The Big News From Apple's Let's Rock Event: Variable iTS Pricing

It's been widely noted that the Let's Rock event Tuesday met expectations but certainly didn't excite Apple fans and followers. I have to agree, coming to the conclusion that standard iPods will not make any great leaps forward until they join the Touch lineup. I expect maybe next fall there will be a Nano Touch and perhaps an even smaller Touch in the future the size of the Shuffle. After that, it turns into jewelry.

Since I am not in the new iPod market, the most important news that grabs my attention is that NBC has negotiated a $.99 price for older shows, or "catalog" shows. Yes, there is also new $2.99 pricing for HD-ish shows and and a new spotlight on custom prices for groups of shows. But it's the breaking down the minimum price that is the key here.

Here's the reason our family doesn't cancel our cable and buy an AppleTV: Many of the shows we watch are not available at the iTunes Store, and even of they were, I would not pay $1.99 for them.

I am fine with paying $1.99 for CSI or Battlestar Galactica knowing these are high budget shows that depend on many creative people doing their best work. But what about all the reality based shows, especially the ones on cable channels?

For instance, my wife will record a handful of different shows on HGTV (Home and Garden), and just watch the last 6 minutes of the show to see the results. My kids will watch a dozen different shows of dubious quality. And I try to catch all the new Daily Shows and Colbert Reports, but they are just 20 minutes of semi-scripted TV.

There is NO way I'm paying $1.99 for these. The Daily Show and Colbert Report have figured that out and have offered reduced pricing by subscription. But more needs to be done.

Now what if HGTV could offer Design to Sell for $.25? That would make sense. How about $.99 for a new 30 minute sitcom? What about $.50 for The Daily Show? Now we are on to something.

I think it was smart on Apple's part to set the price in the public's mind for a TV show (particularly the scripted 1 hour dramas) at $1.99. Now we have a benchmark for the value of video. It's time to take the next step to variable pricing to let the market expand to bring in all types of shows. This is when the AppleTV becomes viable as a cable replacement. I know Apple talks of the AppleTV being a DVD player replacement, but the lines between videos, TV and feature films are too blurred these days to draw the line anymore. And that trend will only increase.

Here's the issue I think Steve Jobs hasn't come to terms with: Television programming spans a wide spectrum of quality and value. Wider than even music. If Steve is anything like his public persona, he probably doesn't "get" TV. Until he does, or delegates the job to someone who does, the AppleTV and the TV programming in the iTS will be crippled and never reach the place in the market that iPods, iPhones and Macs have.

I don't think either NBC or Apple won in this negotiation, but I think we consumers will win because of it.


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