Apple’s new, iOS-driven Apple TV is largely selling itself to consumers as a box that will allow them to stream all of their favorite television shows for 99-cents a pop whenever they want, but that price point is facing some notable resistance from network executives, and may quickly inflate once the device begins shipping at the end of the month.
Although Apple has inked deals with News Corp’s Fox and Walt Disney’s ABC to make shows available for $0.99 when the Apple TV launches, NBC Universal chief Jeff Zucker does not intend on following suit, claiming that the price point was setting the bar too low.
“We do not think 99 cents is the right price point for our content. … We thought it would devalue our content,” Zucker said at a Goldman Sachs investor conference.
At the same time, News Corp President Chase Carey also commented on their own experiment with a $0.99 streaming price for Fox television shows, commenting that it was a “short-term test.”
As Zucker pointed out at the time of their statements, NBC’s shows are already available to download and own on iTunes for just $1.99 a show. The conundrum is simple economics: Will more than twice as many people stream a show once on the Apple TV for 99 cents as people will pay to download it through iTunes for $1.99 to have forever? NBC seems to be guessing “no,” while Fox is willing to give it a shot, but may quickly pull out if the margins don’t pay off.
Apple’s clearly trying to take their set-top box more seriously after years of dismissing it as a hobby, but unless they can get both content providers and consumers on board at a price point that is attractive to both, a hobby is what the Apple TV is destined to remain.