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TV Networks Not Keen on Apple's $0.99 Rentals

When Steve Jobs showcased the new iPod products and the revamped Apple TV, some of us were excited over the promise of $0.99 TV show rentals. Walt Disney Co.'s ABC and News Corp's Fox were listed to bring their popular shows to the table including "Glee" and "Modern Family." However apparently other networks are reportedly not too keen on the $0.99 idea.

According to several media executives, Apple's terms are somewhat of a turn-off, demanding 30-percent of the rental fee. Currently consumers can download episodes for $1.99 and $2.99, a far better profit networks are unwilling to relinquish.

One executive said Steve Jobs believes that networks will "sell more stuff" if the price point is lowered. "This is a plan that is designed to sell iPads, iPods and iPhones," another executive reportedly said. "It is not a plan that is designed to appropriately value content."

Media companies fear that they will suffer the same fate as the music industry, struggling to cope with declining price points. There are also fears that the "episodic pay-per-view model" will further undermine DVD sales--currently the industry is making a huge profit off boxed sets of individual TV show seasons.

Bottom line, networks may fear that the iTunes consumer who previously bought TV episodes to watch only once may be inclined to merely rent the show. That's less money in the network's pocket, especially if Apple is demanding 30-percent of the rental fee.