Blog Post

Could Cheap iTunes Rentals Change Television Online?

During today’s press event, Apple (s AAPL) CEO Steve Jobs announced that 450 million TV episodes, along with 11.7 billion songs, 100 million movies and 35 million books, have been downloaded from the iTunes store, making it the number one digital media store in the world. How will its newly announced 99-cent rental program change the marketplace? It depends what’s on offer.

When we compared Hulu Plus to Netflix (s NFLX) Instant during its launch, we found while the back catalog was comparable, Hulu Plus had Netflix easily beat when it came to new episodes of current shows. Apple’s rental program, though, draws from a larger pool of content, which could be a game changer.

Note the use of the word “could” here. Jobs announced that so far, only ABC (s DIS) and Fox (s NWS) have signed up for the 99-cent rental program. While we don’t yet know what specific shows will or won’t be available for 99 cents, based purely on studio, the below chart indicates that about a third of the content Hulu Plus is offering this fall won’t be available for rental on iTunes.

24 Yes
30 Rock No
American Dad! Yes
Bones Yes
Brothers & Sisters Yes
Castle Yes
Cougar Town Yes
Dancing With The Stars Yes
Desperate Housewives Yes
Family Guy Yes
Find My Family Yes
Friday Night Lights No
Glee Yes
Grey’s Anatomy Yes
House Yes
Jamie Oliver’s Food Revolution Yes
Late Night with Jimmy Fallon No
Law & Order: Special Victims Unit No
Lie To Me Yes
Minute to Win It No
Modern Family Yes
Parenthood No
Parks and Recreation No
Private Practice Yes
Saturday Night Live No
Shark Tank Yes
Supernanny Yes
The Biggest Loser No
The Cleveland Show Yes
The Good Guys Yes
The Office No
The Tonight Show with Jay Leno No

NBC (s GE) is clearly the missing link here, and if it decides to participate in the future, that would put Hulu Plus and iTunes on par with each other. Of course, you can’t necessarily compare a subscription service to a per-item rental service; for the $10 a month I pay for Hulu Plus (which, without shelling out $99 for an Apple TV, I can watch on my television thanks to the PS3), I have unlimited access to the service’s catalog of content.

That definitely works in Hulu Plus’s favor. When the new fall season starts, for example, I’ll be watching the theoretically rentable Castle, Glee, House and Modern Family on a weekly basis. If I were renting them a la carte from iTunes, in a month when each show premiered three new episodes I’d spend $11.88 to keep caught up, and if I wanted to review them after 48 hours, I’d have to plop down another 99 cents each. Compared to Hulu Plus, that’s not a great way to spend my money (even with the commercial-free video Apple provides).

The deal breaker here is that the iTunes catalog extends well beyond ABC and Fox, thanks to its relationships with pretty much every major TV network and studio. If cable or premium channels like AMC (s cvc), HBO (s twx) or Showtime (s cbs) — which do currently sell episodes via iTunes — join the rental program, it could be a very different marketplace indeed.

Frankly, Mad Men is half the reason I still have a cable subscription, which currently costs me $100/month. If I could rent the weekly misadventures of Don Draper for 99 cents each, that’d leave me about $96 a month in savings, which I’d find much easier to use towards a la carte rentals and purchases for series and movies not available through subscription services like Netflix and Hulu Plus.

In short: The iTunes rental program might not make me rethink my Hulu Plus subscription, but if more content providers get on board, it could make me rethink cable.

Related GigaOm Pro Content (subscription required): Three Reasons Over-The-Top TV Apps Will Beat Big-Cable

28 Responses to “Could Cheap iTunes Rentals Change Television Online?”

  1. Mad Men is available for purchase from iTunes for $1.99 an episode, SD. Buy them and save $92 off your cable bill, if that’s the reason you’re still wired to cable.

    I tried HuluPlus+, specifically for the iPad. I canceled the preview subscription after one day. HuluPlus+ still has commercials AND the iPad version does not carry the complete collection you get watching HuluPlus+ on your computer. (The series Picket Fences has two full seasons if watched via your computer, just the Pilot and the second season through the iPad app.) I’ll stick to my Tivo and iTunes.

  2. One major limitation with the Netflix and Apple iTunes store is that the large majority of quality content is only available to those living in the USA.

    Netflix is available to those in the USA (But for those abroad, you can get a US IP address with a VPN service)

    Also, if you are abroad it can be challenging to setup a US ITunes account without a US credit card.

    Yet I did find a work around solution for accessing the the iTunes US from abroad by using iTunes Gift Cards at

    I don’t understand why Netflix, Apple and the media companies don’t just let people have worldwide access to media…wouldn’t it mean more profits for them?!?

  3. Charlotte

    You know you can just pay $24 to own the current season of Mad Men through iTunes without paying $100/month for cable, right? Assuming the season is 3 months (it’s 12 episodes), that would leave you with $276 to spend elsewhere.

  4. One of the key differences between the two services is availability. As far as I’m aware, Hulu is only available in the United States. There’s at least one or two people outside of the US who speak English and would like to watch US television.;) In a few weeks, count me in as one of them. Hulu is totally blocked in South Korea, which isn’t the case with the iTunes store.

  5. Who is there right mind would pay $.99 to rent a single show? The idea is made even more absurd when you consider there are things like Hulu, Hulu Plus, Netflix and the World Wide Web out there, which range in price from nothing to almost nothing comparatively?

    The only purpose I can see for this silly service is to watch something you missed on TV, if you can not find it on Netflix or Hulu Plus.

    • I completely agree. 99 cents to rent an episode? This doesn’t make sense especially given that networks rebroadcast an episode 1 or 2 more times before the new one. This will probably fail and should be replaced with a subscription service such as to a network for an entire season (not just one series but all of them).

  6. Yeah, but HULU will offer it’s app via ios platform that AppleTV will have access to. So AppleTV will have all of the content HULU has to offer once you buy and subscribe to it. AppleTV box becomes the defacto online bridge to entertainment content that Roku won’t be able to match. Boxee better figure out a unique strategy or it’s done.