iTunes Subscribers Could Feel Pinch From Writers' Strike

When the Writers Guild of America began its strike on November 10, few people might have imagined that the people affected would potentially include iTunes Store customers. But as the strike enters its 10th week, customers who subscribed to iTunes season passes for their favorite TV shows are starting to find they paid for digital downloads they haven't received. And it's not clear when they will get those downloads.

First introduced in March 2006, the iTunes season pass feature lets subscribers pay up front for an entire season's worth of episodes for a particular show; subscribers receive automatic downloads of new episodes a day or so after they air on broadcast TV. As an example, a fan of the program Desperate Housewives could pay US$34.99 to receive all past and future episodes of that show's fourth season, which began airing last fall.

However, with writers on the picket lines, the well of original episodes for scripted TV shows has begun drying up. For example, the final completed episode of Desperate Housewives appeared on iTunes last week; it was the 11th episode of the fourth season, well short of the 23 episodes that typically make up a full season.

What's more, some shows that offered iTunes subscriptions have already begun to throw in the towel on the current TV season. Fox has announced that Prison Break, which returns to the airwaves Monday, will broadcast its season finale on February 18. That means the current season will wrap up after its 13th episode, nine episodes or so shy of a full season. Prison Break viewers who paid $39.99 for a season pass at the beginning of the season--including the reporter of this article who recaps the show for Television Without Pity--might wonder what that means for their iTunes accounts. Will a reduced season mean a refund for the balance of episodes that weren't produced? Store credit? Or will the Season Pass resume once regular broadcasts do?

Apple hasn't offered much in the way of answers to these questions. There's no information the iTunes Store regarding the truncation of a season run. And Apple did not respond to multiple requests to outline its policy.

This discussion thread in Apple's support forums may offer some guidance as to how the company may handle the issue. Subscribers to the Multi-Pass service--which lets you buy 16 episodes of shows like The Daily Show and The Colbert Report for $9.99--received e-mail notifications that their subscriptions would resume when new episodes of the shows appeared. Both those shows returned with new episodes last week.

"My guess is [Apple] will offer a generous type of extension or substitution," said Phil Leigh, a senior analyst at Inside Digital Media, which analyzes the digital-media industry. "They don't want to leave customers with a bad taste in their mouths."

It's unclear just how many customers are affected by potentially truncated season passes. Apple closely guards information about its iTunes business, releasing only general figures about revenue and total downloads.

However, Apple's financial reports offer some insight into how big a business video downloads are for iTunes. For Apple's 2007 fiscal year, the business unit encompassing the the iTunes Store, iPod services, and Apple-branded and third-party iPod accessories made sales of $2.496 billion, a 32-percent rise over 2006. It's not stated exactly how much of that $2.496 billion comes from the iTunes music store, but Apple does credit "increased net sales from the iTunes Store," for the 32-percent growth.

"The Company believes this growth was the result of heightened consumer interest in downloading digital content and the expansion of third-party audio and video content available for sale via the iTunes Store," Apple says in its annual report.

Leigh estimates that TV shows and movies make up between 10 to 20 percent of the sales on the iTunes music store. Regardless of the percentage, he says Apple seems likely to respond to customer complaints about truncated season passes.

"Apple thinks video will become much more important," Leigh said.