Comments on: NBC, Apple play game of brinkmanship

news analysis A day after reports said NBC would not renew its iTunes contract, Apple announces it will not offer NBC's new TV shows. This spat is about control.

[DrtyDogg]

Apple is a target

This is just one of many problems Apple is now facing with iTunes.

[FishbowlRM]

Problems Who Doesn't

Apple - has problems? Apple is the best corporation - to work for - to own - their products and my stock!

[Macbrewer]

You wish Apple had problems...

They have none in comparison to Microsoft, Dell, NBC, Universal.

[fastfashn]

Such as?

I use iTunes to get music and TV and movies because it works. In
two or three years, I've never had a glitch. The pricing is
reasonable.

So, again, what problems?

[planetboom]

Retards must be running NBC...

I love this quote... "What happens if Apple lost access to the best
music and TV shows?" Excuse me? Best TV shows? Aside from
Heroes, what does NBC have worth watching? If NBC were the
number one non cable network with multiple top 10 shows, I
could see why NBC may play the power trip game. Hasn't NBC
finished last in the ratings for last few years? So let me get this
straight... NBC, in an effort to make up for cash lost due to poor
programming, wants to stick it to the few people who are
actually watching their retarded programming? Rather than
finding new revenue streams, perhaps Zucker and Co. could
spend some time finding and hiring people who know how
program quality shows vs things like "Who wants to screw my
sister".

[johncv01]

Same Retards are also running SCI FI Channel...

The same thing is happening at the SCI FI Channel, also own by
NBC/Universal. The stupid retard name Bonnie Hammer cancel
a good show like ?The Dresden Files?, but thinks ?wrestling? is
SCI-FI.
Please visit ?New Leadership for the SCIFI Channel at:

http://www.petitiononline.com/newscifi/petition.html

We need try to remove one stupid retard.

John

[tisa2]

"CNET reporters"

This is a typical way to slant the news instead of just reporting the
facts. It is a basic violation of Journalism 101. You always have to
be on guard.

[paulsecic]

Why NBC ETC Blows

Reality shows

[TheeBigBeast]

Bump!

Bump!

[expatincebu]

Media giants are just GREEDY

For to long they could get away with charging whatever they
wanted and they cannot stand that one company is bucking their
monopoly. And they wonder why people pirate their music and
video?

[aka_tripleB]

I agree with you mostly

but I do see the point of charging different prices for different length content. So maybe they should be split into: 30-min., 60-min., and movies. But studios should worry more about pushing DVD sells. After all, I can't think of anyone whould whould argue that is a vast improvement over what Apple offers.

[Too Old For IT]

Oh yeah, and indie talent is greedy too ... NOT

Everyone wants to go back to the days when the talent behind the content made millions directly via free downloads ... no, that business model never worked either.

NBC has one factor down: I, as the owner and producer of my art should be able to set the price, get what the market will bear, and not listen to what someone has to say.

If I want to work all year long on a project, and then distribute if for free, then it is up to me. (Do not start salivating yet, RMS ... not gonna happen.)

If, on the other hand, I want to determine the distribution channel, and charge a fair price, then I should be able to. Just because someone else believes "the software wants to be free" or some other euphemism for "I wanna steal your hard work" does not make it so.

[montex66]

Greed

So where is the part about NBC wanting to offer it's old,
syndicated shows at less than $1.99? OIC, they didn't. They just
want more money. Lots and lots more money.

I applaud Apple and Steve Jobs for standing up to these greedy
bastards. I LIKE that I can expect to pay a flat rate for my
entertainment. If NBC/Universal had their way, everything would
be tiered and overtly complex. None of it justified.

I think I'll be taking a look at this "torrent" thing I keep hearing
about. Since the greedy record companies and networks are
scheming for ways to get more than I'm willing to pay, finding
out how to get the same thing for free should be worth the
learning curve.

[Gringras]

It's hard to be an honest customer these days.

If you are honest, play by the rules and expect to get good value
for your money, life is hard. The RIAA is out to get you, Sony is
out to get you, Miscrosloth is out to get you. The cable/satellite
companies are out to get you. What's a poor consumer to do?
Then along comes Apple. They have a good idea and customers
are happy. Customers pay, they get value, Apple gets money. It
would seem like that was a good thing. If these companies aren't
treating you like a criminal and accusing you of piracy (ala,
Microsloth) then they want to push you into crime (RIAA/NBC).
Foe Pete's sake. iTunes has SOLD 3 BILLION songs. Those aren't
pirates, those are customers. And that is $2,970,000 plus tax
that someone got to split up. Greed knows no bounds.

[bignumone]

I think you are missing a few zeros

$2,970,000? Isn't it .99 a track? So that would be $2,970,000,000
they could split up! Can you imagine? And my understanding is
that Apple's take is actually fairly small!

[JonGoo]

If I recall iTunes saved the office..

http://digg.com/apple/How_iTunes_saved_The_Office_2

[bignumone]

I did not know that!

That makes me think even less of NBC.
Proud as a peacock my hind end! Now I am going to avoid their
programming.

[scr33ner]

Get real...

Sorry entertainment guys. Unfortunately, you are at a severe disadvantage. Fact of the matter is, many people are putting your copyrighted material online.

The majority of this copyrighted material has been released by an insider. This is true because The Bourne Ultimatum movie that recently released in theaters has the watermark, ooopsy! "Universal Studios".

Oh by the way, did I mention the time stamp, at the bottom of the screen.

[scr33ner]

be glad you get

a piece of the pie

[moofer]

$4.99 an episode? NBC... have you lost your minds?

You've got to be kidding me. No one in their right mind will pay
that type of fee for the crappy programming you're producing
these days. If it weren't for iTunes, "The Office" would be dead.
You should be licking Apple's toes.

As for "Bionic Woman" - I was looking forward to watching that
show at the gym. No longer, I guess. They're just going to drive
everyone to the bit torrent sites. Media companies seem to think
that people only buy iPods because of the music store. Harsh
reality check for them - Apple sold butt-loads of iPods before
the music store sold a single video, and they will continue to do
so. The pirates will just become mainstream again.

[pdxmhatter]

Licking Apple's toes

moofer: It seems to be obvious that you must be licking Apple's toes. $4.99 an episode price is APPLE's PR spinning what NBCs demand for higher wholesale pricing. Here's a thought... why in the *$$* should Apple get 50% of the price of the show when all they are doing is completing the transaction?!?

The real demon here is Apple. The ONLY reason a show would cost $4.99 is because Apple is wanting to mark up what NBC is asking for by 200%.

[Scrowshaw]

Its called bargaining.

You know... apple says we will charge $1.99.
Then NBC say, we want $4.99.

Then in theory apple comeback and say, well $2.50, etc,etc.

Its quite common in business, clearly you have no idea what you are talking about.

Apple (how unusual) want to control the price, in Australia this is called Price-fixing, and gets you in trouble with the ACCC (Australian Competition and Consumer Commission).

NBC believes - their shows are worth more than some others. Sounds reasonable to me.

If NBC wants to charge more for their shows, than HBO, or A.N Other, then why cant they? The market will dictate if this new pricing strategy is successful; not a few forum nobodies.

If NBC dont want to sell on iTunes at all, they are also within their rights

Apple are worried that by charging more on iTunes for NBC content that they could be affected in 2 ways:
1. They wont sell as much, due to the higher price, especially if offered elsewhere for cheaper, or people just wont buy as much full stop.
2. they are also worried other providers might try the same thing. Fair enough. Apple are also within their rights.

BUT, its for Apple and NBC to decide. If Apple want the business, they meet the asking price, if they dont, they should stop whinging. If NBC arent happy with the price, take it to someone who will pay it.

I am sure there are plenty of online stores who would love some quality exclusive content which apple do not have.

And Moofer, if the programming on offer from NBC is soooo crappy, then why are you even replying to this story? If you dont want it, the price hike, or the decrease in availability, shouldnt affect you.

But of course, your an apple fanboy who loves his Ipod and are really shattered by the decision. This is because you cannot buy your content from any other store and play it on your device.

This must be the apple advantage.

[aabcdefghij987654321]

The trump card is the Apple TV DVR sitting behind the curtain

nt.

[Josh Viney]

Ridiculousness

It's not the consumer's fault or Apple's fault that content providers (record labels, studios, etc.) IGNORED the potential of Internet distribution. Many people are too busy to sit on a couch during "prime time". I would wager that many folks who purchase shows on iTunes would otherwise never have taken the opportunity to watch. Interesting that NBC is willing to risk so many new audience members.

[aka_tripleB]

I disagree with you there

The people who are too busy to sit on a couch would never pay to start watching a random show. That's what TiVo was for. And now with TiVo ToGO, it's even less likely they'd turn to iTunes. Really, I can't think of any good reason to pay per episode, or even for a subscription or TiVo. I built myself a Media Center PC, which works very well. I can even watch show in HD. Sure, there are commercials, but I can skip through them rather quickly if I remember I can.

P.S. I did not build the computer specifically for a DVR, it's just a perk I put in when buy all the parts. And you can get a TV tuner for other OSs if you don't like Microsoft.

[bignumone]

I don't need NBC

To be perfectly honest, there is enough free content out there I
don't need pay-for TV. And I have all the music I need in my used
CD library that I rip to the iPod.
Let's break the greedy recording executives. Don't buy their
garbage at their high prices...if at all!
I am not an SJ fan, but YOU GO, Steve!

[Galaxy5]

NBC Joke

q: Why did the Peacock hop acros the road?

a: He shot himself in the foot.

[swray]

How much is enough?

NBC (and the other networks) gets paid by broadcast advertisers the first time a show airs and then again by a different advertiser every time it repeats in the season, it then collects additional revenue when the network boxes the same thing up on a DVD at the end of the season, it gets a piece of the rental market and it gets a piece of the action when it is sold in iTunes. Finally, they get a piece of the action when it goes into syndication. The current network thinking is what got the record companies into trouble a decade ago. Reduce costs and selection all the while you gouge the consumer!

In the last 15 years these broadcasters have been consolidating ownership and profits under considerable government fostering of near monopoly market structure while receiving special pricing consideration for digital broadcast spectrum licenses. These same cash rich corps could have pioneered or backed iTunes precursors but their executives and boards were too busy discrediting the idea as having no potential. Now that iTunes is starting to rival Walmart as a distribution channel they want to crash the party. Why? Because they want to be paid more for doing the same or less all without risking a penny or increasing distribution costs. Six companies control the recording industry, and about them same number of companies control television; what we need is not more iTunes competitors, but more competition in the broadcast industry. You want to keep prices low, then expand the number of content providers. More networks, more diverse and plentiful content, and the more competition for the available number of dollars. There is a reason why cable programs, and smaller networks have some of the best content. They actually still believe in differentiation and competition.

[bmwrider1]

Apple needs iTunes to make the iPod Successful?

I beg to differ. The iPod is successful because it is the best
designed, best sounding mp3 player in the world. To be sure the
combination of iTunes and iPod is seamless, elegant and a large
part of the enjoyment factor, but it is by no means the only reason
for the iPod's success.

[The_Raven]

Poor poor NBC

What do you expect from an analyst? They like to hear
themselves talk.

The iPod was a successful player before iTMS ever existed. Now,
it's even more so because of the elegant simplicity that's been
designed into the iPod/iTMS content buying experience. That's
why it's so popular, not because of some perceived lock-in
imposed by Apple on the buying public. If anybody imposed
anything on anyone, it was the industry that demanded content
be "protected" by DRM. They created this monster and now they
don't know how to kill it. Steve Jobs gave them the antidote
back in February when he implored them to drop the DRM.

I'm sure Apple will sell millions of new iPods and iPhones to new
customers throughout the fall and holiday season. Too bad that
NBC be part of the content buying frenzy that ensues.

Apple created this market for NBC, etal and successfully
convinced consumers that it was reasonable to pay $1.99 for
content that could be obtained legally for absolutely free.

[island-dave]

I'm with you on that one!

I really think that the joker in this article is making some leaps of logic. I could give a rat's a$$ about the iTunes store, and a lot of my client's don't even realize that you can use iTunes to buy music, much less TV shows and movies (I work with a lot of baby boomers and senior citizens). for the average user, iTunes is just a way to put their cds into their ipod or to import all the songs they downloaded through bittorrent.
The iPod is successful because it's well designed both from a visual perspective and a simple user interface.

[jafarm66]

Recording / Broadcast industry will lose

The DRM that is on the songs from any vendor store (Itunes, Zune etc) is a joke and is easily removed from the downloaded songs. I can't speak for video since I my pc to record and convert shows for my IPOD. Until the Recording/Broadcasting industries learn from their prior mistakes (not likely as they worship the $$$ not common sense) people will continue to stick up their collective middle finger at the RIAA, Viacom, NBC Universal, etc and use illegal means of getting the programs.

I personally think $1.99 price is fine for episodic TV, maybe 2.99 or 3.99 for made for TV movies. I'd give the broadcasters props if they'd offer "Uncensored" versions of shows for $2.99 or $3.99 so adults don't have to watch the "Kiddy" version of a sitcom or drama series.

[MrStuckless]

NBC... Want more money? Offer a lower price.

It's a well known fact that most people will not pay more than a
buck an episode for something they can already watch on cable
and it doesn't make much sense to spend the same amount
downloading the first season of a show you recently discovered
at the same price you can buy the CD.

Increasing the price will only mean more people will download
the shows from pier to pier sites for free.

I already pay a lot of money for Satellite tv with PVR so I can
watch what I want when I want it (and skip the commercials),
and I still go to the theaters to watch any movie that I can't wait
for. What would make me download a tv show from iTunes? If
it cost less money for equal quality.

Just think, by the time the Satellite company passes on to the
networks the fees for what I pay, they are getting only a
miniscule amount of money. even if I were to pay less for the
shows online, the networks would be getting more of my
money.

As for advertising money, i have PVR (TIVO) and so I skip the
commercials anyhow.

[mickiavellian]

you're not thinking this through properly

The cost of a show is $1.99 so let's say iTunes takes 49 cents on each sale. So, for the sake of argument NBC grosses $1.50 on each sale.

Hypothetically, let's say it takes roughly 50 visits by iTunes members before someone decides to buy the video.

That means for every 1000 people that comes looking for their shows NBC makes about $30 in sales. That's obviously a hypothetical ratio and probably on the optimistic end of the scale.

Which sounds great, doesn't it? It does until you realise that if people know the entire season of that show that they love is free on NBC.com they will definitely go there. Free means that 1000 potential viewers on ITunes turns into 50,000 definite viewers on NBC.com.

Still with me?

Each video advert on NBC.com is worth $20+ CPM, which means they make at least $20 for every 1000 viewers per ad. At 4 ads per episode, that's roughly $80 per 1000 viewers.

So, not only will they make more per 1000 people who come looking for their shows, if they focus on NBC.com they will also get 50x more viewers.

Now do you understand where the $4.99 price point came from? It basically matches what they make from the free stream.

I'm not saying that's right or wrong, I'm just pointing out the economic logic behind how NBC might have arrived at the $4.99 price point.

Of course, an equally logical argument could be made that NBC will actually lose paying customers to illegal bit torrent downloads or P2P - where the adverts will probably be stripped out - but, they face that threat anyway and for my money, I would tend to follow the quality route...i.e.

Offer consumers a low quality stream/download for a low price point as well as offering a medium/high quality version for a slightly higher price.

Which is the variable pricing model that Apple fought for years with itunes music because they insisted consumers wouldn't "get it".

And how wrong were apple about that?

After years of fighting the music industry over variable pricing...Apple quietly introduced it this year, with the "next big thing" promotions after EMI's offering of higher quality DRM FREE versions of their catalogue...

[Xenu7-214951314497503184010868]

Greedy Media Pigs at the Trough

NBC and Universal just don't get it. Your products are worth exactly what they're being sold for on iTunes. Ask more and we won't buy. And if you try to sell it elsewhere, we won't buy it either. Wake up and realize that the market for your products is more efficient than it has ever been and you can't rip us off any longer.

[bobalooie]

apples and oranges

The apple doesn't fall far from the tree. Steve Jobs will do to the ipod and itunes just what he did to the mac. Time to start shopping for oranges.

[Wind_Freak]

what the?

Are you talking about the same mac that is greatly growing in
numbers and had what was it 24% growth last quarter? That same
Steve Jobs and that same mac?

[GGGlen]

Oh my

NBC says "BOHICA", and your response is to put your hands on your
hips and wait for it?
Man, I'm glad most people choose not to live in your Bizarro World.

[mickiavellian]

pearshaped apples

It's difficult not to be surprised at what's happening with itunes.

Over 4 years:

100 million ipods sold
3 billion songs sold.

That works out at 30 songs per ipod over 4 years or about 8 songs per year, per ipod.

When you consider the market share they were granted by the record labels (up until recently, Apple were one of the only companies to have such a rich catalogue of musicto sell online) it's not surprising that record labels are turning to Amazon, Nokia, even wal-mart, insisting on DRM FREE music to envigorate a market that Apple have failed spectacularly to capitalise on.

[fastfashn]

apples and oranges: reader comment from bobalooie

"apples and oranges: reader comment from bobalooie
Posted on: August 31, 2007, 11:25 PM PDT
Story: NBC, Apple play game of brinkmanship
The apple doesn't fall far from the tree. Steve Jobs will do to the
ipod and itunes just what he did to the mac. Time to start
shopping for oranges"

Hello Windows troll. I understand that George W. Bush needs a
few good people to keep him from imploding before the end of
his term. Thinking of signing up?

[GGGlen]

I will scream

The next time someone in the press/media utters the garbage
"Apple has a lock" on music, video... whatever, I'm going to
scream.
APPLE DOES NOT HAVE A LOCK ON ANYTHING, GOT IT?
Apple is in the enviable position of market leader, because we,
the CONSUMERS, CHOOSE to shop iTMS.
Quit trying to color articles with these "weasel words" in some
lame attempt to spin a story.
There aren't any Apple Ninjas in my house.
No one from Apple is pointing a gun at my head.
I LIKE shopping Apple, and I CHOOSE to shop Apple.
It's time these slimebags get called out, each and every time
they talk $@!%.

[whclevelandjr]

Don't worry about the Nokia salesman

They spew the "lock on the market" crap, because that is the mode
of operation they are familiar with.

Hey Nokia, how about putting a standard headphone jack on your
media capable phones (w/o charging $20 for an adapter)?

[FishbowlRM]

NBC/APPLE

Query...NBC.are they only cutting the lines to the main station...or all the other stations we all watch now.

Apple - long ago they said "Don't worry about them - they only have a small targeted market niche - they will never be ??? LOL.......

Apple - the power to be their best - and their Ad Man - Bonus round for whatever price - they do it well!

[mickiavellian]

correction to the article

The article states that "The iPod makes up more than 70 percent of the overall mobile player market."

That's not true.

Between April and June of this year, Nokia, alone, sold 100 million music/media player/phones. That's more than 1 million music player/phones a day.

I just thought I would point that out.


The idea that Apple is baulking at charging their customers a high price for something is actually very funny. Apple don't seem to have a problem charging $4.00 for TV shows in the UK. (£1.89 sterling is about USD$4).

What's fascinating about the NBC/APPLE fracas is that you would have thought Apple would have learned (the hard way) the importance of content when Universal (music) pulled out of their deal with iTunes earlier this year.

It seems Apple still think the Earth revolves around Apple.

[Groucho6]

Bah

NOKIA? Are you serious? You're comparing iPods to crappy cell
phones? Give it a rest, you NBC apologist.

For the record, the networks make their money long before the
point where they sell shows to Apple to resell to iPod owners.
They have made it on first run and second run and syndication
and DVD and ancillary rights. It's all gravy to them, but there's
another five letter word that begins with G, and of course that is
GREED. This little turf war is all about more and more greed.

I stopped watching network television when it began feeling like
there were more commercials than content (greed greed greed).
I *might* pay Apple's prices for conveniently downloadable
shows that pique my interest. I certainly won't pay NBC's idea of
what those prices should be.

As David Letterman once said, you know what NBC stands for --
Nothing But Cash.

[whclevelandjr]

Nokia

Wait... you're spewing figures on Nokia as a MP3 player? I got a
brand new Nokia (complete with stereo output and FM receiver)
and I only picked it to replace my broken Razr because it was
free and it supported bluetooth.

I rather use my 3 year old Creative Zen Micro than this brand
new phone to listen to music.

Why?

1. Stupid Nokia audio plug.. Come on Nokia your stupid
headphones are made worse that god awful square
multipurpose jack. Also, why force me to by and adapter to use
a standard headphone?

2. Crappy menu system... It makes the Creative menu system
look great. Why should I have to delve through Menu->Fun &
Apps->Media->Music Player to turn on or off the player.

3. Battery life sucks for a phone why would I make it worse by
using it as a music player.

4. Why can't I listen to music through my regular old bluetooth
headset? Why am I required to use the awful wired stereo
headset or buy an expensive stereo bluetooth headset?


So my point? == I have a brand new Nokia media phone and I
never use it for Music. I use it for a Phone... However, I am sure
all the people who purchased an iPod doesn't use it as a phone
but as a music player. If they wanted to use an iPod as a phone
they would buy an iPhone.

So your number is a totally inappropriate measure of Nokia's
penetration into the music player market.