NBC responds: nuh-uh
This is turning into a regular soap opera. First NBC Universal says it's not renewing its iTunes Store contract with Apple. Then Apple responds with a press release saying NBC wanted to double the wholesale pricing for shows, which would push per episode prices to $4.99. Now NBC is back saying that isn't true, that they only wanted "flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers." Further they complain that Apple is more interested in making money on hardware than money for content provider (no, who would have thought that Apple wants to make money for itself rather than other people). Anyway they emphasize that NBC shows will be available until December, and they left open the possibility that a new contract might be negotiated in the meantime. In general I think it's unseemly for companies to air their dirty laundry in public like this, but I'm starting to get the sense that this is a negotiating tactic on both sides. Personally I have the sneaking suspicion that something will get worked out before December.[via Engadget]
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Reader Comments (Page 1 of 2)
midloviking said 8:34AM on 9-02-2007
Apparently NBC didn't get the memo about crossing Steve. He put the hammer down and now NBC is diving for cover.
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Andy said 9:05AM on 9-02-2007
Gee NBC, you want to package shows together to make it more attractive for me? Thanks!
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Scott said 9:33AM on 9-02-2007
Wow, bundling of shows. You mean some combination of things that are neither a one show purchase or a season pass purchase? Sounds like an AWFUL idea.
NBC is absolutely consumer friendly. Just go to www.nbc.com and try to find an email address to register your feedback for anything other than the Olympics.
You know, I discovered Battlestar Galactica through iTunes, and ended up buying all of Season 1, 2 and a Season Pass to season 3 before I finally caught up about halfway through Season 3. Plus the miniseries 4 parter. I'm sure I spent over a hundred bucks between all of those purchases. And I caught up, and now can watch live (with commercials) or keep PAYING them and watching it on iTunes. Without iTunes - I would never have watched it, since nobody turns in to a show like that halfway through season 2 - you can't catch on. Without iTunes, a show like that can only LOSE viewers each week, with iTunes they can GAIN them.
So long NBC.
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Jon said 9:36AM on 9-02-2007
I think Hitler was recincarnated and is now running NBC Universal. Firstly, they accuse iPod users of being pirates, then they charge a special fee to Zune users for "piracy compensation".
Then they decide to renew their iTunes contract monthly instead of annually, and now they're pulling content from the video store.
Basically NBC wants to screw the consumer the same way they screw the artists. I can't wait for the day when artists sell their content online without the need for a record label.
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Quix said 9:37AM on 9-02-2007
Does NBC seriously believe we don't know that "flexibility in wholesale pricing" means price increases?
Even $1.99/episode was equivalent to or *more expensive* than getting shows on DVD. So NBC cuts out the cost of physical manufacturing, distribution/shipping, etc. yet wants to *increase* the price? And somehow *Apple* is being unfair when they balk at this proposal?
Do these people commute to work every day from another planet?
Goodbye NBC Universal.
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nv said 9:37AM on 9-02-2007
""flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.""
translates to
""since TV ad revenue has gone down the toilet we want to bundle rubbish with the good stuff (think crippleware bundled with new PCs) so that somehow we can make more money (though probably less than if we had just continued to sell shows for $1.99 online)""
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Simon said 9:45AM on 9-02-2007
I posted yesterday trying to figure out quite where Apple came up with the 4.99 price tag (http://www.oakinnovations.co.uk/blog/2007/09/01/running-the-itunes-vs-nbc-numbers/) and the fact that it just doesn't add up, so this news makes for some interesting reading. Is NBC effectively saying that you shouldn't be able to buy individual episodes, one of the great strengths of iTunes, just whole series. And forgive me if I'm wrong, but aren't shows already grouped into series for sale, and discounted as such? This is all just madness.
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Thomas Fitzgerald said 10:26AM on 9-02-2007
It seems to me that Apple couldn't have just come out and made up the whole story and then put it in a press release if there wasn't some truth to it.
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Zach Everson said 10:42AM on 9-02-2007
I love the irony of the fourth-place network trying to dictate market terms.
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Sam said 10:50AM on 9-02-2007
Quix: some people really are dumb enough not to realise. Or, there are others who simply don't want to have to penetrate the corporate speak.
And honestly, companies *never* increase their own prices. Ever. They lower them, decrease them, make things cheaper, but never put them up. They "change" them, "update" them, "increase flexibility" etc.
Even Apple are guilty of similar actions - the entry level price for the iMac has gone up, but you won't see Apple referring to it that way. Sure, the previous 17inch combo-drive iMac wasn't that great a deal, and the new iMacs are the best thing since left-handed bread knives (the things I'd do to get one!) - but a lot of people don't want or need a 20inch screen.
And while I'm sure there would be quite a few people who would appreciate bundling episodes together - perhaps 3 or 4 for $4.99 - it still increases the entry price if you just want a single episode (single track sales is one of the things that has made the iTS so successful), if NBC refuses to sell them singularly. And *that's* what will look bad to the people who can make such distinctions.
Sam
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peternj said 11:33AM on 9-02-2007
NBC has done the right thing and so has Apple. Both have their own needs and business models. There is no reason why NBC or ABC whoever should subsidize iPod owners for Apple's bottom line. The idea that Apple is the friend of the people and NBC is big bad old style biz is laughable. Jobs is every bit as evil as Bill Gates or not...
Time for Apple fans to wake up, the online world is moving fast and iTunes is not the future, it's already old school. You wouldn't know unless you use Windows. The majority platform already has in beta or now online streaming TV of a quality that matches iTunes but for free, with adverts. People like this it seems. I prefer iTunes but then I'm old school.
Apple cannot beat free streaming TV unless they offer NBC a reason to stay. If not NBC can make a fortune selling advertising slots.
Get real people, Apple is trying to be Microsoft but Apple needs NBC (30% of all videos sold) more than NBC needs them.
Surfs up stay with Apple and you'll be left behind.
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dashiel said 11:47AM on 9-02-2007
@peternj
here's the thing: do i think jobs is being altruistic? absolutely not. do i think that his companies desire is more beneficial to me as a consumer? damn straight. jobs has been fighting for our rights for a very long time now, it benefits his bottom line, but it benefits ours too. his terms and position are simple: customers like easy to understand, simple pricing, reasonable pricing; customers don't want DRM. when i start seeing companies muddy the waters with statements like "we want to bundle shows for greater convenience to the consumer" my bullshit meter goes through the roof -- might as well offer me that paint sealant.
and let's not forget this is the same company that has been pushing for years to charge more for individual songs, just cancelled their long term contract, and left apple out in the cold with their "test run" of non-DRM'd songs.
nbc/universal screwed up and ceded too much power to apple, and now they're trying everything humanly possible to break apple's resolve. it's too late though, ipod/itunes has reached critical mass.
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Thomas said 11:48AM on 9-02-2007
The only way bundling would work for customers is if you can choose from any of the shows they watch and buy them together for a lower price. Of course they know that you'd probably buy them anyway so they won't do that, they'll offer 1 show you really want and then some other product you're 50/50 on to try and con you into spending more money.
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Mo said 11:48AM on 9-02-2007
@4: NBC/Universal and UMG are two different companies.
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j said 12:05PM on 9-02-2007
From Homer Simpson (The Simpsons:Movie)
"...I can't believe we're paying for something we see on TV for free...."
Don't get me wrong I use iTunes to purchase shows but then again I'm overseas - I don't get US over-the-air channels. Would've broken out the old VCR if I do.
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Mitch said 12:11PM on 9-02-2007
The part of this that doesn't make sense to me is why NBC would choose to not renew their contract until they had a better alternative in place.
When NBC shows are removed from iTunes, how can I legitimately get NBC shows onto my iPod & iPhone? Streaming from NBC website doesn't help me.
This move prevents people from BUYING NBC TV shows. The alternative is to acquire the content without paying for it (torrents, etc.), waiting for DVD and ripping it (not sure if this is 100% legal - DMCA and all) or stop watching NBC shows on the go. Which of these 3 alternatives is NBC rooting for?
Selling TV shows through iTunes Music Store seems like the perfect arrangement for companies like NBC. Having increased revenue and a new revenue stream is a complete win, right?
I think it is great that Apple has created a simple to use and fairly priced way to buy content for the iPod family. I also think it is great that Jobs and Apple are keeping all prices the same - $0.99 for music & $1.99 for TV shows is a fair price.
As usual, the loser in all of this is the consumer.
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Daniel Bagge said 1:13PM on 9-02-2007
Can't say I really care. I DL all my TV shows from The Piratebay or such. I would never pay for the over-priced, DRM-damaged, low quality goods Universal is selling on iTunes.
Plus Universal seems like desperate yerks. Leaving Blu-Ray to go to the HD-DVD camp for XXX million dollars. Thus prolonging the format wars and earning even more hate points.
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Greg G said 1:18PM on 9-02-2007
They need to see that Apple uses iTunes as a service more than a music store. These greedy companies need to realize that the iTunes store is their best option, because otherwise, people will torrent an entire season, rather than buying for it.
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Abhishek said 1:59PM on 9-02-2007
This is becoming quite a catfight. NBC now says that they did to explore alternative biz models. This is a growing trend among media entities. I am sure more content producers will go down this route. Apple does have a monopolistic position in the online media commerce, which is not conducive to these media entities.
Also this will allow alternative business models and may make content cheaper for us consumers. Universal did the same.
Read more of my thoughts here:
http://abhishek.tiwari.com/2007/09/02/growing-ihate-for-itunes/
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Jeff Kirk said 2:44PM on 9-02-2007
I guarantee this will get worked out before December. NBC seems to forget that it's because of iTunes that shows like The Office were able to continue on. Before that point, The Office was most likely going to be cancelled by the network.
iTunes has prolonged the life of many shows. If NBC let's the contract lapse without a new contract, they are committing suicide.
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