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iTunes, Executive Tongueslips and the Mythical 99-Cent TV Show

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Apple's had ambitious TV plans. Standing in the way, industry execs. Apple supposedly wants to offer subscriptions to packages for $30 a month, and to sell shows for a buck. Funny then, what CBS's CEO said during an earnings call.

The relevant Q&A from CBS's most recent earnings call, via Seeking Alpha's full transcript, with my emphasis added:

Doug Mitchelson – Deutsche Bank
And the secondary is just online distribution of your TV shows, I don't want to belabor it because we have talked a lot about over the last year, year or two, but there is a story out there that Apple wants to try to get prices down $0.99 per episode on the sales side and we are all still wondering if this is a right ad load on the free streaming shows. I mean any thoughts on your comfort level with the business models that are out there online?

Leslie Moonves
Yes, I mean the interesting thing about online ads and once again the reason we are happy we are controlling our own content is the advertising thing it's sort of a trial in process. And we are experimenting with different ad loads and as you know authentication TV everywhere would involve the same load that is on the network with similar pricing. So in all these, once again, they are all short-term deals and it is a moving target. There are a certain shows that will be sold on Apple for $0.99, I don't know yet which will be – and we will talk to them about it. But look the great news for us is are we are up in every single demographic category, at the same time we are increasing our revenue from online and other sources. So it all looks good for the future.


The catch, as it were, is that Moonves might not have meant what he said quite so specifically. That is, Peter Kafka's sources tell him that what he meant is that CBS is "open to talks with Apple," but there aren't any specific plans to cut TV shows prices. (In other words, CBS kinda wishes he hadn't said it, but they're not saying it it's flat wrong.)

Leading up to this, the Financial Times has reported on two separate occasions that Apple's pushing for 99-cent shows, and that they'll happen, possibly in time for the iPad launch in April. And then there's the WSJ's persistent report that Apple's pursuing $30 monthly subscriptions for packages of TV shows. Which sound nice. Desirable, even, to the point that Apple would sell way more TV shows.


But TV execs thus far—aside from Moonves' slip here—aren't exactly bubbling about selling their stuff for cheaper, even given the possibility of pushing a greater volume. At best, we could see certain shows sell for cheaper, like Moonves but they'll likely be shows that have less "value." (Like say, Season 1 of VH1's Dr. Drew's Celebrity Rehab, which goes for 99 cents a pop right now.) In other words, not Lost. It's the same reason the book guys don't like the idea behind Amazon's flat $9.99 rate for ebooks, or really anybody who produces any kind of content seems to be acting like such a paranoid, entrenched asshat to the average person who just wants to buy digital content cheaply and easily—they don't want you to think the stuff they make is worth less than it already is. (Though in the case of TV guys, it's not just losing value they're worried about, it's making more money to cover the expensive production costs of quality, hence their hot-on-the-balls desire to turn Hulu into something you pay for, since the ad revenue's not quite cutting it yet). Oh, and cable guys, like Time Warner, really aren't thrilled with an iTunes that sells subscriptions to TV packages, which is, you know, the same business they're in.


Point being, if this revitalized TV segment of iTunes happens, it's going to take a lot of coaxing, leveraging and browbeating to happen. If it does. [MediaMemo, Seeking Alpha, Mucho props to Peter Kafka]