Everyone was happy to hear that the AppleTV was losing a bit of cost, as it was hard to justify getting one before with the features it offered. Now, however, it’s a much better deal (some disagree) and even my skeptical self is tempted. But whence this discount? The margins are as thin as the skin on my teeth.
Computerworld speculates that since the discount did not extend to the UK and only partially to France, where licensing and fees-for-services are different, that Apple must have fought for an agreement with North American movie biggies to get a slice of every rental in addition to having access to their library.
They run a hard bargain, as AT&T and Cisco can tell you, and it seems likely that something like this is the case. Take a buck off every rental? If someone rents one a week, the discount will pay for itself in a little over a year. Well played, Apple, well played.
Is Apple subsidizing the $70 Apple TV price reduction by taking a cut of movie rentals? [ComputerWorld]
The thought had never crossed my mind that Apple *wouldn’t* be taking a cut of movie rentals. They take a cut on iTMS sales, why would they not on rentals?
Also, not only does it explain the price drop, but it also explains why the ‘Take 2′ was a free software update. You had to pay for the iPhone and Touch updates – but the Apple TV one was free – why was that? Because the Apple TV one opens up a new revenue stream for Apple, it will make them money, so they want people to install it.
Yeah, it really seems logical to do it… but I’m guessing they had to twist everyone’s arms pretty hard in order to get an agreement that worked for them enough that they could drop the cost so much.