Apple's 99-cent TV episode rental plan creates rift among networks

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Keeping score? Better make sure you have an eraser when you tally up what networks are willing to participate in Apple's 99-cent rental of TV episodes trough its iTunes storefront as this weeks Goldman Sachs Communacopia showed that there's likely to be plenty of movement in the new offering that Apple rolled out this month in concert with its Apple TV revamp.

Among the four big networks, Disney's ABC and News Corp.'s FOX networks have committed to allowing Apple to make episodes of their TV programs available for rent for the 99-cent price that Apple believes will make video rental take off like music downloading has.

Disney-of which Apple CEO Steve Jobs is a the largest shareholder and a board member-appears to be in it for the long run after jumping onto the initiative at launch. Disney CEO Robert Iger said the company decided five years ago "that we would be much better off aligning with technology companies than fighting them. We concluded then-and we would reach the same conclusion today-that you can't will technology away. It is real. It's here."

News Corp., too, announced its participation at launch, but with the caveat that it might not stay for long. COO Chase Carey has said several times that he views the network's participation as a test and that it will be evaluated after several months.

NBC Universal CEO Jeff Zucker has essentially dismissed the 99-cent rental plan, saying the price is just too low and devalues content. Don't expect that to change anytime in the near future.

CBS, whose chief executive Les Moonves earlier this year dissed Hulu-the online video catch up site owned jointly by News Corp., Disney and NBCU--as bringing in "pennies" to the network for its content, is on the fence about Apple's rental plan.

"What we said to them-and the Apple guys are terrific and obviously the application is terrific-is let us see what happens," Moonves said. "There are two networks in and two networks not in. Let's see what happens and maybe we'll talk again in January, maybe we'll talk again next year."

Viacom and Warner Bros. both have taken the position that at 99 cents, they're not hoping onboard just yet.

Last week, Warner Bros. CEO Barry Meyer said, "We just don't think the value proposition is a good one for us," adding that the company didn't like the idea of opening up "a rental business in television at a low price."

Viacom CEO Phillipe Dauman was more succinct: "It doesn't work for us."

Stay tuned.

For more:
- see this Wall Street Journal article

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