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Apple is reportedly considering cutting its prices for television episodes in half, from $1.99 to $0.99 -- the same price it currently charges for music singles. The price-slashing is part of Apple's plan to increase digital video sales. The company believes that the increase in volume will more than double, leaving profits positively affected even after the price cut. (Source: appleinsider.com)
But not everyone is seeing the price reduction with rose-colored glasses. Television studios worry that cutting the price of TV downloads will negatively impact DVD sales. Currently, a season of a popular network television show retails for $30 to $40. Since a season contains about 23 episodes, the per-episode price is $1.30 to $1.75. Thus, the networks are worried that consumers may choose to opt for the $0.99 iTunes episodes instead, leaving the stores with full shelves and the networks with empty pockets. (Source: machinist.com) On the other hand, downloads are not complete substitutes for boxed sets. These season-based packages tend to contain commentary, deleted scenes and other bonus material, and are also a popular gift-giving item. Furthermore, downloading episodes from iTunes seems to appeal more to the person who missed an episode and wants to catch up, a customer that may not even be interested in buying an entire season on DVD. iTunes' television episode pricing has been a touchy topic recently. Last week, talks broke down between NBC Universal and Apple, and as a result iTunes will no longer be offering NBC shows after early December. Apple had blamed the gridlock on NBC's push to increase download prices, but at the other camp, NBC maintains that it wanted to offer a more flexible pricing system than Apple's current model. (Source: macworld.com)
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