Another day, another executive crying about he cost of TV rentals on the Apple TV. Stop me if you’ve heard this one before. Time Warner CEO Jeff Bewkes thinks 99-cent TV show rentals from Apple and Amazon are destroying the industry.

How can you justify renting your first-run TV shows individually for 99 cents an episode…and thereby jeopardize the sale of the same shows as a series to branded networks that pay hundreds of millions of dollars and make those shows available to loyal viewers for free?”

He’s got a small point here, which he further bolstered by indicating that renting television shows for 99-cents might make it increasingly difficult to produce costly episodes (e.g., Lost) in the future. However, we still think that 99-cent rentals are a pretty great sweet spot.

Is it the price point that’s a problem, or is it the ability to pick and choose what shows you’re watching that’s a problem for the industry? As it stands, the studios are making money even if you aren’t watching their shows. You pay a flat fee for your cable, and some of that money goes to Modern Family whether or not you actually watch that particular show, so long as you’re subscribed to that channel. So, it’s no wonder that they’re complaining about 99-cent rentals. They’re worried about all the money they’ve invested in the crappy shows. I’d be worried too if I were them.

But, they lose their credibility immediately once we realize that we can get a lot of shows for free streaming directly from their websites. They’ll argue that it’s a value added product and that most viewers use this feature alongside of their traditional cable packages, but I have to disagree. I know a lot of people who have cancelled cable and instead get their shows from the website directly without paying a single cent. It’s how this generation is doing business, so it’d be smart if the executives could see the signs of the times and do something about it.

Here’s how I’d fix the problem if I was the studio

Screw iTunes rentals entirely. Instead I’d create an app for the iPhone and iPad, much like ABC has already done, but instead of giving it away for free, I’d charge a monthly subscription for the application. Somewhere between $5.00 and $10.00 per month for complete access. Consumers would likely flock to the service because they’d still be saving money on their cable bills, they get video on demand, and they get it in the format they want.

If they really want to stick it to Apple, they could create a web portal for the iPad and iPhone instead of a traditional iOS application, and then no money would find its way into Apple’s coffers. It’s not rocket science here.

There’s a solution to the studios’ problems. They just don’t seem to be looking for it. Instead, their executives keep waxing philosophical about the status quo and complaining about the current situation. Get over it.

Article Via Electronista

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