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Apple (Nasdaq: AAPL) is trying a new strategy for selling television programs available for video iPods, offering iTunes users a monthly subscription to download episodes of Comedy Central's "The Daily Show with Jon Stewart" and "The Colbert Report."
For the first time, iTunes customers may pay a US$9.99 fee to gain access to a month's worth -- 16 episodes -- of either of the Comedy Central shows via iTunes' Multi-Pass system. The satirical news shows also will be available on a per-episode basis -- like such shows as "Lost" and "Desperate Housewives" -- for $1.99 each.
Smart Experiment
Apple is credited with jumpstarting the business of legal music downloads with iTunes, but the service has stayed away from a subscription-based model until now. Apple plans to keep a la carte pricing intact for all of its offerings, including music videos, short films, TV clips and series episodes.
The Multi-Pass subscription experiment was met with praise by Yankee Group Senior Analyst Mike Goodman. However, "it is interesting to note that in the past, [Apple CEO] Steve Jobs said a couple of times he's not a big fan of subscriptions," he told told MacNewsWorld.
That said, "the subscription model makes more sense for television programming," Goodman remarked.
The deal 
announced Thursday will put Viacom-owned Comedy Central programming on the iTunes network for the first time, and, via Multi-Pass, will allow fans to buy blocks of "The Daily Show" and "The Colbert Report" episodes, which will be delivered automatically to their computers after they air on television.
Tailored for TV
Apple remains in the driver's seat for mobile video because of its ability to give content holders so much -- as much as 70 percent -- of the revenue from downloads, Goodman pointed out.
While Napster or other digital download competitors might not be able to take such a loss, Apple is content to do so because the company makes a great deal of money from the iPods it sells.
"Competitors continue to be unable to negotiate anything better with content holders, leaving Apple the video download king with its iTunes," Goodman told MacNewsWorld.
Apple's decision to launch its Multi-Pass subscription service with Comedy Central programs may be considered low risk relative to alternatives it might have chosen, such as, say, offering episodes of NBC's "The Office" in this way. The show currently accounts for nearly 40 percent of iTunes video downloads, according to Goodman.
Jumping In
The move may indeed signal that Apple is positioned to move more deeply into a subscriptions model, suggested Jupiter Research Vice President Michael Gartenberg.
"It will be interesting to see if other iTunes video is offered in similar fashion," he said.
Apple may understand that users might consider the price of an entire collection of similar television shows too expensive to purchase individually, Gartenberg concluded.
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