What Should Video Cost?

I feel a little sorry for the people at bigtime TV and movie companies who have to decide what to charge for their product, because from the outside it really does look like they have no clue what their intellectual property is worth anymore. Maybe some of this confusion results from different groups in the same company making pricing decisions about selling the exact same thing through different channels like DVDs, pay-per-view cable, premium channels, and streaming video over the Internet. The northeastern tentacle doesn’t know what the south-south-east tentacle is doing. And let’s not even think about what the north and south tentacles are up to…

I’ll give you an example. I’ve never seen a single episode of 30 Rock, but I keep seeing references to it on the Internet (Reddit especially). I therefore decided I’d like to give it a try, watch a few episodes, and see if I liked it. I’m still aghast at how screwed up the pricing for this one show is. Let’s just talk about the first season, to keep things sort-of simple. The list price of the boxed set of season one DVDs of 30 Rock is $39.98. Amazon sells it for $10.49, which isn’t bad until you consider that this probably isn’t one of those shows I’m going to watch over and over again, in which case how about let’s buy a used copy from Amazon? A used set is one dollar plus four dollars for shipping, which brings the first season of 30 Rock to your door for five big dollars.

Okay, now consider the idea that if you’re not going to watch it a bunch of times and treasure it and memorize every line of dialogue and then go cosplay Liz Lemon at your local comic book convention, it seems wasteful to clutter the world with more plastic crap in the form of DVDs, packaging, et cetera — so let’s stream the thing from Amazon. I’ve got Amazon Prime. A lot of TV shows and movies are free or very cheap to buy or rent in streaming form. Season one of 30 Rock costs $1.99 per episode, which doesn’t look that bad until you realize the season has 21 episodes and so if you bought them all that way, it would cost over forty dollars. They do give you a price break if you buy the whole season at once: $34.99, which is still more than three times the price of a brand new set of the DVDs, and if you consider I really should have put scare quotes around the word “buy” when I talked about streaming video — because you’re not really buying anything tangible when you purchase a show via streaming video — you’re buying the right to look at a show over the Internet as many times as you can before the streaming company goes out of business or changes the rules of their streaming service or whatever happens eventually to make it unavailable anymore via that distribution model. If you buy the DVDs, they’re yours, right there on the shelf next to Firefly, and you’re not dependent on Amazon’s indefinite goodwill towards its customers over long stretches of time.

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And that’s not the whole story. If you have Netflix, you can gorge yourself on every episode of 30 Rock, beginning to end, for a flat rate of eight bucks a month, in addition to anything else you might want to watch from Netflix’s catalogue.

I just really don’t envy the people who have to stick prices on media these days. The landscape is too confusing. It will be interesting to see how these pricing models shake out in the future.

How do you think media’s going to be priced, say ten years from now? Will it be dominated by Netflix’s all-you-can-eat model or will Amazon’s pricing structure win out — or will it just continue to be a giant mess?