* Apple in talks with News Corp, CBS, Disney - sources
* Stream TV shows for 99 cents - sources
* Some media companies have concerns - source
(Adds analyst's comments, more details from sources)
By Sue Zeidler
LOS ANGELES, Aug 24 Apple Inc (AAPL.O) is in
talks with News Corp (NWSA.O), Walt Disney (DIS.N) and other
media conglomerates to rent TV shows to viewers for 99 cents
through iTunes, three sources with knowledge of the matter
The industry sources, who spoke on the condition of
anonymity because negotiations were private, said the
discussions were aimed at allowing viewers to rent network
programming off Apple's iTunes store for 48 hours.
One of the three entertainment industry sources said that
several media companies, including NBC and CBS, were not
enamored with the plan because they believed it would undercut
revenue they already earn through iTunes.
But some analysts say if the deal goes through, revenue
raked in off iTunes is likely to dwarf the income networks earn
through free, ad-supported content online from sites such as
Representatives from Apple, Disney, News Corp, CBS(CBS.N)
and General Electric Co's (GE.N) NBC declined to comment.
Disney owns ABC and News Corp runs the Fox network.
Consumers currently can buy -- for repeated viewing --
whole episodes of popular TV shows like ABC's "Lost" and NBC's
"Friday Night Lights" for about $1.99 an episode.
"Right now, we're against it. We don't think it's a good
business model. Why cut your price?" the source said.
Apple is also set to unveil a new version of its iPod
Touch with a higher resolution screen, according to Bloomberg,
which broke the news of Apple's network negotiations.
Fox and Disney's ABC already provide episodes to video web
site Hulu, a joint venture with NBC -- which has offered
streamed programs for free until recently, when it started
charging customers for some content.
And all of the media companies also have existing content
deals with cable and satellite companies.
"In a sense, this rental model undercuts purchase, but it's
the way the world is going," said Tom Adams, president of
Screen Digest Inc.
"All the free streaming options that have proliferated on
the Internet have already brought to a halt the fast growth of
the TV show sales business," he said referring to the
electronic sales of episodes on iTunes.
He also noted that free, ad-supported streaming services
were providing pennies per episode viewing to networks, while
Apple's plan could conceivably yield more if Apple offered to
take the industry-standard 30-percent cut on any content
Apple in 2007 debuted Apple TV, which plays computer-based
video on television sets. Its popularity has paled in
comparison with devices like the iPhone and iPad.
(Additional reporting by Jennifer Saba in New York; Editing
by Edwin Chan, Bernard Orr)