Rent a TV episode for 99 cents on iTunes. That possibility is now being considered by industry watchers as the rumor mill gears up for an expected Sept. 1 Apple press event in San Francisco, Calif.
The initial report came Wednesday from Bloomberg News, which cited "three people familiar with the plan." The news service said Apple is in "advanced talks" with News Corp., owner of Fox, as well as with CBS, NBC Universal, and Walt Disney. Apple cofounder and CEO Steve Jobs is a member of the board at Disney and its biggest shareholder. Bloomberg said Fox and the ABC Network, which is owned by Disney, are closer to a deal than the other two major entertainment networks, CBS and NBC.
In the 99-cent rental being discussed, a user could watch a commercial-free program an unlimited number of times within a 48-hour period. New episodes would be available on iTunes within 24 hours of their airing.
As the 600-pound gorilla in the world of online entertainment, an iTunes TV rental service could have a significant impact on the TV industry in general, and on online competitors Netflix, Amazon.com and Hulu in particular. Among other things, it could propel Apple's popular mobile devices -- the iPhone, iPad and iPod touch -- into a favored position as the device of choice for those watching off-air TV.
TV might be the primary theme of the Sept. 1 event, as reports also indicate the company will announce a $99 version of its Apple TV set-top box. Renamed iTV, the new device is expected to essentially be an iPhone 4 adapted for display on TVs.
Van Baker, an analyst with Garter, noted that the "iPad is a very nice device for watching TV content." If iTunes does get 99-cent TV rentals, he said, it could boost the value of Apple's mobile devices as well as the new iTV.
TV a 'Hobby' for Apple
Currently on iTunes, customers can rent or purchase movies, but TV shows can only be purchased. Hulu, Amazon, Netflix, HBO and Comcast, among others, are also trying new online models for TV shows, while Sony, Mitsubishi, Google and others are working to integrate online capabilities into TV sets. In this environment, the entire industry of post-premiere TV series, among other aspects of TV, is undergoing a major transformation.
But that transformation could have significant consequences for the existing TV industry, which makes hundreds of millions of dollars annually from the rebroadcast of TV episodes.
The success of iTunes had a major impact on the music industry, its huge library of App Store applications for the iPhone have helped make smartphones into platforms, and its ventures into e-books, along with Amazon and Barnes & Noble, are affecting the publishing industry.
The TV networks are undoubtedly wary of helping Apple create another ecosystem that could restructure their industry, but if it's inevitable, they may want to get the best deal possible. Jobs said in June that TV is a "hobby" for Apple, but it's doubtful that many TV executives believe that.