But look at the price point. Originally $1.99 per episode to just rent it. Even $0.99 sounds a lot to me.

That's almost $50 for an entire series. What's the average amount of time someone would spend watching TV series per night? An episode of this, an episode of that, 3 or 4 times a week. Suddenly you're spending vastly more than cable.

That's more than a modern box set will cost you, e.g. Boardwalk Empire, just released is selling for $40 on Amazon.

Yet they spent $5million per episode, that's a lot of views to just break even, plus the server hosting costs and vendor marketplace cut to make.

The whole thing is overly complex, per item rental is too complicated, a fractured marketplace makes subscriptions poor, the time drip model that studios and channels used to use is dying, but they won't let it go.

I think it'll be 5 to 10 years before we finally see a decent resolution to this where actually paying is less hassle than piracy.

I agree that shows are generally overpriced but you've selected some bad examples - Boardwalk empire had 12 episodes so even at $3 an episode (premium content or HD) that's still less than the $40 you'd pay on Amazon.

$1.99 just to rent? It's $1.99/$2.99 to buy them currently, are you sure about those prices? I can't remember the rental price so you could be right, but it doesn't seem likely since they charge the same amount for purchasing now.

Yes, I do remember when they shuttered TV show rentals. The only reason they gave is that users preferred to buy TV shows. I find that hard to believe although I could be wrong. Charging people $1.99/$2.99 to purchase an episode of a show means $20-$30 for a season (sometimes more). It makes more sense to just pay for cable at those prices, which I refuse to do.

Apple doesn't like rental services because unlike purchases of proprietary drm content rentals don't provide long term lock in to the platform.

Apple has been pushing for less DRM, not more, and would rather people bought into their platform without being held hostage.

It is not an easy thing to convince publishers that no DRM is the way to go, yet the music companies reluctantly agreed. Considering Apple is the number one retailer of music, ahead of Wal-Mart, this seems to have worked out quite well.

Rentals are hard to market because in the digital domain you have the same media file as you would if you had "purchased it", only the licensing is different. Charging hotel-room prices for movie rentals will not translate to many sales. Netflix has the right idea for rentals. Low-quality streaming, flat rate pricing.

Apple is only anti DRM for the rights of music and movies and phone companies. They love DRM when they own the rights. Cf App Store.

Amazon broke through with DRM free MP3 originally.

Amazon was an important pioneer in selling DRM free MP3 files, but they couldn't break the back of the whole industry like Apple managed to.

As for the App Store DRM, I'm not sure how that's any different than Steam, which everyone seems to agree is a great model for both customers and developers.

Apple's App Store and Steam both allow you to install the same application on multiple devices.

I'm not sure if you can point to a better model that's been successful in the past. Some indie developers have done alright with DRM free games, but they depend on community goodwill to keep themselves profitable, something a large corporation has a much harder time doing.

At the low end 40$ a month * 12 month/ 40$ a show / year = 12 shows. I don't know about you, but I don't think many people watch that much TV excluding reruns. But, I do know plenty of people that pay 100$ a month for cable.