NewTeeVee from the GigaOm network reports that Apple is working with content providers on a new video streaming rental service that will allow subscribers to watch shows at a price as low as 99 cents.
The proposal is clearly in a bid to increase video consumption among subscribers. Currently TV shows are available on standard quality at $1.99 and HD quality at $2.99. The new streaming service will work in much the same way as it works now. Once purchased, viewers will have 30 days to view the show. And once the show has started streaming, it will be available for viewing for 24 hours.
Apple is desperately trying to keep iTunes relevant in the video streaming space in the light of competition from the likes of Hulu and Netflix that have become household names when it comes to online television streaming. YouTube too is known to be working on a similar offering.
The bigger question however is whether content producers will agree to such a drastic drop in price that will clearly affect their margins. With increasing competition in this space, these content providers will also have greater leverage in negotiations.