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Disney, News Corp on Track to Rent Through iTunes

Apple's big event is coming up Wednesday, and Disney and News Corp are on track to announce that they'll rent TV episodes through iTunes.

It'll cost 99 cents to access a show 48 hours, while iTunes continues to sell the same episodes for $1.99. Sound risky? (Here's my blog on the situation.) Apple will make the experiment worth it for Disney and News Corp, by literally eliminating their risk, according to sources familiar with the situation.

iTunes
iTunes

Sources tell me Apple will guarantee that if the new model generates less revenue than News Corp and Disney have made on TV sales on iTunes in recent years, Apple will make up the difference. The trial period is probably around six months, and then the companies can jump ship if they're not happy. But in the mean time it sounds like Apple will make it as safe a proposition as possible.

Another factor driving News Corp and Disney to this agreement: the differential between rental and sale prices for TV shows will be less than the differential between the rental and sale price of movies. Now movie downloads generally retail on iTunes for some $14.99, while a movie rental is usually $4.99.

Apparently it works for movies, we'll see if it works for TV shows. Apple certainly seems confident that it will.

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