Apple’s $.99 Rentals off to a Rocky Start

To go hand-in-hand with their updated set top box and iTunes 10, Apple recently started offering TV show rentals for just $.99, which lets users view the content for up to 48 hours. Unfortunately, the service isn’t getting quite the network adoption that Apple hoped for. Currently, only Fox and ABC have signed on, and even that partnership may not last long. Chase Carey, the president of News Corp, recently said that the 99 cent rentals were a “short-term test”, so it is possible that they will withdraw Fox shows from iTunes.

To make things worse, last week an executive from Warner Brothers stated that “Warner Bros. didn’t participate in Apple Inc.’s plan to offer TV show rentals for 99 cents because the price was too low and would have hurt sales of full seasons.”

Now, NBC, which airs some of the most popular shows on tevevision (The Office, anyone?), has told Reuters that it is “unlikely” to join Apples rental service.

Offering NBC’s shows for that price on the Apple TV service would undermine the value of their shows, he said.

“We do not think 99 cents is the right price point for our content. … We thought it would devalue our content,” Zucker said at a Goldman Sachs investor conference.

He pointed to the fact NBC shows are already available for $1.99 for download on Apple’s iTunes service.

The networks are primarily worried that cheap downloads will cut into the number of live-viewings and DVD sales, so unless the networks fold, Apple will have to raise the prices – or only be able to offer a few different shows. With the Boxee Box and Google TV right around the corner, Apple is going to have to do some quick negotiating (which really isn’t their strong suit) to keep iTunes rentals competitive.


Post a response / What do you think?