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Apple Pushing TV Networks To Slash Prices On iTunes

Posted By: Treasure

On the eve of the Apple tablet release, Steve Jobs is asking TV networks to get cheap.

In meetings with television executives, Apple has also been urging a TV networks to slash their pricetags on shows sold through iTunes to $0.99 – half of the standard $1.99 price.

According to a Financial Times report, Apple explains that lowering prices will increase sales dramatically, offsetting any revenue lost from the cuts. Networks are resisting, citing the music industry’s 2003 pact with Apple to reduce prices. The plan helped boost downloads, but album sales slumped.

In 2007, Variety reported on similar pricing plan talks between Apple and TV studios. Looks like those talks either fell through and are resurfacing again now that the tablet is about to arrive. Or Apple is planting the story to pressure networks.

With DVRs, Netflix and illegal online downloads already plaguing TV studios’ profits, Apple asking networks to reduce prices might seem unfair. At $0.99 per episode, most TV shows will be cut down to about $22 for a season pass. Once Apple takes their third, networks would only get about $14.50.

Yet a quick review of the Top 10 TV shows downloaded on iTunes, including 24, The Office, Vampire Diaries and the Hope For Haiti Now special, show that each TV episode costs $2.99. Bundled “season passes” are also pricey. NBC’s The Office season 6 pass costs a whopping $59.99, while Fox’s 24 costs $49.99 for 24 episodes.

Waiting for Transparent dvd set 1-3 releases might be cheaper, and include more extra features, but iTunes consumers are paying for an on demand experience. Apple thinks users are paying too much for shows, or simply aren’t bothering to get them at all because of high prices.

Although Apple does not release specific numbers on TV show sales, they are bragging about iTunes’ first quarter results.

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