Today’s news that ABC (s DIS) and Ooyala are testing 99-cent video streams for episodes of the ABC Family show 10 Things I Hate About You brings up an interesting question: What is an episode of a popular TV show worth to its viewers?
ABC is trying to sweeten the deal by not only offering new episodes of 10 Things I Hate About You commercial-free, but also establishing a new pay-per-view window: Paying viewers get access to 10 Things the day after it aired on cable. Don’t want to pay? Just wait three more days, and you’re gonna get the whole episode for free, with commercials. That sounds like an interesting proposition — but will it work?
Efforts to get viewers to pay for single TV show episodes have so far only resulted in lackluster returns. The New York Times reported in February that iTunes users have downloaded around 375 million TV show episodes in the four-and-a-half years since Apple (s AAPL) started to peddle TV fare in late 2005. That’s less than 100 million downloads per year, and we don’t even know how many of those have been promotional — that is, free.
Apple’s competition, from Sonic Solution’s (s SNIC) Roxio CinemaNow to Amazon’s (s AMZN) Video On Demand, didn’t seem to do much better: ScreenDigest estimated recently that the entire industry only made $291 million from download-to-own sales and Internet VOD sales of TV shows and movies in 2009.
Compare that with Hulu’s 912 million streams per month, and it becomes clear that consumers have voted against paying $1.99 per TV episode. The question is: Would it help to slash the price in half, a plan that Apple reportedly had for the iPad? And will windows help, or will they drive users of free services back to piracy? Let us know what you think by answering this quick poll, and feel free to elaborate in the comments!
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