iTunes Pricing: TV Shows Must Fall

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