With iTunes Consumers Ponder Ditching Cable

Apple wants to lower the cost of a single TV episode on iTunes from the current $1.99 to 99 cents. Consumers are beginning to ask why they're paying so much for cable, when they could just buy the few shows they actually watch a la carte via iTunes.

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STEVE INSKEEP, host:

Once you've got your fancy new TV and you're ready to download a movie or your favorite TV show, you face the question of how much you will pay. Apple is shaking up the media world with plans to cut the price it charges for network TV shows sold through iTunes.

Here's NPR's Richard Gonzales.

RICHARD GONZALES: The first shoe to drop came last week when CBS said it may offer shows as a test for $.99 per episode. They currently go for a buck 99 on iTunes. But other network execs are reportedly skeptical. Michael McGuire, a media analyst at Gartner Research, says TV bosses are having to weigh the value of their content and the size of the iTunes customer base.

Mr. MICHAEL MCGUIRE (Gardner Research): There is a pretty big number Apple has in its favor: over 100, 150 million active credit cards on account.

GONZALES: Among the questions currently up for debate, how does a $.99 per episode price structure pay for actors, writers, and directors? And how many consumers will pay for a TV program they can already stream for free, although with commercials, on sites like Hulu? On the other hand, says McGuire, it's unclear how many viewers will pay for cable if prices drop.

Mr. MCGUIRE: As broadband penetration increases, I think you're going to see more and more consumers looking at their pay-TV bills and saying, yes, I have 600 channels, but I really only watch five or 10. Can I just pay for the five or 10?

GONZALES: And McGuire says that's when the older distribution models like network and cable TV begin to show their age.

Richard Gonzales, NPR News.

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