Why 99c rentals are still too expensive

Apple’s new Apple TV and 99c TV show rentals are definitely a step in the right direction but the cost is ridiculous.

Peak, premium, the best there is, content on major networks gets between 25 and 65c per viewer per show in revenue. That’s the top, highest end. So yes, the top of the top could conceivably rent for 99c, but the lesser shows? No way I’m spending 99c to watch a Daily Show (10 to 25c tops).

Last October I did a detailed tracking of what we watched and priced it out in the Apple store of the day. We watched that month an average of an hour and a half a day and the “best price” (taking advantage of Season Pass discounts) was $112.55. With rentals that would drop to $85.14.

Now, Dish (or Cable or whatever) 100 channel plan is around $65 a month, but I can watch up to 640 hours in that month (or record it for time shifted viewing). That’s about 10c an hour, not $1 per show. Of course, no-one can watch or record 640 hours in a month. The American Average is 135 hours a month of viewing (depending on who you ask, this is the conservative, lower end) or around 43c per hour, not per show.

An HBO subscription, with 32 hours of original programming a month equates to about 31c per hour, not show.

Part of what I find egregious about Apple’s new pricing is that it’s 99c for a 22 minute show, 99c for a 44 minute show or 99c for an extended episode. No allowance for the fact that some shows are worth more than others.

I’d cheerfully pay 10c per Daily Show. If I did and Apple took their 35%, that’s roughly 6.5c per show per viewer by 2 million viewers or $130,000 revenue per episode against approximately $35,000 per episode in cost. That’s an improved deal for the Daily Show producers and a fair deal for viewers.  The absolute maximum I’d pay for a Daily Show is 25c and at that I think it’s a rip off.

Friday Night Lights, Mad Men, Burn Notice et al. I’d be happy to pay 50-65c but not 99c. Even at that these shows would be better off with this revenue model.

So, nice try Apple but until watching 4-5 hours a day, every day for a month has to be under $60 a month in total for it to be considered a cable replacement. Of course, this may not be Apple’s doing at all. It’s much more likely that the content owners have some ridiculously outsize estimate of the “value” of their content.

One thought on “Why 99c rentals are still too expensive”

  1. It has got to be mostly the content owners grossly over-valuing their content. They are clinging to their doomed business model and only Fox and Disney are on board with Apple’s new offering- and Jobs is the top shareholder at Disney! So CBS, Viacom, NBCU, et al wouldn’t even adjust their prices down to 99c.

    The cracks are showing, but there is a long way to go. Selling content directly to consumers is the new model, and the middle men at the major media conglomerates will fight tooth and nail to resist it.

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