Peter Kafka

Recent Posts by Peter Kafka

Apple Pulls the Plug on TV Rentals

Last year, Apple pushed hard to get the TV networks to rent their shows at cut-rate pricing through its iTune store. Now it has bailed on TV show rentals altogether.

Apple has completely removed customers’ ability to rent shows from iTunes; the remaining options are to buy individual episodes or in some cases a “Season Pass” for a year’s worth of shows.

This doesn’t come as a huge shock, as by all accounts few customers have been interested in rentals, even after ABC and Fox dropped the prices on some of their episodes from $1.99 to 99 cents nearly a year ago.

And Apple has recently given customers the ability to watch shows they purchased via iTunes any time they want, on any Apple device, by streaming it from its “iTunes in the Cloud” service.

“iTunes customers have shown they overwhelmingly prefer buying TV shows,” Apple spokesman Tom Neumayr said. “iTunes in the Cloud lets customers download and watch their past TV purchases from their iOS devices, Apple TV, Mac or PC allowing them to enjoy their programming whenever and however they choose.”

A statement from Fox (which like this Web site is owned by News Corp.) suggests that the studio was no longer interested in rentals, either: “After carefully considering the results of the rental trial, it became clear that content ownership is a more attractive long-term value proposition both for iTunes customers and for our business. To further enhance the value of ownership, we are working with Apple to make content available within their new cloud-based service.”

If customers have proven resistant to the idea of rentals instead of purchases, the TV networks and studios have always taken that stance.

Former Apple CEO Steve Jobs and his lieutenants worked hard throughout 2010 to get studios on board with the idea of cutting their rental prices to spur more transactions. But in the end Apple was only able to get two major partners to sign up: Disney, where Jobs is on the board of directors and is the company’s largest individual shareholder, and News Corp., which at the time was working closely with Apple to launch The Daily iPad newspaper.

But Jobs had insisted that pricing was the key to increasing content consumption, and that if his partners would charge less, he could help them sell a whole lot more. “Price it aggressively and go for volume,” he said in an onstage interview at the D: All Things Digital conference in June 2010.

Right now the TV business seems to be going the other way. Here’s what your options looked like yesterday if you wanted to pay for an episode of last season’s “Simpsons” on iTunes:

And here’s what it looks like today:


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