According to three people familiar with the proposal, Apple has told networks and studios that it would like to slash the cost of most TV episodes sold via iTunes from the current $1.99 to just 99¢ -- the same as what Apple charges for most music singles.
Apple argues that the studios would end up making more money with an increase in volume of sales, but the studios haven't been convinced. One concern raised is that potential impact these prices would have on DVD sales which have traditionally been an important source of revenue for the studios.
Case in point: NBC Universal just released "Heroes" on DVD, with most retail outlets charging about $40 for the set of 23 episodes. If Apple had its way, the same set of episodes would cost less than $23, potentially making the DVD -- despite its myriad bonus features -- less appealing to consumers.
According to insiders, while skeptical of the plan, the studios have not rejected it outright, and acknowledge that "library titles" of older content may make more sense at the lower price. Historically, however, Apple has been insistent on consistent pricing across the board.
Why don't they get that it doesn't cost the studios ANYTHING to sell on iTunes! NOTHING .... NADA! It's all profit! No DVD costs, no box printing costs, no bandwidth for the downloads ... NOTHING! That is the difference in price! I can almost assure you that all that fancy packaging and all those bonus features cost a lot to produce and to distribute.
Besides ... I'm too lazy to get up and go buy a DVD. I'll either Neflix it, stumble upon it, be gifted it, or download it.