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Apple Wants Lower Prices

February 16, 2010 | Author: Ibex Marketing

According to a Wall Street Journal article last week, Apple is in negotiations with TV networks to lower the price for TV shows sold on the company’s iTunes site. The report indicates that the goal is to make video content more affordable when the iPad starts shipping, presumably in support of their claim about it being the best way to watch such content. One source indicated that Applie has already been experimenting with $.99 per episode pricing, which is half the price for their standard definition TV shows. (HD versions cost $2.99 each.)

I find this to be a curious move, and wonder if Applie is falling farther and farther behind the curve. Leave aside the question of just how well suited the non-HD iPad is for video watching; are people going to want to buy episodes when so many are available for free? The network sites and Hulu offer a wide variety of episodes for on-demand viewing. If you’re a Netflix subscriber, you have streaming access to a large selection of shows at no additional cost.

TV episodes are qualitatively different from CD tracks. I believe that people are more inclined to buy music tracks which they will load into their iPod and listen to over and over. I don’t expect that people will be loading TV episodes into their iPads so that they can watch that same show over and over. Maybe I’m biased by my own personal preference, but I rarely like to watch reruns, especially in the same year as their first run.

Sure, Apple will sell more TV episodes if they cut the price in half. And yes, some people will watch them on their iPads. But I don’t expect the pricing or the delivery to have an impact on the television programming market that comes close to the impact iTunes has had on the music industry.