Financial Times is reporting that Apple might just be set to test drive $1 iTunes TV downloads as part of their iPad launch in March:
Some television networks agreed to the lower prices after months of negotiations, and having initially resisted Apple’s push. Media executives are under pressure from declining DVD sales and cut-rate rental services such as Redbox, that offer rental DVDs for $1.
Not all networks say they've been approached, and being networks some may still refuse, but if the test is successful they'd be complete idiots not to jump on board (which means, of course, some won't).
Competing with "free as in pirated" is a tough model but Apple showed music how to do it with the $0.99 price point (while it lasted). Hopefully the networks pay attention. Selling iTunes TV for more than it costs on DVDs isn't only consumer-hostile, it's simply bad business.