Paying for TV Shows... Too Much for Too Little
A while back Apple started selling two ABC network shows, Lost and Desperate Houswives, from their iTunes Store designed to be watched through the iPod Video (QuickTime video files at 320x200 resolution, or so). Today they announced that they were selling a number of current NBC shows - Law & Order, for example - as well as some classics, such as Knight Rider. And there's rumors that's ABC-owned ESPN might start selling content through the service as well. The price per episode? $1.99
Personally such a price seems far too high to be paying to watch low resolution TV shows that air for free, let alone dropping two bucks to watch David Hasselhoff and KITT. I see only two benefits to being able to download a show through iTunes:
Time shifting is the direction media consumption is heading. Our children will have a hard time believing us that we actually sat around and waited for a TV show to come on. We've already seen it with movies and music, and TV is next. In fact, time shifting is already here with digital video recorders like TiVo, ReplayTV, and the slew of non-branded DVRs being shipped out by cable and satellite companies alike. So time shifting, while a definite benefit of buying TV shows through iTunes, is only a minor one since DVRs provide the same functionality and at a much richer resolution.
The real win here is portability - you can watch that TV show while on the bus, or waiting at the DMV, or while visiting your in-laws. The downside, of course, is that you're staring at a tiny screen, but the trade off is that you've got a TV player that can fit in your pocket.
Regardless, I still can't fathom why a TV show is worth $1.99. To me it seems like the old episodes of Law & Order aren't costing the good guys at NBC anything. All the costs have been paid already to make it and market it. Sure there's cost to sell it through iTunes, but $1.99? I mean, I think they could do this for much less and still make a profit. And it's all “found money” - I mean, five years ago, do you think anyone forecasted that NBC would make any money on old seasons of Law & Order except through syndication? Perhaps their concern is that too low of a price would give the perception of lack of quality, as Joel Spolsky has discussed before, but to me it looks like they might sell more if they lowered the price. (Steve Jobs had announced that over three million videos have been sold through iTunes... I wonder if they cut the price to $0.99 how many would have been sold... more, less? The cost to the content providers doesn't change on how many are sold, it's just 1s and 0s...)
I think $1.99 seems like too high a price because:
- Network TV shows are already free; with DVRs they can be time shifted, too.
- Other internet-accessible, time shifted content is already free (i.e., podcasts)
- The resolution is low, and really only useful if you plan to watch the show on a small device
- The only real advantage in my book, portability, is less than ideal due to the small screen size of an iPod - who wants to watch an hour-long show on that itsy bitsy screen?
(For a great discussion on moving TV content to pay-per-demand, be sure to check out Mark Cuban's blog entry, How Bob Iger Saved Network TV.)