Apple has announced it will carry programming from HBO on its popular iTunes download service. Getting shows like The Sopranos, Sex and the City and The Wire online presents a lot of opportunity for HBO. But the pricing model signals big change.
Digital Journal, Op-Ed -- Apple says its iTunes service is the most popular online TV store, with more than 150 million television episodes sold and a catalog of more than 800 shows (20,000+ episodes).
So now that Apple has announced a deal with HBO to get its content on iTunes, it's not doubt both companies are eager to watch their new money tree bear fruit.
“We’re thrilled to bring this incredible lineup of programming from HBO to the iTunes Store,” said Eddy Cue, Apple’s vice president of iTunes. “These are some of the most talked about television shows ever, as well as some of the most requested by our customers.”
Indeed, HBO offers a lot of high-quality, original programming. Having the ability to get it online to Apple's massive iTunes audience is a great opportunity for all parties involved; TV fans, HBO and Apple. With flicks like
Sex and the City: The Movie hitting theatres on May 30, having the ability to download and watch all 94 episodes from six seasons ahead of time is a great feature. If you like the show, of course.
An HBO-Apple deal is a partnership between two titans, but that deal also comes with potential problems for Apple if it doesn't look far enough across its bow into the future. Case in point: Apple caved to HBO on the pricing model and it could come back to mess up the company like an angry Tony Soprano.
In the deal with HBO, shows like
Sex and the City and
Flight of the Conchords will cost $1.99 per episode through iTunes. This is the standard price for individual TV shows on iTunes. However, other shows like
The Sopranos or
Deadwood will come with a premium sticker price of $2.99 per episode.
The tiered pricing model is a huge change for Apple, as the company has been famous for forcing studios and TV companies to sell content at one flat price. While the $1 difference might not make or break sales, it could put Apple in a horrible position in the industry; the day it signed a deal with HBO might go down in history as the day it tripped over its corporate feet and fell on its face.
iTunes carries movies, TV shows and music from many different creators, labels, studios, producers and companies who have all bowed down to Apple and agreed to a standard low price. Apple CEO Steve Jobs is known to be a big advocate of standard pricing and has always said charging more for premium content could get out of hand quickly.
So now that Apple is offering tiered pricing for premium content, the company could see everyone and her brother line up at the door to demand the same agreement. The first company that could come knocking is NBC Universal; the company pulled its content from iTunes last year over this very subject. So why did Apple give HBO the right to charge two different prices, but not NBC Universal?
Apple has a lot of clout with its iTunes service, but it's also only as good as its content. Apple has opened the floodgate for change by breaking its own corporate practice just once.
Tiered service for downloaded content is likely the way of the future, and it's not unforeseeable to see movies that are still in theatres get downloaded via the Internet (for a hefty price, no doubt).
The entire rental market can and likely will change to downloaded content, but allowing tiered pricing for some and not others is going to push Apple into dangerous territory.
Apple-HBO Deal Raises Red Flags and Signals Major Change For iTunes Pricing
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