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Report shows Apple needs NBC back, like yesterday

A report issued by Forrester Research suggests that contrary to conventional wisdom (or at least the comments here at TUAW), Apple is the loser in their feud with NBC-Universal. The on-going fight, which reached fruition last week, as all all NBC-Universal content was removed from iTunes, hurts Apple more than it hurts NBC. James McQuivey, an analyst for Forrest Research, urges Apple to make-up with NBC, otherwise they risk losing their spot as a major source in the distribution of online broadcast content. Why? Because although iTunes dominates the world of digital music sales, the same cannot be said for iTunes video downloads.

According to the report, which was quoted by CNET, Apple relies on NBC to deliver 30% of their video download sales. This is in line with the 40% figure claimed by NBC in October (I say we split the difference at 35 or call it a third). Furthermore, a Forrester study revealed that only 19% of users buy video content (either TV shows or full length movies) from iTunes and of that 19%, the average amount spent on videos is $30. Meanwhile, competing pay services like Amazon Unbox and the free offerings provided by the networks own websites and through services like the Fox and NBC collaboration Hulu.com make paying for an iTunes download, just so you can watch it on an iPod or Apple TV, less inviting or appealing to users.

To me, as an avid television watcher/fan and an avid gadget junkie, this makes complete sense. I have a truly frightening collection of TV shows on DVD (just the TV show sets take up almost an entire IKEA Billy Bookcase), I'm also a full-fledge iTunes addict for music -- but I can't recall ever buying a TV show or TV episode from iTunes, even though I've had a 60 GB video iPod for two years. Instead, I have two TiVos, but in the event that I do miss an episode of a show, I am more than fine with streaming that episode on my computer (where I would be watching the iTunes video 99% of the time anyway). If I want to buy the content, I'll buy the DVD, not a lesser quality DRM-ed digital version that doesn't have any extra features and that can't be easily moved place to place. I think the big argument of, "oh, you can watch TV shows and DVDs on your iPod" is better in theory than in practice. In theory, I'd have tons of videos on my iPod. In practice, I have the Guy Love video promo from NBC/Scrubs last year (oh, the irony), an episode of the Squadcast and a video clip of Blake Lewis from American Idol that I put on my iPod, just because they (meaning Fox) said it couldn't be done.

Furthermore, while some of the streaming or direct download programs are un-Mac friendly, Hulu, though still in beta, works great on my Mac, features new episodes and tons of older TV shows - many of which are currently (or were previously) available on iTunes, with minimal advertisements and streaming quality that is, I've got to be honest, absolutely as good as what you get from an iTunes download. And it's free. As I said, if I'm going to be watching the content on my laptop anyway. Certainly, this isn't the case for every user out there, but this report indicates that as it stands, not that many customers are buying video content off of iTunes anyway.

I would love to see NBC and Apple make-up -- if only so the NBC-branded podcasts would return to the iTunes directory or so that we could get free episodes every now and then -- but I tend to agree with the outcome of this report, even if Apple isn't the "bad" guy in this war, it's still the company that has more to lose from this break-up. Maybe Steve Jobs and Jeff Zucker should take negotiation advice from 30 Rock's Jack Donaghy (Alec Baldwin). Then again, maybe not.



A report issued by Forrester Research suggests that contrary to conventional wisdom (or at least the comments here at TUAW), Apple is the...
 

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Robb

Well, I think both Apple and NBC/Universal end up being losers... NBC/Universal loses out on the revenue being generate from iTunes and Apple's video library is diminished with NBC/Universal content being pulled.

I'm not one to push video content to my iPhone anyway, so I rarely downloaded shows from iTunes. I also prefer watching shows on my TV, so it's unlikely I'll be running over to Hula.com to watch "My Name is Earl" anytime soon.

If Apple plans on expanding the functionality of the AppleTV to a full-fledged video service independent of a Mac or PC, then they'll need to figure out a way to bring NBC/Universal back into the fold (maybe a similar arrangement that they're working with Fox).

December 07 2007 at 2:45 PM Report abuse rate up rate down Reply
Catt

Josh has some good points...

December 07 2007 at 2:15 PM Report abuse rate up rate down Reply
josh

The value of iTunes is more than just video quality and lack of commercials. Think about how your lives changed when you no longer had to carry around Case Logics full of CDs with you.

The value of iTunes is that you can index and search every episode of a show, syncing them to your mac/television/ipod. And let's not forget you can also use the video-out on your iPod or iPhone to take the videos with you and watch them on someone else's TV, DRM-be-damned!

So while hulu.com might be cool, it doesn't offer all the convenience of having each episode searchable and available whenever or wherever you want (internet or no) like iTunes does. And with regards to physical DVDs, yes you do get extra features and higher quality video, but the convenience is arguably worse since you can't rip them* (DVDs have DRM too, remember) and you can't put them on your iPod or iPhone, and you can't take them all with you in your pocket like you can with your new 160GB iPod Classic.

iTunes videos actually offer MORE portability since you can watch them on any television through Apple TV or the video-out from your device, you can watch them on your computer, AND you can watch them on the device itself. Plus, I have a feeling that iTunes video quality will be increasing to HD soon, and then all we'll need is some way to encapsulate the extra features found on DVDs.

*FWIW, I know you CAN rip DVDs to your computer, but you have to get around the copy protection and it's definitely not supported. By the same token, if you really try you can remove the DRM from iTunes videos as well.

December 07 2007 at 1:19 PM Report abuse rate up rate down Reply
Johnny Thrash

I'm not interested in watching the stuff on the websites with the Windows only markings, advertisements and all that. For me it's iTunes or nothing. NBC loses with me, cuz I just won't bother to watch anything I can't DVR.

December 07 2007 at 10:25 AM Report abuse rate up rate down Reply
Chris Tucker

iTunes programming = $1.99 per episode. Apple hardware lock in. Selection limited to US content and US customers.

Miro + RSS + BitTorrent = $00.00 per episode. Play anywhere on anything. If there's an RSS feed for it, selection is unlimited, unrestricted, and worldwide.

To elaborate, I had episodes of Torchwood, a BBC series only recently available in the US on BBC America (and in an edited form, so as not to offend our dainty American sensibilities) and Doctor Who and The Sarah Jane Adventures and Scrapheap Challenge and The IT Crowd (to name but a few) on my hard drive within hours after they were originally broadcast in the U.K.

All downloaded automatically, while Miro ran in the background as I used my Macintosh to do other things.

I also use Miro to download episodes of US programming that I want to watch, when I want to watch them, not when some scheduling drone decides when I can watch them. Oh, and they're commercial free, too.

So, why do I NEED iTunes and hulu or any other pay service for video?

As far as I'm concerned, the Internet is my personal Digital Video Recorder.

Now, when it comes to music, I Use iTunes to buy individual tracks and the occasional album. I LIKE iTunes! I like the prices. I like the quality. I like the convenience.

December 07 2007 at 10:02 AM Report abuse rate up rate down Reply
nyleharris

James McQuivey says nothing but rubbish. I'm surprised his dart-board logic ended up on tuaw. You can catch most of his writings and "independent research" on cnet.com, usually wrong. This is the same guy who said that iTunes sales were falling, and then announced that iTunes was responsible for 20% of all music sales in the US. Worst part is, for a person who holds a doctorate, he sources none of the information he presents as facts.
I would have expected more from a Syracuse grad.

December 07 2007 at 8:58 AM Report abuse rate up rate down Reply
something

HA! I told you!!

December 07 2007 at 8:18 AM Report abuse rate up rate down Reply
ShaleX

I love how applefanboys believe iTunes is a Store, a digital retailer when this argument comes up, but if I star talking about that Monopoly that iTunes has by being locked to one DMP, it's all of a sudden just a service or format.

if iTunes were open, then I could see NBC regreting the situation. But there is still 25% of the market who can't get or use this product, Compare that to the 12% of mac users who can't load Hulu.

iTunes is riddled with DRM, at least the music can be burned to a CD and re-ripped DRM free, but not the video content. iTunes stuff is locked to 2 devices, my laptop and my iPhone. That neglects my Xbox 360, PS3, PSP. Is Hulu better? Nope, but i'm not paying any money for it. But it's not like Apple has any incentive to innovate the iTunes experince. That's why you don't have HD downloads yet. Funny how a $300 device that can only be used on a HDTV CAN'T PLAY ANY HD CONTENT!

Does Apple really care? No, cause you're in their walled garden. If you want to watch iTunes stuff... the number three retailer in the country, you have to have Apple's products. Your only choice. After you bought your videos... and you say, upgrade to a non-apple product, guess what, you just wasted all your money.

So what i read here, is it's a mistake to lock out 12% of the PC population, but it's not a mistake to lock out 25% of the DMP population.

Death to the Monopoly, Open up iTunes, Apple.. Seperate the program from the store, and then we'll talk.

December 07 2007 at 7:54 AM Report abuse rate up rate down Reply
Ron Hebshie

Those wacky doomsayers at Forrester Research are up to their madcap ways again! Less than a year after being forced to "clarify" their false report that iTunes sales were collapsing (and blaming it on reporters "misunderstanding" the data), they are back with yet another inane article. Yawn. How many of the "Apple/iPod/Mac/iTunes is dead" articles have come true? None. If you think Zune is really an iPod killer, can't get enough of Windows VISTA and believe Hulu.com is a site that is going to revolutionize online video downloads, then maybe this Forrester crap resonates with you. For the rest of us, the blather from James McQuivey deserve little more than a chuckle.

Here's the cold, hard facts about NBC: Their biggest series is a crappy game show hosted by Howie Mandel. None of their sit-coms crack more than 7 million viewers a week and all of them are down or flat this year. Their much-touted "Bionic Woman" is a flop and "Heroes" has shed several million viewers this season and already seen the planned spin-off get the shelf. Their "big" mid-season series are a revived "American Gladiator" and "Celebrity Apprentice." Oh, I can just hear the excitement rippling across America with winners like that coming. Keep in mind, both of those clunkers were given the green light BEFORE the writer's strike. Who knows what gems Ben Silverman and his boss Jeff Zucker will spring on us next? NBC has shown time and again that their could care less about you and me, the viewers at home. They pulled their YouTube partner channel. They pulled their content off iTunes. The streaming video experience at nbc.com is a joke (no full seasons) and now they think the masses are going to fall for the Hulu.com ruse. Yeah, good luck with that. When NBC let their greed get the better of them and they decided to pull the plug on iTunes that just made this busy TV viewer do one thing...pull the plug on NBC.




December 07 2007 at 5:25 AM Report abuse rate up rate down Reply
Dennis Lee

Being that unbox is for windows only, it blows. I'm happy i could buy dexter on itunes and watch it full screen on a 20 inch lcd. Which doesn't bother me at all.

What DOES bother me, is that battlestar galactica is no longer available. i hope nbc pulls their heads out of their butts

December 07 2007 at 4:55 AM Report abuse rate up rate down Reply
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