If you want to own Glee episodes at a cut-rate price, better get your Amazon (NSDQ: AMZN) downloads fast. The e-tailer is countering Apple’s 99-cent rentals from ABC (NYSE: DIS) and Fox by selling some TV episodes at a loss. Amazon still has to pay the contracted rates for electronic sell-throughs (EST), according to sources familiar with the situation, and the networks still have deals with Amazon, Apple (NSDQ: AAPL) and other distributors that make a switch to 99-cent EST as the rule highly unlikely anytime soon. One source described the price-slashing as a “big loss” although the actual number depends on how many take advantage — and how long Amazon sticks with the lower rate.
The sale is grabbing attention for Amazon on a day that was orchestrated by Apple but it may cost in other ways. At 99 cents an episode, Glee is cheaper to download to own than it is to buy the whole season on DVD. The list price for the DVD due on Sept. 14 is $59.98; the Amazon price is $35.49 for standard. The download price is roughly $21.78 — and you can get it right now. Amazon is advertising the individual downloads with a 1-click season purchase right below the DVD pre-order pitch.
Apple’s rental plan went into effect with the launch of iTunes 10 late Wednesday, putting the two head to head for now. The difference: The new Apple TV comes out next month while users of Amazon’s TV and set-top partners can advantage now. The problem for Amazon: People locked into the Apple ecosystem aren’t suddenly going to opt out for Amazon VOD. What it needs to do is convince the undecided it’s a legit alternative to a nifty little black box with less content. Meanwhile, Glee is selling on iTunes for $39.99 for the season; $49.99 in HD.
Is Amazon simply is looking for attention, trying to make a point with Disney, News Corp (NSDQ: NWS) and any studio or network that might consider joining them down the road — or hoping to make a point to consumers about alternatives already being out there? The company has been hinting at a possible web-based subscription a la Netflix (NSDQ: NFLX) or Hulu Plus. Maybe it’s doing a favor for partners like Roku and Tivo. Whatever the answer, it’s hard to tell right now if this is a strategy or a stunt. Get ‘em while it lasts.