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Comment by ctdonath | Hacker News Reader

AppleTV.

'nuf said.

OK, so it doesn't have everything yet, but between that & Netflix there's more than enough to keep most satisfied, and more content is always being added. And you don't have to enter your CC# more than once. Funny, Apple is making crazy money by offering customers the best implementation of what you want, rather than cutting them off...

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If by "AppleTV" you mean the iTunes Store (since AppleTV does not provide its own content), you have to be joking. No wonder the content companies are most friendly to that place — it makes their old distribution channels look downright cheap. Three episodes of "Whitney" costs as much as a month's subscription to Netflix.

Perhaps this is the problem.

Does content have inherently lower value now that it is abundant, and distributed for (nearly) free?

If content providers charged say, (cost of bandwidth)+10%, for each item rather than arbitrary whole-dollar prices, they would certainly see more takers--and perhaps higher profit.

I don't think cost-based pricing is the answer. Cost-based pricing is almost never the answer unless you're a charity, and it creates some really perverse incentives for the producer (for example, if I'm running my web service as cost-plus, it's in my interest to buy gold-plated servers cooled by ice hauled in from Antarctica — 10% of that is a lot more than 10% of $200). I do think the value of entertainment has dropped as the supply has ballooned. The problem is basically just that they're stubborn as a mule and refuse to seriously compete in the market that exists today. They want to keep things the way they were, and if you ask for something else, they'd rather just take their ball and go home than negotiate. And I mean, that's their right, but when they do that, they are really the ones who are undermining their business model.

Quite right about the perverse side of cost-plus pricing.

You're comparing purchase with subscription.

Supply and demand. You're paying that for "Whitney" because three episodes is worth more to you than a month's subscription to Netflix.

For some, a flat-rate cable TV subscription is cost effective. For others (me), Netflix + iTunes is a lot less - and yes that includes impulsive $5 rentals; some of us just don't watch that much TV and don't demand the latest high-profile network shows when we do (BTW: what's "Whitney"?).

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