If Apple cut the price of each TV episode in half — to 99 cents, from $1.99 — would sales on iTunes increase enough to offset the price drop?
Experiments in the United States are under way to find out, and the head of the No. 1 U.S. television network, CBS, indicated last week that some shows, at least, would be priced at less than a dollar in the future.
Apple wants to ignite TV show sales, especially as it prepares to introduce the iPad tablet computer next month. But its proposals to lower prices across the board are being met by skepticism from the major U.S. networks.
Television production is expensive, and the networks are wary of selling shows too cheaply. They are equally wary of harming their far more lucrative deals with affiliates and cable distributors, who may feel threatened by online storefronts like Apple’s and those operated by Amazon, Microsoft and Sony.
But the networks do not want to ignore the 125 million customers with credit cards who have iTunes accounts, either. “We’re willing to try anything, but the key word is ‘try,”‘ said a TV network executive who requested anonymity because his company had declined to comment publicly on talks with Apple.
With the iTunes pricing debate, the television industry is facing the same question that music labels and publishers are: Just how much is our content worth in a digital world?
It is especially complicated for TV, given that most people already pay for TV through their cable or satellite services and that they can watch most network shows free on streaming sites like Hulu, albeit with advertisements.
The notion of selling individual TV episodes straight to the consumer is still a relatively new one. Apple added video to its music store in late 2005 and sold episodes of the ABC shows…