Mass-media mess-up: NBC doesn't get the iTunes store

We're going to start seeing "ad supported" TV content for the portable video market any day now. It's already on some podcasts -- just a matter of time before the networks decide that they'll be able to squeeze more money out of it if they toss the ads in. After all, it's why TV is free. Er, "free".

The major issue in video will be who will control the best content. Apple has started it but with NBC's announcement to leave is it's trying to show that Jobs isn't the only game in town. iTunes is ignoring pricing models that have been established for decades by media companies.

The audience may follow NBC to Hulu or seek out alternative possibly illegal solutions. I've got more in a post entitled "Can media companies overcome iTunes' stranglehold on music and video pricing?"
Check it out here: http://www.sparkminute.com/?p=231

You know where this is heading, don't you?

These guys will settle by December on a deal where you can still get the shows at $1.99, but with commercials. If you want it without, you'll need to pay $3.99. I bet that's what will happen.

I could be wrong, but I see this might be the compromise that NBC wants. I don't think Apple will like it, but they might accept it.

Apple was masterful at getting the content providers to accept a low price point from the start. This conflict over pricing was inevitable, IMHO.

So now we know the true reason why there won't be any more BATTLESTAR GALACTICA (Universal = Sci Fi Channel = NBC) past this last season, NBC's losing a major revenue source and won't be able to pay for more episodes! ;-)

Honestly, NBC, I broke my own rule this year and double-purchased the first season of HEROES and THE DRESDEN FILES (as they were released on iTunes and then on DVD when they were released) - I liked the shows enough that I didn't want them "trapped" on iTunes. It's much simpler to throw a DVD into the player than it is to hook up the PowerBook to the TV when I want to watch an episode. I purchased several episodes of BATTLESTAR GALACTICA as well, and intend to purchase the third season when it's released on DVD - not as bad as double-purchasing the whole season, but I'm still paying twice for six or eight episodes. I don't do that, as a rule. I was planning on doing same with HEROES, season two, BSG, season, 4, would have if DRESDEN had been renewed, and would have been likely to with BIONIC WOMAN. And what's interesting in my case is, other than the occasional freebie episode of something that Apple is prone to offering weekly, and KIM POSSIBLE for the kids (yeah, right, okay, me and the wife too) that's about all the TV I have purchased from the iTunes store. Most of my purchases have been NBC or one of their affiliates. So now, NBC has decided to save me the money and make me buy them only once, so I suppose I should be grateful.

Steve Jobs said in his iPod annc that the iTunes store has sold 100M shows. If NBC has 30% of that, that is 30M shows. If the profit to NBC is $1, that $30M which is nothing to a network. So NBC is walking away from much revenue. What they are losing is brand-share and mind-share: NBC shows will get somewhat less viewers because when someone hears about a show they should be watching, they won't be know where to go find it and see it. NBC could rectify this to some degree if they do a good job putting the shows on their website.

I think this is going to result in something such as a link between NBC Universal and Microsoft. Remember, MSNBC is a joint venture between NBC News and Microsoft already.

Perhaps we can expect to see some sort of upgrade to the Zune or another Microsoft produce (XBox 360?) in the coming weeks?

Currently "The Office" season DVDs are list price at $49.95... and of course heavily discounted online as well as many physical locations.

There are approx. 24 episodes per season on these sets - that puts the price per episode at $2.08, and one gets DVD extras.

Now NBC wants to sell individual episodes - without any extras - for more than $1.99 ?

Are they crazy?

$2 is more than I'd really be interested in paying as it is. And, if their idea is to insert commercials into the viewing, the price had better be about 1/2 that.

It's time to move on and get some new favorite shows. Which is a shame - Heroes was a favorite of mine.

In pricing out the value of NBC's iTunes offerings, please do not forget to add in the profits they receive from bundling less expensive shows. Cable operators have to purchase channels in bundles. They cannot get SciFi, for example, without also buying "The fishing channel, the golf channel, and the underwater basketweaving channel". iTunes does not permit this sort of bundling, and thus popular shows cannot help out shows with limited appeal.

And in fairness, complaining that Amazon Unbox doesn't support OSX is a bit hypocritical. iTunes doesn't support Linux, after all. An odd thing, really, since iTunes is written to run on a unix kernel.

Oh, and something else you may not have realized... the HD content is supposed to be hardware-protected. They're trying to close the "analog hole" using government-enforced hardware DRM. If all content goes HD, getting a copy off of bittorrent may become a thing of the past. That would make viewing NBC's products only possible under their terms and conditions.

duscrom: It's not that The Office needs iTunes to survive, today, it's that The Office needed iTunes to get past its initial growing pains. Basically, it was liked by the critics, but didn't have the ratings. Being added to iTunes (and becoming one of the most popular downloads) is credited for helping to catapult the show into "hit" status.


As for Apple and shows on iTunes in general -- what do people here think would happen if Apple made it trivial to purchase shows right through AppleTV? So that couch potatoes could surf through listings and synopses and "Top 10" lists, find something that looks interesting, and three remote-clicks later, they've bought a $2 TV show? Think that'd make iTunes even more attractive to networks? (and, conversely, piss NBC off for making this stupid mistake?)

Oh, and NBC doesn't want my money since it isn't making much anyway. So, what the hell, I'll turn to BitTorrent and my evil iPod the piracy tool.