Apple Begins to Succumb to Entertainment Industry Demands

May 14th, 2008

When the iTunes Music Store (that’s before they added movies and TV shows) first appeared, the pricing structure was absolutely rigid. Steve Jobs, they said, was obsessive about simplicity, witness the fairly limited Mac lineup since he took over Apple. So it would be now and forever 99 cents per song. When TV shows were added, it was $1.99 per episode.

Sure, there was some flexibility in album pricing, but you get the picture.

However, the entertainment industry, probably caught offguard by the tremendous success of iTunes, wanted more control on their product would be priced. When it came to singles, hits should be more expensive, and older catalog, songs that were no longer in demand, would be cheaper. Certainly one of the key reasons for Apple’s squabble with NBC/Universal was, at least in part, over multi-tier pricing.

However, even Steve Jobs, despite his great charisma and famously sharp negotiating skills, couldn’t hold sway over the entertainment bigwigs forever, and something had to give. The first crack in the dam was the iTunes movie rental program, where you had 30 days to begin viewing a flick, and 24 hours to finish, with a single exception. If you began watching the movie and the self-destruct clock struck, you’d OK a prompt to continue watching to the very end. But you wouldn’t be able to pause the movie without having to rent it all over again.

In general, essentially the same rental policy is prevalent throughout the industry, so Apple really isn’t inconveniencing you any more than any other movie download service. Indeed, I suppose you can call that flexibility, after a fashion. I call it stupid, but that’s just me.

For a brief period of time, DRM-free music was $1.29 per track, but that price was reduced, so everything is the very same 99 cents regardless. When it comes to buying a movie, you pay one price for new releases, usually $14.99 (I don’t know of any exceptions, but I’m being cautious here) and $9.99 for older product.

Then came HBO and its compelling catalog of original programming, which includes “The Sopranos” and “Sex and the City.” Again, we have a variable price policy when you buy a single episode. The former is $2.99, and the latter is $1.99. I won’t comment on the relative worth of these two shows, except to suggest that the former is probably more of a cult show, and hence more in demand. But with a movie version of the latter coming to a theater near you this month, I’d think the latter perhaps deserves a similar pricing policy, but then what do I know?

Now that some NBC shows are showing up on iTunes UK in two price categories, you can bet that Apple has begun to face the music and will be following suit in the U.S. very shortly. In fact, I wouldn’t be surprised to read a press release about the return of “Heroes” and other popular shows in the very near future.

Of course, it is also true that iTunes recently became the number one music retailer in this country. Their movie and TV catalog is sadly deficient, though, and if Apple has to make a few concessions with entertainment industry executives along the way so that you and I spend a little more money for the titles we want, so be it. Besides, I don’t think most people will mind having to pay different prices for different content. When was the last time you saw flat-rate DVD pricing at your local electronics store? See what I mean?

However, unlike Microsoft, you aren’t seeing more stringent DRM on iTunes, nor do I expect that to happen in our lifetime. In fact, aI fully expect that there will be more DRM-free music available in the very new future; it’s way overdue. That will not, however, happen with movies and TV shows, despite widespread piracy. The industry executives are far too paranoid and do not understand that the public will embrace legitimate media downloads if the restrictions do not seriously inhibit their ability to enjoy their favorites.

I can well believe that Steve Jobs was telling the truth when he said last year that Apple only instituted its FairPlay DRM system as a concession to get the music industry to release their catalogs to iTunes. An industry that is busy suing its customers for alleged copyright infringement isn’t going to relish giving away stuff without restrictions.

In a sense, the entertainment industry created its own monster, and needed Steve Jobs to rescue them from their folly. They have never been able to understand that most people are basically honest, and they do not spend the largest portion of their leisure time trolling for pirated product on peer-to-peer download sites. Sure, a lot of people will, just as you can visit many Third World countries on this planet and find a rich selection of pirated DVDs months before the official versions are released. That situation isn’t going to change, although I can see where taking action against large criminal organizations would help somewhat.

In the end, the industry has to you want to buy their stuff, and that means doing so in a friendly, relaxed atmosphere that gives you a fairly decent amount of freedom to copy to a variety of media and make backups in case the original goes bad.

But right now, they’re probably figuring how to soak you once again when digital versions of The Beatles catalog is released. I mean how many times do they expect you to buy the same stuff, even if the product is terrific? The more the merrier, it seems. They need to finance their fancy cars, yachts and the other accoutrements of an extravagant life style, right?

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3 Responses to “Apple Begins to Succumb to Entertainment Industry Demands”

  1. Joe S says:

    “In a sense, the entertainment industry created its own monster, and needed Steve Jobs to rescue them from their folly. They have never been able to understand that most people are basically honest, and they do not spend the largest portion of their leisure time trolling for pirated product on peer-to-peer download sites.”

    The record companies have to be one of the most throughly dishonest bunch of loan sharks outside of the mafia. I have talked to musicians and if you think they treat their customers like trash, they treat their artists much worse. No wonder they do not believe in honest people.

    Also, all this change does is charging more for hour shows than half hour shows. The majors do not produce many hour long shows any more.

  2. Excuse me, but dramatic shows are usually one hour (or 45-50 minutes without ads) and sitcoms are 30 minutes (minus the ads).

    What am I missing here?


  3. Jon says:

    Although I doubt Jobs was directly involved in the HBO negotiations, the deal probably hinged on his acceptance of it. Since Jobs is a man of long term vision, Apple’s acquiescense of the terms probably has a long term goal.

    Get the studios into iTunes, grow the marketshare so the studios are receiving a significant amount of income from it (too much to let go), then when things are up for renegotiation, get the studios to concede to Apple.

    Concede now, dictate later.

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