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ABC, Fox 'confirmed' for iTunes 99-cent TV rentals

updated 09:20 pm EDT, Tue August 31, 2010

ABC and Fox lined up for iTunes TV rental pilot

Apple has managed to line up two major TV networks for its 99-cent iTunes TV rentals ahead of tomorrow's event, a late leak may have confirmed this evening. Previously undecided Fox as well as ABC have reportedly agreed to offer at least some of their shows. The WSJ sources warned that Fox might only offer rentals for a short time as a trial balloon and that it wouldn't include shows where rights aren't uniformly in its favor, like American Idol.

While opposition to the plans is believed to persist at both ABC and Fox, both have reportedly agreed because they see it as an experiment in what works for digital TV.

Fox's parent company, News Corp., may consider it a bargaining chip: the company would not only want help with its WSJ iPad app but on its national tablet-focused magazine, which is now said to be nicknamed the "Daily Planet" based on the fictional Superman newspaper. News Corp. head Rupert Murdoch is known to be excited about the iPad and thinks it could return news to an era where customers are willing to pay for content they could otherwise get for free on the web.

ABC was already expected to provide very little opposition as Apple chief Steve Jobs sits on the Board of Directors for Disney, ABC's owner.

CBS, NBC and Time Warner have so far been reluctant to side with Apple, as they're afraid of challenging the dominance of cable and satellite providers, which still provide the majority of ad revenue and which can retaliate against Internet plans by offering poorer deals or even pulling networks altogether.

The results may disappoint Apple and others who had hoped for broad-based support but could provide a significant lift to the iTV media hub many now think could arrive at tomorrow's event. If rumors are accurate, it would have just 16GB of storage and so would depend on streams and local network shares for most of its content, making purchases less practical. At 99 cents, prices would also drop low enough that iTunes could stave off Hulu Plus and others that promise TV shows at just a fraction of the price of buying each episode.



By Electronista Staff
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Comments

  1. sammaffei

    Fresh-Faced Recruit

    Joined: Sep 2004

    -1

    It will work...

    NBC just refuses to play because of the pending Comcast merger. If ABC and Fox start pulling down huge revenue, the other's will follow on the fears of missing the gravy boat. If iTunes users want this to work, rent a few shows and vote with your wallet.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: It will work...

    If ABC and Fox start pulling down huge revenue, the other's will follow on the fears of missing the gravy boat. If iTunes users want this to work, rent a few shows and vote with your wallet.

    First, that's a big if.

    Second, you make it sound like it's all just extra cash, a no-can-lose proposition or something. A gravy boat only holds so much gravy.

    There are trade-offs that the networks face:

    If people start renting shows, they may stop watching shows on the air. As such, ratings for shows go down. Nielson and the likes are not going to count your rentals as part of the ratings. Why? Because ratings are used to set ad-rates. If you're renting shows (and expecting them to be ad-free), your viewership through iTunes is completely meaningless to the advertisers.

    Lower ratings mean lower advertising rates which mean less money coming in via advertising. So, while Fox and ABC are 'raking in' cash from rentals, they're losing cash from advertising. (A national commercial on, say, 30 Rock, a show with mediocre ratings, went for $160,000. So a measly 8 commercials during it's broadcast would gain them $1.2 million). And bear in mind that the network makes all that money. Sales/rentals proceeds on the iTMS would need to be split amongst production houses, crew, cast, and the networks.

    Next up, the affiliates. The affiliates sign contracts to the networks to get their shows. They make some money from advertising during these shows (local ad-breaks). They will want a share of any money coming off these on-line sales as well, or the networks could see some of their 'poorer' shows not make it on the air, pre-empted for local content.

    Do you remember the Jay Leno show? Do you remember why NBC decided to have it? Because, as they said, the costs to produce it were so much less than scripted shows in that time slot, that they'd still make boatloads of cash even with low ratings. And the networks made that cash. They would probably say it met their expectations.

    However, it was the local stations who were getting killed. Not only were they making far less money on their local ad money (for they weren't getting any of the savings from NBC), they also were losing ratings on their evening newscasts, which is where they make their money. They were the ones revolting, which caused NBC to shift their heads around. And they certainly don't take kindly to having the networks try to cash in on the shows they're helping to pay for, and not getting anything back.

  1. facebook_Jason

    Via Facebook

    Joined: Sep 2010

    0

    Geographic Limitations

    One major limitation with the Netflix and Apple iTunes store is that the large majority of quality content is only available to those living in the USA.

    Netflix is available to those in the USA (But for those abroad, you can get a US IP address with a VPN service)

    Also, if you are abroad it can be challenging to setup a US ITunes account without a US credit card.

    Yet I did find a work around solution for accessing the the iTunes US from abroad by using iTunes Gift Cards at http://www.VPNTelevision.com

    I don't understand why Netflix, Apple and the media companies don't just let people have worldwide access to media...wouldn't it mean more profits for them?!?

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