As expected, in conjunction with the announcement of a new smaller and cheaper version of the Apple TV product ($99, available in four weeks), Apple today announced that TV shows from ABC & Fox could be rented for $.99. Other networks are not yet on-board for the $.99 rentals. ABC was no surprise since Apple chief Steve Jobs is on Disney's board of directors.
“When we put our shows on iTunes five years ago, it was revolutionary,” said Anne Sweeney, co-chair Disney Media Networks and president, Disney/ABC Television Group. “Since then, we’ve continued to provide viewers with innovative new ways to access our programming, and today we’re proud to team with Apple on a rental option for fans of our shows.”
Meanwhile Fox was more reserved describing its participation as a trial over the next few months.
I won't be too surprised if the other broadcast networks join in, but don't hold your breath for cable networks to participate.
First run movies in HD will also be available for rental for $4.99.
I wouldn’t hold my breath waiting for NBC to sign up.
I still don’t get why I would want to pay for a free television show; unless it is part of a boxed set. What am I missing? Does this mean ABC and Fox will no longer air their own programming on their super duper special video players via ABC.com, etc.?
It’s for the niche market of cord cutters who want to legally watch the shows, but want to watch them in HD. There is a market, but it isn’t very big, which is why Jobs has said that Apple really doesn’t focus on the AppleTV very much.
Robert, while I don’t expect cable nets to be the first to sign up, I’m not sure why you don’t think they will be participating at all. Those that already are on iTunes for sale seem like they should be interested in this after the see how it works for ABC and Fox.
“… Jobs has said that Apple really doesn’t focus on the AppleTV very much.”
The guy is a snake. He doesn’t say or do anything without second intentions.
he might be a snake but if the last three years have proved anything they’ve proved that Apple didn’t focus on AppleTV very much and I believe Jobs’ notion that being in the business of selling set top boxes when cable companies give them away is a tough business to build.
because it puts carriage fees that are very lucrative (because they are typically spread across ~100MM homes) at risk.
How is it any more of a risk than having their shows on iTunes to begin with?
the shows will still be available on those web sites for free. but for people who want to watch on their televisions (via Apple TV) or on their iPhone & iPads via iTunes, this provides a lower cost option than previously existed
because it’s half as expensive.
But I’m not sure that it would really make any difference to carriage fees. As already determined, the market for this is tiny. If they were willing to get on board with iTunes to begin with, lowering the price doesn’t seem like that big a deal. Like I said, they won’t be the first ones to do it, but I can see them joining in down the line.
Yes, but it just doesn’t make sense to continue development of a product he has had no faith in, even when the he is Jobs at this stage in his career. Moreover, this thing is more mobile and independent than settop boxes supplied by cable companies, I suppose.
This vaguely reminds me of when he commiserated that the iTunes store didn’t make any money.
Negotiations don’t necessarily have anything to do with what actually happens. Come negotiation time, the MSO’s will certainly lead with the premise that (e.g.) “AMC, you’ve lowered your value to us by making Mad Men available for $.99 on iTunes”
How many people actually download it on iTunes for $.99 is irrelevant to that conversation. It’s not irrelevant to AMC though. It can’t make up a $.05/mo decrease by renting 1 million of every episode in a season of Mad Men and Breaking Bad. I just can’t see the cable co’s risking it.
I don’t think I’m making my position clear. If the cable nets saw iTunes as a risk to carriage fees, why would they have gotten on board to begin with? Being available on iTunes at all seems like it would be the biggest risk to their fees, since that’s where they make themselves unexclusive to cable to begin with. If they were willing to do that and didn’t see a decrease to make it worth pulling their shows from iTunes, why would lowering the value be any different?
Your position is clear, you’re just stubbon. A lot of it is timing. when the networks/studios first got involved with iTunes/online, they didn’t know the MSOs were going to use it as a point of negotiation leverage. Now they know. In that context, cutting price in half is a very big deal.
So you really think that 99 cent rentals lowers the value more than free streaming on Hulu? Because USA and FX and ABC Family, etc. all continue to add shows to Hulu all the time. If all cable nets were so concerned, it seems like they would stop doing that. Like I said, some may see things your way, but I doubt every cable net will.
Most cable networks don’t stream all their shows on Hulu. Owners of Hulu put their content on Hulu hoping Hulu (the site) would make them money. How that pans out, we’ll see, but they truly have a vested interest in Hulu’s success that they do not have with Apple.
I agree that not every network will boycott. In the near future I wouldn’t be surprised to see ABC Family and Disney rent shows for $.99. But I’ll be shocked if AMC does, very surprised if any of the Time-Warner channels participate, and pretty surprised if FX or NBCU properties participate.
Disney & ABC Family already on-board not surprising) — semi-surprise: BBC America will participate too. But again, other than ABC/Disney it’s being spun as a test.
Robert a couple questions.
Without knowing the cut that goes to the studio versus what apple gets, how much would you guess the typical person generates (by ad revenue) for a show?
Because I have read about some studios saying the price point is to low. I just can’t seem to get my mind around that networks generate that much money per viewer for a show in comparison.
ABC and Fox made the same deal with Amazon today, and it’s effective at Amazon today, so published to many Bluray players.. imediatedly
I’d guess less than $.99 but first run is only one way that studios and networks make money. This is a period where managing the *perception* of the value of the content is no small deal.
In the existing business models, which the networks and studios will try to preserve for as long as possible, the big $ come from advertising, carriage fees, DVD revenues and syndication. In at least two out of four of those models (carriage & syndication) there is significant risk of creating the perception that the content isn’t worth as much as it used to be. If perception is reality, that’s bad news for the studios.