The studios are reluctant to go for this idea, as they fear that DVD sales would go down. Variety offers the example of NBC’s Heroes DVD. Currently, the DVD retails for $40, while downloading the entire season via iTunes costs $45.77. Apple’s price cur would drive the price down to $22.77, thus making the digital download a much more appealing option.
In the mean time, Apple stresses out that the new price would be a significant boost and digital downloads will more than make up for lost DVD sales.
No doubts about it, Apple needs this price cut and needs it bad. Its new line of iPods revolves around video content and the company knows that cheaper content would drive its hardware sales through the roof. Also, Apple hopes that this would strengthen its position in video downloads market, an area in which Apple hasn’t been able to get a grip on the crown.
Now all the eyes in the industry are on Disney’s ABC, the first network likely to go for the new deal. Apple’s Steve Jobs is on the board of Disney, so this is clearly the best starting point possible.
If Apple pulls it through someone will definitely get fired at NBC. The network left iTunes for Amazon in search of a better price policy, which it apparently got. Should TV episodes get to cost 99 cents per download, NBC will have to halve the prices too and will still be cut off from Apple’s new line o f iPod, a huge source of revenue.