Macworld reports that Warner has declined Apple’s invitation to offer 99-cent rentals for Apple TV. It reasons that the low price would harm the sales of full seasons of hit shows, and said it didn’t want to “open up a rental business in television at a low price”. Instead, Warner wants to continue charging viewers three bucks per TV episode.

Warner doesn’t get it. TV—even good TV—is relatively throwaway, but people are willing to pay if the price is right. $2.99 for a TV show is terrible value. $0.99 is directly in impulse purchase territory. For that price, people would try out way more stuff, and would be likely to grab each new episode as it came in, or just buy a season pass if they’d ordered a couple of episodes of a show that they ended up liking. Also, when prices fall and availability is immediate, people can’t be bothered to deal with torrents. For 99 cents, someone will pay for the latest Doctor Who. For three bucks, they’ll instead fire up their favourite BitTorrent client.

But wait! The industry says that lower pricing results in studios becoming paupers, right? Not quite. Stuart Campbell has written about premium versus low-end pricing in the iOS games market. With well-known properties—which TV shows mostly are—lower pricing equates to higher revenues overall, as shown by Pac-Man leaping into the top-grossing chart when at 99 cents (59p) and then disappearing without a trace when Namco returns to its rather ambitious pricing for a conversion of a 30-year-old arcade game. With TV shows, there are a lot of Pac-Mans, but, sadly, a lot of Namcos that own them

Apple’s thinking with TV is in enabling viewers to free themselves from buying loads of crap they don’t need in return for grabbing what they do at a reasonable price; it’s about low-cost entry but long-term profits, for Apple and for studios. It’s a pity Warner doesn’t get it, but it almost certainly won’t be alone, and I suspect the future for Apple TV may well be bleak unless studios wrench themselves out of the 1990s and embrace the idea of more flexible delivery mechanisms and pricing for TV shows.