Filed under: Analysis / Opinion, iTunes, Apple
Other companies and Apple's iTunes price war
NBC has gotten all the press in their big fight with Apple, but a few other companies are currently considering their options about what to do with iTunes pricing.News Corp is apparently ready to draw a line in the sand. Their COO Peter Chernin says "negotiations will be prickly and dicey and contentious, like all negotiation are and like all negotiations should be." Interesting point of view there. He earlier promised that they wouldn't be pulling content from iTunes like NBC is (or at least says they are-- the content is still there for now, but on the way out soon), but says that they should be the ones determining prices for their products, not Apple. Which is true-- unless Apple believes otherwise. If Apple offers you $1 per song or nothing, Chernin, which one are you going to take?
And CBS, on the other hand, is asking everyone to just chill, OK? CEO Les Moonves is the only one that actually sounds like he knows what's going on at the iTunes store: "We look at iTunes as much as a promotional vehicle for our shows as a financial vehicle." That's exactly how everyone should see it-- we can watch these shows for free (with advertising) on television, or pay a nominal fee to watch them later on iTunes.
This doesn't help with NBC of course-- they're going to do what they want (including go to Amazon) no matter what CBS says. They are competitors, after all, but whether NBC pulls out or not, the Store isn't going anywhere-- there are lots of content providers still interested in it.
[via MacBytes]
![TUAW [Cafepress]](http://www.blogsmithmedia.com/www.tuaw.com/media/tuaw-cafepress-promo.png)
Reader Comments (Page 1 of 2)
Luna Lovegood said 12:04PM on 9-19-2007
"If Apple offers you $1 per song or nothing, Chernin, which one are you going to take?"
Tough Guy.
Reply
matthew said 12:12PM on 9-19-2007
News of the future:
September 19, 2015 - Today NBC has closed its doors for good after years of dwindling viewer numbers. Critics cite NBC's inability to adapt to changing technologies and the electronic media landscape as key factors in the network's demise.
...
Reply
basscadet said 12:21PM on 9-19-2007
It seems NBC is betting this year's revenues that others will jump out of iTunes in order to force a new (and probably more expensive) pricing model. NewsCorp seems to be going for it. What happens if more follow?
Reply
Billy K said 12:33PM on 9-19-2007
Is it just coincidence than NBC and News Corp are the two companies teaming up to bring their own online media company to the web (wulu...luhu...whatever the hell it's called)?
No, it's not a coincidence (sorry - couldn't wait for your answer). They claim to be making a competitor for YouTube, but you watch (no pun intended)...it's gonna be selling media of all types.
And it's gonna fail. A media store where the behemoths of old media get to call all the shots? Dear Sweet Buddah, sign me up! I can't get enough of that kind of abuse quickly enough!
:/
Reply
Admiral said 12:34PM on 9-19-2007
You know wal-mart comes to mind with this story.
They set prices in their stores, and if they cannot do that, they generally don't get the product. Suppliers are beat silly by walmart people, why shouldn't apple decide what the pricing will be on their store?
iTS is not a co-op, it's the digital equivalent to a brick and mortar store
Reply
unteins said 12:52PM on 9-19-2007
What Apple fails to realize is that the producers really do set the price. They sell the media wholesale to Apple, so if Apple pays $1.00 for the show and sells it for $2.00, that works. But if NBC says hey, we want $7.50 a show Apple is just going to not sell it.
Netflix has had similar problems with old media with regards to downloaded video content. They wanted more money than consumers were willing to pay.
Personally, I think Apple should let NBC charge a higher wholesale price, and mark up the video by the same percentage. No one will buy it and NBC will look stupid.
Or everyone will still buy it and Apple will make more money.
Reply
Cory said 1:02PM on 9-19-2007
Hmm. What is going on here? Is this just greedy corporations trying to make more money or is there something more thats not being revealed?
Personally, living in Canada I don't know what the quality on itunes tv shows is like, but if its a decent quality and if they were offered here I wouldn't mind paying a max of like $4 an episode.
And, quick question, does NBC pulling out of the store affect music at all? or just videos?
Reply
Victor Agreda Jr said 1:02PM on 9-19-2007
All the same, the more these behemoths do this, the more it opens the door for good indie content of all flavors. It only takes a breakout or two and the world will turn its attention elsewhere. Well, that and everyone should have an i-something or other to watch stuff. Right now it is all too easy for the big guns to call the shots because they control the jaded zillions who just plop down in front of a TV.
But what if AppleTV gets serious, what if IPTV goes mainstream, what if the various distribution systems become so dead-simple to operate for the home user (the "average idiot" as I call 'em) that stuff like Democracy Player is a real, viable alternative?
The more they tighten their grip, the more we slip through their fingers. Or something.
Reply
Chad Wright said 1:10PM on 9-19-2007
What's really really annoying is we just dropped the satellite last season and switched to iTunes/Apple TV for all our viewing.
Now that viewing will be NBCless. I understand Apple's stance. I don't want to pay more than $2 per episode. On the other hand I had 8 shows planned to download from NBC this season.
Reply
kakapo said 1:14PM on 9-19-2007
YARCFTWOOTUSA (Yet another Reality Check from the world outside of the USofA):
Who is this NBC - NewsCorp - CBS that you speak of... Here in Australia we have The ABC (Australian Broadcasting company) SBS (no one really knows what the letters stand for) Fox (of course) and channels with numbers. I guess these "behemoths" are just big in the USofA. So, they broadcast to about 350 million people. Hmmm - there are 6.5 BILLION people on the planet. And NBCs market share of programming is how much?
Sure we only have broadcast programmes to 22 million (and growing) population base AND some of us do watch programming from other countries (I love The BBC, myself) AND some do watch US programming but we are not beholding to NBC or CBS or XYZed - and we have none of their "superior content" (I just added the quotes for anyone who wishes to use those words in a response) ;) on iTMS - and iTMS is doing just fine. Top selling digital media store in Oz.
Just my 2p...
Reply
Dave Wood said 1:22PM on 9-19-2007
I think NBC is missing a major point here. With Apple, they have the ability to cut out the entire TV/Cable distribution. Imagine, if all the shows you wanted to watch were released on iTunes, and you have an AppleTV (or Mac/PC hooked up to your screen), and you paid Apple $1-2 per episode, you could cancel your $100/month cable/satellite and just watch, what you want, when you want, without annoying commercials!
New shows would be introduced by having the first few episodes free to get you hooked.
Reply
Billy K said 1:38PM on 9-19-2007
kakapo,
Your English is remarkably good for a non-native speaker!
Reply
ishcabittle said 1:44PM on 9-19-2007
@chad:
http://ipodnova.tv
Go ahead and download those shows. NBC would have gotten their revenue, if they'd stuck around, don't let their bad decision ruin your entertainment.
Reply
tim said 2:02PM on 9-19-2007
@kakapo -
your little attempt to remind us that we arent the center of the universe is 100% irrelevant. thats like saying if the australian dollar fails, its ok, because we've never even SEEN one, so you should be able to get along just fine without it.
nbc/universal is huge, in fact, they are too big to not play with. i think they just had too big of seasons the last few (heroes, earl, office, scrubs, etc...) and now they want to throw that power around.
could they become the sony of the content world? and yes, im aware of sony/bmg, but im referring to sony electronics now allowing others to play nicely, paying a premium for less features and being treated like crap while paying for it.
sure im an apple fanboy, and right now id be willing to snap my fingers and do a little dance fight against nbc, but i honestly think apple will pull through on this. either at the last moment nbc will resign, or else people without cable/atsc will just miss their shows this year.
however, does anyone have any statistics on how amazon unbox is doing? i mean, are we blasting a program that is actually doing well? or are we justified with our claims that its not going to touch itunes?
and just to be snide, all the people who say 'thats my 2 cents,' there was a guy trying to be cool like that last week and he put 'thats just my .02 cents' not realizing he said it was 2/100s of a penny...
Reply
minimalist said 2:48PM on 9-19-2007
"What Apple fails to realize is that the producers really do set the price."
Actually I'd say consumers set the price. Setting a price is worthless until people pay it. DVD sets have set the acceptable price of tv shows. Given the restrictions of downloaded video you can't exactly ask for more money for a more limited product.
I don't see why Apple is catching heat for this. Like NBC, they are merely looking out for their self interests. Apple is where it is because they value consistency and simplicity in all their products (and iTunes Store is just another product). Maintaining the integrity of their product is more important to them than diluting it to suit NBC.
I like what another poster said: the iTunes store isn't a democracy and it ain't a co-op. If you don't want to play by the rules you are welcome to go somewhere else. But NBC is going to need a small miracle if they are trying to charge MORE for their products and sell them in a format that 70% of the digital downloads market can't even play.
Who exactly do they think is going to download this stuff?
Reply
Whiplash said 4:17PM on 9-19-2007
I don't really understand the network's stance on this. Really, it's free money. They are producing the shows anyway. iTunes is simply one more way to cash in on a production that's already paid for.
You know, if it were me (being the media mogul I am), I'd give away the shows for free on iTunes, but include the commercials. Then I'd offer my advertisers the chance to run thier commercials on the iTunes version of the show.
Reply
Brian McBride said 4:33PM on 9-19-2007
Perhaps NBC just wants more of the per-sale fee? The price-per-episode is always going to be driven by consumers.
What I don't get is all the iTunes loyalty. iTunes runs ok on my Mac and runs like utter crap on Windows. Seeing that the majority of computer users are Windows based, I am thinking services like Amazon have a good chance.
Seriously, on a quite seriously outfitted gaming rig, Quicktime still has problems playing without odd jerks and jumps in the Windows environment where as the same file plays great on one of my aging macs.
I just don't see iTunes as being the end-all of all media delivery. Although the mac os is feeling more and more closed boxed every day for some reason, as a Apple user there might not be the choice.
Reply
Dan Woods said 4:50PM on 9-19-2007
@Whiplash, There are already many people disconnecting from Cable because they have more choice buying from iTunes; and they don't get commercials. If you put shows on iTunes with Commercials, Consumers would fast-forward through them.
Re: kapapo, Here in Australia, American TV Shows are purchased from FOX, ABC (America), CBS and NBC. The only way you haven't seen content from these providers is if you only watch ABC (Australia) and SBS (Which stands for Special Broadcasting Service, BTW).
Also, DVD Box sets of TV Shows are only available in Australia after they have Aired over here. You can buy Season One of Dead Like Me, but not Season Two. BSG Season 3 is still Unavailable.
So much for the Free-Trade-Agreement with the US.
Reply
stephen.hawkyns said 4:17AM on 9-20-2007
kapapo - your commensts are shortsighted. having lived in Australia for 6 years, what you fail to realise is that MOST of australian primetime is US shows, or shows from other countries that are broadcast in Australia. In addition, lots of music content is based on UNiversal, so them leaving the store not only affects the shows you watch, but also the music you can potentially listen to.
I would also probably ventur a guess that lot of the 'australian' content is produced in cooperation with large US entertainment companies like NBC/Universal, simply because they have the financing to produce these things.
Personaly,m although I did like some of the australian content (though blue heelers was off my list when dash left :), most of it is really poorly produced schleck with poor producton values.. Sorry, but that is my opinion.
Reply
Whiplash said 8:32AM on 9-20-2007
I am the Oracle! I suggested this just yesterday.
"NBC Brings the Most Popular Word to TV Downloads: Free
By SAUL HANSELL
TAGS: APPLE, DOWNLOADS, NBC, VIDEO
Until now, you can download commercial –free TV shows from iTunes for $1.99. Or you can watch streaming versions free with commercials on computers connected to the Web.
NBC today offered a third logical option: free downloads with commercials. The advantage of downloading is that the video quality is better and you can watch shows on laptops or portable devices. The value of free is …well you know."
However, this is going to fail miserably. Why? PC only. You have to use special software. The shows expire after a week. No Mac support. No iPod support. They still just don't get it.
Reply