Time Warner (TWX) pay channel HBO has managed to crack Steve Jobs’ stranglehold on iTunes pricing. Sources tell Portfolio that Time Warner is set to announce an iTunes deal for HBO that gives it what other content partners have longed for, but never got — the ability to sell its stuff at different prices.
HBO sources say the new deal, set to be announced “in a week or two,” allows HBO to set different prices for TV shows than the standard $1.99 per show rate. Not explained: Whether HBO will be moving its wholesale prices around as well, and what happens to Apple’s (AAPL) gross margin on each sale (it generally keeps about a third of the retail price for each video and music single it sells, though movies are a different story).
If true, Apple is in for a tough round of negotiations as its next round of iTunes content deals expire. The studios are eager to keep iTunes from dictating pricing on video, as it does for music, and the ability to move prices up (or down, in theory) have been a major demand, but Apple has yet to cave.
That’s what led NBC U to yank its TV content of iTunes last fall. CEO Jeff Zucker said at the time that he won’t do deals with retailers that inflexibly dictate pricing–and last week announced a TV deal with Microsoft’s Zune player.
If Showtime is any indication, HBO shows like the “Sopranos” should be popular on iTunes. Two series from CBS’s Showtime–“Dexter” and “The Tudors”–are in iTunes’ top 10 TV series.
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