So that's why I asked, what do people feel is a fair price and what would you expect for it?
I totally agree. The current price-points on the iTunes store for video content is way out of whack with reality. That was part of my point.
I'm not sure I'm reading your tone right, but I do think
maybe you're blaming the wrong parties a bit there. The price points, and the availability shell game they're playing (on both iTunes and on online streaming services), are being meticulously chosen to protect the existing "legacy" business model. They're protecting the middle-men. The price point on iTunes is just low enough for the person who missed one episode of Fringe (probably because their crappy cable company provided DVR screwed up) and has little other choice to grimace and swallow it. But they're set too high to let you just drop cable altogether and buy all of your content that way. Availability is structured so that Netflix and Hulu are good as an
add-on service that increases revenue on the margins, but not so that people can abandon Comcast or an occasional trip to Walmart.
But that's not Apple, or Amazon, or Netflix making that calculation. Those prices are set by negotiations with the content providers. It is Time Warner (HBO, Warner Bros Studios, TBS, etc), and Comcast (NBC, SyFy, Bravo), News Corp (Fox, STARs), Cablevision (AMC, IFC, Sundance, Rainbow Media), Disney (ABC, ESPN, and, well, Disney), and so on and so forth that are demanding those prices. And what do they all have in common? They are all either cable companies themselves, or they own significant stakes in "delivery" companies (like SKYNet for News Corp). In fact, the only real exception in that list is Disney, and surprise, surprise, they've typically been among the more "willing" of the content providers to dip their toes in the waters (and are, of course, friendly with Apple because of Pixar).
If Apple could sell those episodes for $0.99 cents, they would. They've even tried with the rental thing, but Comcast and Time Warner and the rest (of course) refuse to play ball. Heck, if they could sell them even cheaper (or free) they would. They aren't in it for the piddly 30% cut they get from the iTunes store (which is a nice business but a drop in the bucket compared to their other revenue sources, and probably relatively low margin compared to what they're used to for a "real" business). They want to use it to
own the ecosystem and use it to sell us iPads at $500 a pop. The 30% cut (which isn't what they get on music and video, by the way, that's not something any of them talk about openly) is a long-term play for 15 years down the line after they've already dominated the space.
But the content providers set the price, and they control the release timings and availability windows. Apple and Netflix and Google complain, and cajole, and suggest, but they're talking to the very people who own those pipes we're trying to make dumb.
The only way around them is to pull it out from under them. Just end-run the whole stupid, insular, wink-and-a-nod colluding bunch.
And, I'm not saying that I necessarily think it will be a
good thing... Certainly not my preferred solution in my dream scenario. (Or even that it will necessarily
work out the way they plan.)
But I do think that Apple is really the only one in a position to
do something about it. Precisely
because they don't care about their piddly cable-company distribution dumb-pipe business. "Hollywood's" whole business (TV, Cable, Satellite, whatever) isn't
nothing to them, but it isn't
real money. They're willing to
commoditize their complements, and I'm sure their motto with everything in the iTunes Store is "low-price, high-volume, is better".
That's why they are in a unique position to come in. They're willing to burn the existing business model to the ground. They can come in and offer the
people who make the content a better deal and more control, and then give the customers a better experience and better prices (and beautiful lock-in). Exactly, play-by-play, what they did to "cell phone software" with the App Store:
1. Get Time Warner, Verizon, and Comcast and whomever to offer your special "Apple TV Box/Set Thingy-ma-gig" with the carrot that they can sell it as a value-add subscription package on your existing cable bill (people pay $4 a month for the crappy DVR they shove down our throats, they'll pay $9.99/month instead to have Apple's). A few of the providers will hold out, but the customers will quickly pressure them to cave if it proves popular where it is offered, see also Verizon, Sprint, et all.
2. Sell a bazillion of them (at high profit margins, while cutting the cable companies out of the hardware-rental revenue and device lock-in if possible).
3. Launch big-name, exclusive, iTunes content and undercut the crap out of the "competition" from the traditional media companies on price.
4. Open the iTunes Video Store to registered "content providers" (who can be anyone with a camera, a vision, and a NLE) with the same terms as you offered Developers access to the App Store (keeping 70% of gross revenue is a hell of a lot better of a deal than the show runners are getting from NBC, you can bet that).
5. People start cancelling their cable service for real (not the current set of nerds-only cable cutters we have now, but like landlines to cell phones). A few at first, but then... Watch the content providers flock in (small and indie at first, but it only takes one Angry Birds and the rest will come). This will put pressure on the traditional networks, drive prices down, and put the pants on Apple in those negotiations. They just say "30%, take it or leave it", just like they did to the print publishers.
6. ??
7. PROFIT! (But for real this time.)
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Topic: The Oatmeal - I Tried To Watch Game of Thrones (Read 3273 times)