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Apple logo - Source: ONE News
Apple is in talks with News Corp and Walt Disney to rent TV
shows to American viewers for .99 US cents (NZ$1.40) through
iTunes, three sources with knowledge of the matter said.
The industry sources, who spoke on the condition of anonymity
because negotiations were private, said the discussions were aimed
at allowing viewers to rent network programming off Apple's iTunes
store for 48 hours.
One of the three entertainment industry sources said that several media companies, including NBC and CBS, were not enamoured with the plan because they believed it would undercut revenue they already earn through iTunes.
But some analysts say if the deal goes through, revenue raked in off iTunes is likely to dwarf the income networks earn through free, ad-supported content online from sites such as Hulu.
Representatives from Apple, Disney, News Corp, CBS and General Electric's NBC declined to comment.
Disney owns ABC and News Corp runs the Fox network.
American consumers currently can buy - for repeated viewing - whole episodes of popular TV shows like ABC's Lost and NBC's Friday Night Lights for about $US1.99 ($NZ2.85) an episode.
"Right now, we're against it. We don't think it's a good business model. Why cut your price?" the source said.
Apple is also set to unveil a new version of its iPod Touch with a higher resolution screen, according to Bloomberg, which broke the news of Apple's network negotiations.
Fox and Disney's ABC already provide episodes to video web site
Hulu, a joint venture with NBC - which has offered streamed
programmes for free until recently, when it started charging
customers for some content.
And all of the media companies also have existing content deals
with cable and satellite companies.
"In a sense, this rental model undercuts purchase, but it's the way the world is going," said Tom Adams, president of Screen Digest Inc.
"All the free streaming options that have proliferated on the internet have already brought to a halt the fast growth of the TV show sales business," he said referring to the electronic sales of episodes on iTunes.
He also noted that free, ad-supported streaming services were
providing pennies per episode viewing to networks, while Apple's
plan could conceivably yield more if Apple offered to take the
industry-standard 30% cut on any content rented.
Apple in 2007 debuted Apple TV, which plays computer-based video on
television sets. Its popularity has paled in comparison with
devices like the iPhone and iPad.
