Sunday, February 21, 2010

Streaming video news part three: iTunes episodes for 99 cents?

There have been a few interesting developments in streaming video this week, all of which should have long-term implications for the television industry. I'm hoping to write about all three over the next day or so. Click here to see my thoughts on Hulu to the iPad and HBO's GO

Though this news item isn't quite "streaming video" specifically, it's still important to discuss. Rumors are swirling that CBS might start selling episodes of its television series on iTunes for only 99 cents

That, according to statements by CBS head honcho Les Moonves. All Things Digital reported on Thursday that Moonves noted certain series would begin to sell for a dollar less than the usual $1.99 all the time. All Things later updated the story saying that behind-the-scenes folks at CBS didn't think anything was specifically in the works quite yet, but talks were definitely happening. Despite that, Moonves is the only one on the record and thus, there is still something to discuss here. 

Some are noting that this development could be declared a victory for Apple, who have reportedly been pressuring the TV networks to drop the price of television episodes for a while now. That was the word late last month, as many assumed the move was to coincide with Apple's iPad. 

As Mashable noted at that time, episode sales have not been an overwhelming success for Apple in the iTunes store, and so they assume a price slash would appeal to more consumers and thus raise sales figures -- obviously enough to re-coup the dollar lost on each sale under this new plan. 

The question at that time and still is, will the networks go for it? Though it will be great to have more units moved and see more episodes top random iTunes charts -- just for appearances sake -- but I can't imagine cash-crazy nets like NBC would go for this deal unless they were completely sure that the lower price equaled more money in the end. Especially since NBC pulled content off iTunes in 2008 in hopes of being more able to control the price themselves (and they did, getting $2.99 for HD eps). 

Secondly, even if cheaper episode costs brought more people and more money to the networks via iTunes, it would also possibly pull more people away from the actual airings on television, which of course means lower ratings and less money from advertisers. And there is no way the iTunes sales revenue would make up for that. 

But if CBS, the most successful network ratings-wise right now at least in terms of viewers, takes the bait and is actually successful, there could be some sort of shift to cheaper episodes. 

What does this mean for Apple? I think it means they'd be less willing to approve a Hulu application, because they'd be offering a more attractive-than-before alternative from the iTunes store. It also might tie in with the rumored iTunes powered Apple TV subscription plans that have been talked about for months. Under that plan, users would pay a monthly fee (say like $30) and be able to have access to TV content through all of Apple's platforms -- and provide a slightly new revenue stream for networks. 

In December, CBS and Disney were rumored to be on-board with that deal, which would reportedly gain them $2 to $4 for each subscription. This would clearly allow consumers to by-pass paying for cable at home when they could just pay a fairly cheap rate to Apple and get all the same programming. 

Whatever happens, with all this and the possible Hulu-to-iPad news, it's clear that Apple has a lot of horses in the TV game-changing race. 

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