Apple believes cutting the charge to consumers will help spur demand and is an integral part of their long-term strategy for the upcoming tablet computer.
Recently, Apple has suggested to media executives that the price it charges for TV shows be halved from $1.99 to $1. The networks are reportedly resisting the move as they fear this will dent revenue from other areas.
Apple is looking to change pricing dynamics, a person familiar with the talks said. Thats what they did to the music industry. The difference between the TV industry and music is this one has good economics.
Once Apple debuts the tablet they are expected to become much more aggressive in their negotiations. They [Apple] know how to push, one senior media executive said. Its not a push, its a suggestion, he added, but it comes up in all the conversations.
Apple has also proposed the idea of a video subscription service which would cost about $30 a month and offer the "best of television". This idea is a tough sell since existing pay television services have proven stable and lucrative during the recession.