Deer Door – PetTube.com – More amazing video clips are a click away
Feb 232010
The New York Times published an article today, Networks Wary of Apple’s Push to Cut Show Prices. It includes some more quotes from generally unnamed network execs, but doesn’t address the problem I did the other day of how DVDs and Blu-ray are undercutting the iTunes pricing model with accelerating frequency.
The article makes mention of the fact that viewers can choose to watch television shows for free on Hulu, but doesn’t mention that Hulu is still a money-losing venture, or the rumors that it will be subscription-based on the iPad.
Meanwhile, Philip Elmer-DeWitt writes a piece today that graphs the growth of movies and television shows on iTunes, and breaks down the relatively slow growth of both media from statements Apple has made in financial conference calls. In a nutshell, compared to the rate that iTunes sells music, movie and television sales are practically non-starters (although it is worth noting that when Apple bundles rentals and sales together, the numbers jump a lot. Apparently, the iTunes rental model is more popular than sales.)
Also, don’t forget about Apple’s 500,000 square foot data center that is due to come online in 2010. I haven’t been able to find an exact date, but don’t forget that’s five times bigger than their existing data center in California (this is apparently a video from a North Carolina realtor taken on Feb. 19):
Obviously, the construction has been going at a very fast pace from its announced construction just last summer. My opinion? That the target of that Data Center is Netflix streaming.
References:
Networks Wary of Apple’s Push to Cut Show Prices – New York Times, February 21, 2010
Apple’s new pitch to Hollywood – Apple 2.0 (Fortune), February 22, 2010
Apple Data Center Maiden NC – YouTube
Interview: Apple’s Gigantic New Data Center Hints at Cloud Computing - Cult of Mac, August 16, 2009
Feb 192010
Warner Music’s CEO recently admitted that the variable pricing the record labels fought so long and hard for with Apple over the past few years wasn’t a rousing success. In fact, he admitted that “maybe raising prices in a recession wasn’t the best idea.” Whether it’s Jeff Zucker, the CEO of NBC who removed his shows from iTunes in favor of Hulu because he wanted to both charge more and lump shows into bundles (essentially using marketing and selling strategies from the last century), or Warner’s Bronfman, it seems like the CEO’s of these companies are incompetent morons who have no idea what they’re doing. And I’m not even talking about the whole Leno/Conan O’Brien debacle.
From recent news, it seems like the book and magazine publishers are the newest content industries that aren’t listening to Apple when it comes to pricing and distribution, with potentially overpriced books, magazine, and newspaper subscriptions threatening to limit the possible success of the new iPad distribution model. We’ll have to see how this turns out; what I really wanted to mention today was the pricing of TV shows on iTunes.
In the past couple of days the rumor has appeared that CBS would be amongst the first to offer $.99 television shows; the rumors aren’t clear if this would be some or all of their content, and if so, what. I am presuming that this would be $.99 standard definition and $1.99 high definition. I really hope this is the case, as my recent research into this shows quite a disparity in pricing and iTunes overall guilty of charging quite a premium, particularly for HD content.
Blu-ray discs and players have, up until the last holiday season, been prohibitively expensive for most consumers. This high price wasn’t the “bag of hurt” that Steve Jobs so famously referred to a few years ago; he was referencing the expensive and complex licensing of the technology for playback and authoring. The movie studios are still trying to gouge people for the HD quality, with the Blu-ray discs usually costing $10 more than the regular DVD release, but in many cases they have been including the regular DVD and an iTunes digital copy along with the Blu-ray package, adding reasonable value for the extra expense.
But let’s look at TV pricing for a moment. For example, season 5 of Lost lists for $79.99 and sells for $48.49 on Amazon on Blu-ray. This is for 1080p content, which is higher resolution than is broadcast on ABC. In contrast, iTunes charges $49.99 for 720p resolution and $34.99 for standard definition. However, note that Amazon is selling the standard definition DVD set for $24.99. (There are 20 episodes in this season).
Let’s look at another example. I’ve been watching through the first couple seasons of Supernatural, a show I came across a few months ago because iTunes was giving away a free episode. Season 1 costs … on iTunes, and is available on DVD from Amazon for $14.99. Supernatural started shooting in HD with its third season, and here the value proposition is even more disparate. Season 3 is available on Blu-ray from Amazon for $27.99 (list price:$69.98). On iTunes, the cost for the 16 episodes of season 3 is $46.99 HD, $30.99 SD. (On Amazon, episodes cost $1.99; the whole season is available for $18.99, however.)
DVD retailers seem to be discounting both Blu-ray and DVDs pretty aggressively in some cases, and I think the sooner that Apple can lower the prices of its television show offerings the better. Meanwhile, 1080p and an updated Apple TV might be nice, as well as the rumors of a subscription service.
See also:
iPad Surprise: Lower TV Episode Prices in iTunes? – Wired, February 12, 2010
iTunes New Pricing Structure is a Band-Aid – Wired, April 7, 2009
Music Industry Still Not Thrilled with iTunes Control - Ars Technica, Feb. 2, 2009
Despite iTunes Accord, Labels Still Fret – New York Times, Feb. 1, 2009
Feb 182010
Microsoft Office. Join the herd.