Now that Apple are commited to giving iPad users TV Episodes at $1 per download, will this force the rest of the industry to follow suit? It looks like it will as the chief of CBS has  indicated that they will provide some downloads at under a dollar too.

A report in the NYTimes says that the big networks are very wary of any price drops, but they also want in on the 125 million Apple customers as well. And with the iPad gearing up for launch, they want in on the action from day one.

Creating and producing tv content doesnt come cheap and the networks a) dont want to sell cheap as theres no way back up once the price drops, and b) they have the money making cable distributors who are already under threat with cord cutters jumping across to online video downloads from Apple and Amazon amongst others.

But the networks do not want to ignore the 125 million customers with credit cards who have iTunes accounts, either. “We’re willing to try anything, but the key word is ‘try,’ ” said a TV network executive who requested anonymity because his company had declined to comment publicly on talks with Apple.

The television industry is having to look itself in the mirror as the music industry did before, and ask itself – how much is a digital download really worth? Especially considering the majority of consumers already have a cable or satellite service and also can watch internet tv for free on streaming sites such as Hulu.

Analysts say the TV revenue from iTunes has been marginal for producers and distributors. However in a threat to cable, Apple has proposed to some networks that the store sell a subscription package of popular TV shows. Although Apple has been given short shrift by some networks, the idea is still floating around.

The feeling is that to turn iTunes from a music store to a tv store requires the drastic pricing structure. In conversations with networks, Apple representatives have cited 99 cents as the magic price point that brought digital music sales into the mainstream. The company says the same price could propel TV sales, according to the network executives.

“If you took five things at Wal-Mart and sold them for a nickel, they’d sell really well, because they’d stand out. But if you took everything in the store and made it a nickel, nothing stands out anymore. Essentially all you’ve done is lowered the value of your content,” said a senior executive at a TV network owner.

Mr. Mitchelson said prices under a dollar were “very appealing to the consumer,” and he said the key for Apple was, “Can you draw in this huge swath of folks who aren’t using iTunes at all to purchase TV shows?”

Although selling single TV episodes is still a pretty new concept, Apple are the one company that have it down to a fine art after using the service on the iphone and Apple TV store. However up until now there has been a strict $1.99 price for episodes. If you look at the app store though, there are thousands available that sell every day for around the magic dollar mark, so maybe they are onto something.

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