TV programing price war: $0.99 vs. $1.99

I've been thinking a lot about pricing since reading about the digital distribution/monetization models currently in play for today's televised network programming. As a product developer, the last thing I think about is pricing. In my experience, it tends to add confusion to the mix. It's good to have goals, but constantly having a profit objective looming over you in the creative stages of idea conception is counterproductive.

Build a quality product or construct a solid service and figure out the baseline cost to sell it to cover your costs. Then add markup baed on various cost inputs, consider the competitive climate, ponder what the market will bear, and plan a little for future shifts and generally you'll arrive at a dollar figure.

This stream of consciousness therefore leads me to ask why CBS/Comcast & NBC/DirecTV made their programming so much cheaper than the ABC/iTunes deal? A buck is significant when scaled up in TV audience numbers and doing CPM analysis and quasi-statistical stuff like that. The major advantage the ABC offering has is portability and device support from a growing number of vendors, but it's still video limited to a 320-x-240 display. In contrast (pun intended), the PVR-based nature of the CBS and NBC schemes are of much better quality, suitable for formal display. In my mind as a consumer, I would think this would be worth more. I'm more likely to watch a 44-minute digitized version of "60 minutes" on a full-sized TV screen than off of a 2.5" iPod.

But, if the CBS and NBC shows were likewise priced at just under $2, I wouldn't complain. I still think that's a fair rate for a broadcast-quality network show, sans commercials. ABC makes twice as much money off of me, which will assumedly finance future innovation and marketing gimmickry.

Perhaps the other guys wanted to undercut ABC's first-to-market advantage. Maybe ABC's affiliate costs are really that much more exorbitant than the others. Perchance ratings for "Lost" and "Desperate Housewives" really are kicking the crap out of everyone else. Possibly the price was set high as to imply a huge benefit for the consumer when it gets dropped due to compeition, or providing for extra bundling, like additional bonus clips. Not being privy to such data, I can't opine on the subject.

The pricing model is probably, in no small part, due to the fact that the avail of CBS's and/or NBC's programing, you need to simultaneously subscribe to a third-party service - Comcast and/or DirecTV, respectively. That probably balances out the long-run costs.

I guess I'll have to muster a guess that the quality of the content - in theory - outweighs the benefits of the platform through which it arrives at the viewer.