Why The Internet Scares Them, But Their Greed Overpowers Them
If this is true, it is a very good thing. And it is probably true. The WSJ would know, after all, being Rupert’s plaything. (Anyone wanna guess who authorized this leak?)
The 99 cent price point is a very important one. It is “one song”. It is the dollar menu at a fast food chain. It is just one step closer to me canceling my cable TV subscription. This is how we fulfill the promise à la carte cable could never deliver on. You pay a reasonable price per episode. If this works, the networks see tons of growth, and then start making real money off of it (and I think they will), the other content providers will come. Package “season price” deals will come, and yes, all-you-can-eat subscription pricing will probably come (though maybe you won’t need it).
It might not be quite there, yet, but it is close. Think about a “regular” $60 per month tier-1 cable bill. Do you actually watch 60 shows in a month? On most months, that’s two a day. No days off. Including weekends. Sure, some people who park their kids in front of the “TV babysitter”, and then there are those who just turn the shows on for noise in the background, but don’t actually watch them. But for the shows you really sit down and watch? Sixty is likely a bit high, and certainly very high for my less-TV-addicted friends. Especially if you subtract out the news shows which are often available for free online (increasingly syndicated via RSS), and if you subtract out the weekends and holidays and the reruns and the flashback filler episodes. That’s pretty darn close. You just need a few more content providers onboard.
And then there will be competition from other stores, like Amazon. The networks won’t want to give Apple the keys to the kingdom like the RIAA did, so they’ll start selling rentals with similar terms elsewhere. But per episode prices, where you pay an “impulse sale” amount, is a very big deal. And it prices a full season of TV Shows at around $20-$25, which happens to be around same price as buying that latest blockbuster on DVD or BluRay when it comes out, but you get to do it a little at a time even so it seems like less.
Eventually, it could level the playing field. The power held by the networks to control content will lessen, like it already has begun to do with the RIAA. Indie producers can have a viable platform. They’ll get to keep a lot higher percentage of the profits if they don’t go through a network at all, after all. Maybe, just maybe, we will eventually get studios releasing episodic content directly to consumers, and competing in a real, open, free market.
The networks won’t disappear, of course. They aren’t newspapers. In fact, I expect that the ones that don’t pull the ostrich move will flourish. They’ll likely have made a huge amount of money off of the new system, so they’ll be the most powerful production studios out there. But there will be others too. Channel-less studios will pop up. At first they’ll be small fry and niche. But then there will be an Amazon out there. Someone who does it online-only and does it right and doesn’t have all the baggage. And they’ll have the same megaphone. In the same store. Right next to the other guys. If Apple does it right (and there is a lot of room for failure here), it could very well be the beginning of the end of the “network television broadcast model”, just like the iTunes store and Amazon already destroyed the “Record Company/Radio Station/Record Store” marketing machine system.
And that would be good for us all.
I’ll bring the chips. We find out at 1pm. (Oh, but only if you watch on an Apple device, which is cute, but points right at one of the ways they’ll probably mess this up in the end.)