0 DVDs.
Actually JeffDM, this is not true. Region 0 tells the player that this is a ripped DVD, and it might not play. Some, not all DVD players check for region 0. I use MTR (the good version) and tell it to encode for all regions.
Actually JeffDM, this is not true. Region 0 tells the player that this is a ripped DVD, and it might not play. Some, not all DVD players check for region 0. I use MTR (the good version) and tell it to encode for all regions.
Region 0 does not mean it's definitely a ripped DVD. I have legit, non-bootleg pressed region 0 DVDs. They do exist, even if they're somewhat rare. I've personally not seen a DVD player that won't play region 0 DVDs. Until now, I hadn't even heard of a player that refused to play them.
I'm not sure what it means for home movies either. I've found comments that consumer writers can't or at least generally don't set a region code
Region 0 does not mean it's definitely a ripped DVD. I have legit, non-bootleg pressed region 0 DVDs. They do exist, even if they're somewhat rare. I've personally not seen a DVD player that won't play region 0 DVDs. Until now, I hadn't even heard of a player that refused to play them.
I'm not sure what it means for home movies either. I've found comments that consumer writers can't or at least generally don't set a region code
Could be, however I have also heard that some DVD players will not play a Region 0. I have never experienced this, but while in Kuwait, when I purchased my DVD player, the salesman specifically mentioned that my Sony player would even play Region 0 dvd's.
So how are they going to determine whether it's legitimate content or not?
Well, you know how the content industry thinks. They'll say that anything without DRM on it must be pirated. I mean, why would someone give away music or movies? Especially without adding something so they can charge a nickel or dime each time you want to use it on some hot new portable media device down the road?
Apple should go out and rally round NBC's competition and give them amazing deals that they just can't refuse then flood the iTunes marketplace with this content and watch as NBC struggles to make any money whatsoever with their own online content.
Then, when NBC are practically down and out with their online content sign them up to a long term deal where they are totally getting screwed on price but have no option but to sign up.
Aside from the encryption issue, BluRay players seem to need to be updated regularly to keep up with the changes for the new movies. Every time they find out someone has broken the key, they change something. I'm not planning to buy BluRay until they sort this out. The BluRay players are special purpose computers that need regular updating via the net. Just what you need!
I've heard rumors about this being possible. Have they actually released any BD movies that won't play on a first-generation player without a firmware update?
I'm not talking about bonus materials (which may require a player supporting Blu-Ray 1.1 or 2.0), but the movie content itself.
Quote:
Originally Posted by JeffDM
Where's the license agreement for CDs that allows people to convert their music into a different format? I doubt Apple would distribute iTunes with CD ripping, tagging and album art feature if it were even the slightest bit gray. If it weren't for the DMCA (in the US anyway), the same would probably be true of movies too.
There is no "license agreement". CDs are covered by US copyright law - Title 17 of the US Code. All the laws for "phonorecords" apply to CDs as well as legacy formats (like vinyl and tape).
The right to rip tracks is a gray area. The law does not give explicit permission, but does permit something called "fair use", which different lawyers interpret in different ways. The RIAA says that backups, mixed CDs and ripping are not considered fair use. Most others disagree with the RIAA. So far, no case requiring a decision has gone to court, so we really don't have a solid decision about this.
And you're right, regarding the DMCA. Movies would normally also count as phonorecords in this regard, including all your fair use rights (whatever they may be). The DMCA, however, makes it a crime to break any DRM scheme, effectively nullifying your fair use rights for anything that is DRM-wrapped (which is most digital media other than CDs.)
Quote:
Originally Posted by aresee
Audio Home Recording Act of 1992
AHRA grants users the right to make copies, but the language is not that explicit. AHRA's text implies that this would only be permitted if the copies are made using devices that implement SCMS copy protection. But the language isn't 100% clear in that direction either.
Again, no court has ruled about this, so we don't know for certain.
Well, you know how the content industry thinks. They'll say that anything without DRM on it must be pirated. I mean, why would someone give away music or movies? Especially without adding something so they can charge a nickel or dime each time you want to use it on some hot new portable media device down the road?
Yeah. Even your home movies should be DRM-crippled and region-coded.
Yeah. Even your home movies should be DRM-crippled and region-coded.
What?! Home movies? You mean that there are creative people outside of Hollywood? Can't be! only Hollywood can be creative. See, it says so right here in my studio manual. /sarcasm
The networks want more money, not the same - and they probably don't really understand that holding onto their current systems is leading to less money (as users increasingly skip ads or download).
Although Apple is trying to create a viable economic model for TV programs, after the reactions of the networks I'd be surprised if Steve wasn't wondering whether they should just let iTunes (and iPods and AppleTV) take any and all formats available without negotiations and just focus on selling hardware -ie: record FTA (with ad skipping) and play any avi's.
Apple is not the problem, it's a solution to the problem.
I've got the first three seasons of BSG sitting on my entertainment computer (Mac Mini). They are legit and were purchased as season passes from the iTMS. I've downloaded every episode of Season 4 from Channel BT. I want to watch the content on my new Sony Bravia 50" TV and I honestly don't care how I have to acquire the content so that I can do that.
I prefer to do it legally through the iTMS or Amazon but when the only way the content is available is as a crappy stream full of repeat ads that I have to watch on the computer then NBC is going to lose out on my money.
The major record labels talked about this for music, and it was assumed they were thinking that ripping CDs is a crime. That being said, there are tons of indie labels, or unsigned bands that LOVE people listening to their music and want nothing more. This is a TV stations though, so what is their thinking? P2P? Ripped DVDs?
There is some major irony that NBC wants to gum up the works of people that legitimately want to buy content just to try to ruin the day of pirates. There are a lot of people that are willing to pay a fair fee for content as long as 1) it exists and 2) is easy to handle. I really believe that. I knew people that dropped cable for iTunes TV shows and said it was a lot cheaper. The money goes straight to the network (and Apple) as opposed to going to Comcast and hopefully advertisers who will keep buying ads.
Think about it this way, iTunes (for music) existed how long before there was a music store? iTunes came out a few years after many other decent Mac MP3 players. It's the Labels/studios fault that they were literally years behind the curve on offering digital content to people. The only thing that kept me from ripping all my CDs and records back in the 90s was HDD space. If storage cost what it does today, i would have digitized everything i own at least 10 years ago. Like many of my friends, i would have taken the original CD cases and put them in plastic storage bins and shuffled them away into a dark corner, or basement. I know one day i will want to re-rip them as AIFF or lossless or something, so i would not purge the originals. I honestly can not tell you the last time i listened to a physical CD at home or in a car. As soon as i get a CD i rip it to my computer. I don't even own a standalone CD player, and have not for a few years.
It makes me wonder how iTunes would know a file is an episode of Lost pulled off P2P networks, as opposed to a home movie, student film, short film, etc? There are so many student films, band videos, short films etc that would love to have people carry around their work. You don't make student films, or shorts, for massive profits. You make it to show what you can do and hopefully turn that into a bigger project in the future. I know a TON of people that post their work on youtube because it's easy, not because it's (sorta) protected from download. They would definitely click a checkbox to let people download their content for an iPod/Zune/PSP/whatever. I understand youtube embeds it to get ad views, and that's how they hope to pay for bandwidth. It's fine. That's their business model, but i don't think the DRM is why most stuff is up there.
There is some major irony that NBC wants to gum up the works of people that legitimately want to buy content just to try to ruin the day of pirates. There are a lot of people that are willing to pay a fair fee for content as long as 1) it exists and 2) is easy to handle.
All true. The issue is really the corporate mindset.
With broadcast TV, you (the viewer) are not their customer. The shows are paid for by advertisers. The studios therefore do what it takes to maximize advertising dollars, without regard to what consumers want. When shows are purchased commercial-free (like on DVD, or an iTunes download), then the viewer is the customer. Viewers have a very different set of requirements, and the studios don't (yet?) know how to handle the difference.
Hence the reason NBC likes Hulu - it matches their broadcast model. The show is streamed "for free", with non-skipable advertisements.
This is also why they don't mind VCRs too much - you tend to see ads as you're fast-forwarding past them. but why they don't like PVRs - where commercials are often skipped over altogether.
Although show popularity does affect ad revenue indirectly (high Nielsen ratings allow them to demand higher payments for commercial time-slots), it is indirect. A show that is popular during a time of year when the industry isn't negotiating new rates won't command more money. And a show that has bad ratings during this time won't cause them to lose money.
The same phenomenon applies to DVD sales. If a TV show is sold in a whole-season box set, then they see money if the season as a whole is good enough to command sales. If there are some bad episodes (even a lot), it doesn't matter, because the others will pull-through the revenue.
Which is where we get to iTunes. Over here, there is NO ad revenue. All the profits come from the individual downloads. Every show must be good enough to command downloads, because they won't get paid otherwise. If there's a bad episode, word will get around quickly and there won't be a lot of downloads. And if there's a good episode, word will also get around, and there will be a lot more downloads (although the studios don't seem to have figured out this last bit.) They feel a need to try and guarantee a steady stream of income, similar to what they get from broadcasts, which means charging a high price overall, so the bad episodes will pull through an expected amount of revenue.
This model, of course, doesn't work with a per-episode download service like iTunes, but studio executives have 60 years of broadcast experience and no download experience. They're probably not going to wise-up until they are shocked into the 21st century by a money-maker that violates their perceived model. A show that doesn't make much on broadcast but makes a tremendous amount via download (much like some shows have already done on DVD.)
Comments
But if they convinced Steve to limit my Handbrake'd files, then I'm going to have a problem. Well, I'll live just fine without. But Apple will have limited to buying a Nano every few years instead of the cash cow I am at present for them, trying to keep up with with video-friendly devices as they keep expanding their screen, quality & features.
Sure, it's possible, but it would also block legal content such as legal material released without DRM and the user's own home movies. Obviously, that would be completely unacceptable to everyone.
Yes, and this is (apparently) what the idiots at NBC consider a good idea.
Just want to point out that this is not a new idea. Sony actually implements something like this in some of their DVD players. The player will not play a DVD that has NO region coding--which effectively prevents consumers from playing their own homemade wedding DVDs or other home movies. (Most consumers aren't savvy enough to encode their DVDs with region codes to get around this problem; most don't even know that this will be a problem on their Sony DVD player.)
Seriously, these fool execs at NBC, Sony, and other heavy-DRM-lovin' companies are leading their companies off a cliff with this kind of anti-consumer thinking.
Wasn't there a similar commotion after Steves open letter about dropping DRM ?
Actually apple started releasing tracks without DRM before amazon got into the business, right?
It would be pretty easy; the owner of the video could submit a request to block a video (from bit torrent or where ever) and iTunes could serve up an MD5 (or equivalent fingerprint) of the video to block.
That would be a start, but it would be extremely easy to do something to change the MD5 file. Converting codecs would definitely do it, but so would something as simple as editing a fraction of a second of content from the end.
They could try watermarking, but I don't know if there's much that is robust enough to make it through conversions but still remain invisible to the viewer.
Just want to point out that this is not a new idea. Sony actually implements something like this in some of their DVD players. The player will not play a DVD that has NO region coding--which effectively prevents consumers from playing their own homemade wedding DVDs or other home movies. (Most consumers aren't savvy enough to encode their DVDs with region codes to get around this problem; most don't even know that this will be a problem on their Sony DVD player.)
Have you personally encountered this? I tried looking it up, for the most part, it looks like people tried to play a PAL disc in an NTSC player.
Have you personally encountered this? I tried looking it up, for the most part, it looks like people tried to play a PAL disc in an NTSC player.
Helll, I've PURCHASED DVD's from Discovery Channel and others, that don't work on my brand new DVD player, and when I read the owners manual, it mentioned there were several coded DVD's that would not work with this player. In this case, this information, or the owners manual should be on the outside of the box.
If it matters, Sear's would not allow me to return the player, after I had used it (6 - 8 times) and became aware of this issue
Skip
Helll, I've PURCHASED DVD's from Discovery Channel and others, that don't work on my brand new DVD player, and when I read the owners manual, it mentioned there were several coded DVD's that would not work with this player. In this case, this information, or the owners manual should be on the outside of the box.
If it matters, Sear's would not allow me to return the player, after I had used it (6 - 8 times) and became aware of this issue
I'd raise a bigger fuss about that, I would consider it a flawed player if it won't play legit region 0 DVDs.
I'd raise a bigger fuss about that, I would consider it a flawed player if it won't play legit region 0 DVDs.
Actually JeffDM, this is not true. Region 0 tells the player that this is a ripped DVD, and it might not play. Some, not all DVD players check for region 0. I use MTR (the good version) and tell it to encode for all regions.
Actually JeffDM, this is not true. Region 0 tells the player that this is a ripped DVD, and it might not play. Some, not all DVD players check for region 0. I use MTR (the good version) and tell it to encode for all regions.
Region 0 does not mean it's definitely a ripped DVD. I have legit, non-bootleg pressed region 0 DVDs. They do exist, even if they're somewhat rare. I've personally not seen a DVD player that won't play region 0 DVDs. Until now, I hadn't even heard of a player that refused to play them.
I'm not sure what it means for home movies either. I've found comments that consumer writers can't or at least generally don't set a region code
Region 0 does not mean it's definitely a ripped DVD. I have legit, non-bootleg pressed region 0 DVDs. They do exist, even if they're somewhat rare. I've personally not seen a DVD player that won't play region 0 DVDs. Until now, I hadn't even heard of a player that refused to play them.
I'm not sure what it means for home movies either. I've found comments that consumer writers can't or at least generally don't set a region code
Could be, however I have also heard that some DVD players will not play a Region 0. I have never experienced this, but while in Kuwait, when I purchased my DVD player, the salesman specifically mentioned that my Sony player would even play Region 0 dvd's.
I'd raise a bigger fuss about that, I would consider it a flawed player if it won't play legit region 0 DVDs.
Amen to that. It's a defective unit, you should contact your credit card company and see about disputing the charges as well as the BBB.
So how are they going to determine whether it's legitimate content or not?
Well, you know how the content industry thinks. They'll say that anything without DRM on it must be pirated. I mean, why would someone give away music or movies? Especially without adding something so they can charge a nickel or dime each time you want to use it on some hot new portable media device down the road?
Then, when NBC are practically down and out with their online content sign them up to a long term deal where they are totally getting screwed on price but have no option but to sign up.
Kick em when they are down
Aside from the encryption issue, BluRay players seem to need to be updated regularly to keep up with the changes for the new movies. Every time they find out someone has broken the key, they change something. I'm not planning to buy BluRay until they sort this out. The BluRay players are special purpose computers that need regular updating via the net. Just what you need!
I've heard rumors about this being possible. Have they actually released any BD movies that won't play on a first-generation player without a firmware update?
I'm not talking about bonus materials (which may require a player supporting Blu-Ray 1.1 or 2.0), but the movie content itself.
Where's the license agreement for CDs that allows people to convert their music into a different format? I doubt Apple would distribute iTunes with CD ripping, tagging and album art feature if it were even the slightest bit gray. If it weren't for the DMCA (in the US anyway), the same would probably be true of movies too.
There is no "license agreement". CDs are covered by US copyright law - Title 17 of the US Code. All the laws for "phonorecords" apply to CDs as well as legacy formats (like vinyl and tape).
The right to rip tracks is a gray area. The law does not give explicit permission, but does permit something called "fair use", which different lawyers interpret in different ways. The RIAA says that backups, mixed CDs and ripping are not considered fair use. Most others disagree with the RIAA. So far, no case requiring a decision has gone to court, so we really don't have a solid decision about this.
And you're right, regarding the DMCA. Movies would normally also count as phonorecords in this regard, including all your fair use rights (whatever they may be). The DMCA, however, makes it a crime to break any DRM scheme, effectively nullifying your fair use rights for anything that is DRM-wrapped (which is most digital media other than CDs.)
Audio Home Recording Act of 1992
AHRA grants users the right to make copies, but the language is not that explicit. AHRA's text implies that this would only be permitted if the copies are made using devices that implement SCMS copy protection. But the language isn't 100% clear in that direction either.
Again, no court has ruled about this, so we don't know for certain.
Well, you know how the content industry thinks. They'll say that anything without DRM on it must be pirated. I mean, why would someone give away music or movies? Especially without adding something so they can charge a nickel or dime each time you want to use it on some hot new portable media device down the road?
Yeah. Even your home movies should be DRM-crippled and region-coded.
Yeah. Even your home movies should be DRM-crippled and region-coded.
What?! Home movies? You mean that there are creative people outside of Hollywood? Can't be! only Hollywood can be creative. See, it says so right here in my studio manual. /sarcasm
BTW, thanks for the earlier clarification.
Helll, at the prices for music and videos from iTunes, I'm sure the amount of illegal downloads has gone down.
Wrong, but then if you would have bothered to spend 10 seconds on google, you wouldn't have been able to go on your little diatribe.
http://www.telegraph.co.uk/money/mai...cnmusic130.xml
http://www.rte.ie/news/2008/0310/download.html
The networks want more money, not the same - and they probably don't really understand that holding onto their current systems is leading to less money (as users increasingly skip ads or download).
Although Apple is trying to create a viable economic model for TV programs, after the reactions of the networks I'd be surprised if Steve wasn't wondering whether they should just let iTunes (and iPods and AppleTV) take any and all formats available without negotiations and just focus on selling hardware -ie: record FTA (with ad skipping) and play any avi's.
Apple is not the problem, it's a solution to the problem.
I've got the first three seasons of BSG sitting on my entertainment computer (Mac Mini). They are legit and were purchased as season passes from the iTMS. I've downloaded every episode of Season 4 from Channel BT. I want to watch the content on my new Sony Bravia 50" TV and I honestly don't care how I have to acquire the content so that I can do that.
I prefer to do it legally through the iTMS or Amazon but when the only way the content is available is as a crappy stream full of repeat ads that I have to watch on the computer then NBC is going to lose out on my money.
There is some major irony that NBC wants to gum up the works of people that legitimately want to buy content just to try to ruin the day of pirates. There are a lot of people that are willing to pay a fair fee for content as long as 1) it exists and 2) is easy to handle. I really believe that. I knew people that dropped cable for iTunes TV shows and said it was a lot cheaper. The money goes straight to the network (and Apple) as opposed to going to Comcast and hopefully advertisers who will keep buying ads.
Think about it this way, iTunes (for music) existed how long before there was a music store? iTunes came out a few years after many other decent Mac MP3 players. It's the Labels/studios fault that they were literally years behind the curve on offering digital content to people. The only thing that kept me from ripping all my CDs and records back in the 90s was HDD space. If storage cost what it does today, i would have digitized everything i own at least 10 years ago. Like many of my friends, i would have taken the original CD cases and put them in plastic storage bins and shuffled them away into a dark corner, or basement. I know one day i will want to re-rip them as AIFF or lossless or something, so i would not purge the originals. I honestly can not tell you the last time i listened to a physical CD at home or in a car. As soon as i get a CD i rip it to my computer. I don't even own a standalone CD player, and have not for a few years.
It makes me wonder how iTunes would know a file is an episode of Lost pulled off P2P networks, as opposed to a home movie, student film, short film, etc? There are so many student films, band videos, short films etc that would love to have people carry around their work. You don't make student films, or shorts, for massive profits. You make it to show what you can do and hopefully turn that into a bigger project in the future. I know a TON of people that post their work on youtube because it's easy, not because it's (sorta) protected from download. They would definitely click a checkbox to let people download their content for an iPod/Zune/PSP/whatever. I understand youtube embeds it to get ad views, and that's how they hope to pay for bandwidth. It's fine. That's their business model, but i don't think the DRM is why most stuff is up there.
There is some major irony that NBC wants to gum up the works of people that legitimately want to buy content just to try to ruin the day of pirates. There are a lot of people that are willing to pay a fair fee for content as long as 1) it exists and 2) is easy to handle.
All true. The issue is really the corporate mindset.
With broadcast TV, you (the viewer) are not their customer. The shows are paid for by advertisers. The studios therefore do what it takes to maximize advertising dollars, without regard to what consumers want. When shows are purchased commercial-free (like on DVD, or an iTunes download), then the viewer is the customer. Viewers have a very different set of requirements, and the studios don't (yet?) know how to handle the difference.
Hence the reason NBC likes Hulu - it matches their broadcast model. The show is streamed "for free", with non-skipable advertisements.
This is also why they don't mind VCRs too much - you tend to see ads as you're fast-forwarding past them. but why they don't like PVRs - where commercials are often skipped over altogether.
Although show popularity does affect ad revenue indirectly (high Nielsen ratings allow them to demand higher payments for commercial time-slots), it is indirect. A show that is popular during a time of year when the industry isn't negotiating new rates won't command more money. And a show that has bad ratings during this time won't cause them to lose money.
The same phenomenon applies to DVD sales. If a TV show is sold in a whole-season box set, then they see money if the season as a whole is good enough to command sales. If there are some bad episodes (even a lot), it doesn't matter, because the others will pull-through the revenue.
Which is where we get to iTunes. Over here, there is NO ad revenue. All the profits come from the individual downloads. Every show must be good enough to command downloads, because they won't get paid otherwise. If there's a bad episode, word will get around quickly and there won't be a lot of downloads. And if there's a good episode, word will also get around, and there will be a lot more downloads (although the studios don't seem to have figured out this last bit.) They feel a need to try and guarantee a steady stream of income, similar to what they get from broadcasts, which means charging a high price overall, so the bad episodes will pull through an expected amount of revenue.
This model, of course, doesn't work with a per-episode download service like iTunes, but studio executives have 60 years of broadcast experience and no download experience. They're probably not going to wise-up until they are shocked into the 21st century by a money-maker that violates their perceived model. A show that doesn't make much on broadcast but makes a tremendous amount via download (much like some shows have already done on DVD.)