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Computerworld Sopranos, HBO shows whack flat-fee pricing on iTunes
It's the end of of pricing hegemony, says analyst
May 13, 2008 (Computerworld) Apple Inc. said today that it is adding episodes from HBO's original programming to its pay-to-view iTunes online store and will charge $1 more than the usual price for some episodes.
Neither Apple or HBO disclosed the financial terms of the deal.
Apple will break from its past pricing structure for content from the Time Warner Inc. division. Although some shows will be priced at the usual $1.99 per download, others -- including the most popular HBO series -- will go for $2.99 each.
Episodes of The Sopranos, Deadwood and Rome cost $2.99 per episode, Apple said today, while the remainder, including The Wire, Flight of the Conchords, and Sex and the City are $1.99 each, the usual per-download fee for television shows.
All but Flight of the Conchords have ended their runs on the pay TV channel. ITunes is not immediately carrying the entire backlist of each show, either; only the first season of The Wire is available on iTunes as of Tuesday, for instance. The show recently wrapped up its fifth season.
ITunes will also sell complete seasons of the HBO series, as it does with many other television shows, although not necessarily at a cost savings. The first season of Deadwood, for example, lists for $35.88, the same price paid out for the 12 episodes on a per-download basis.
The two-price structure of the HBO content is a first for Apple, said Aram Sinnreich, a media analyst at Radar Research. The only time Apple has made a similar move, he said, was when it broke with the $0.99-per-track pricing for music by charging $1.29 per track for tunes not protected by digital rights management (DRM) anticopying technology.
"And even that got reversed," Sinnreich said. Apple dropped DRM-free prices -- it had dubbed those tracks part of "iTunes Plus" -- last October to match the 99-cent fee charged for all other tunes.
"I think the variable pricing shows what a weakened strategic position Apple is in regarding the content providers, and how high-demand and high-value HBO's content is," said Sinnreich.
By splitting HBO's shows between two prices, Sinnreich said, Apple opens the door for other content makers to demand higher prices. "Some of the other content providers who might have had less leverage earlier can now point to HBO and say, 'What about us?'" said Sinnreich.
"This is the beginning of the end of Apple's ability to unilaterally set prices," he added.
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