August 31, 2007 3:24 PM PDT

NBC, Apple play game of brinkmanship

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August 31, 2007

NBC says bye to iTunes, hello to piracy and lost revenue


August 31, 2007

Apple slaps back at NBC in iTunes spat


August 31, 2007
A correction was made to this story. Read below for details.

news analysis An Internet game of chicken is being played by entertainment heavyweights Apple and NBC Universal, and the first round likely goes to Apple.

NBC Universal landed the first blow on Thursday night when someone leaked to The New York Times that the media conglomerate was refusing to renew its contract to offer downloads of TV shows via iTunes.

NBC never said that it would pull out of iTunes, but only that it was dissatisfied with the financial terms Apple offered. Then Apple raised the stakes by announcing it would not offer NBC's shows for the upcoming TV season and alleged that NBC Universal was asking for a price hike that would have required Apple to raise retail prices from $1.99 to $4.99.

When it comes to public relations battles, Apple is a devastating counter-puncher. The revelation about NBC Universal's demands is almost certain to rally consumers around Apple. To them, it appears that Jeff Zucker, NBC Universal's CEO, wants to stick his hands deeper into their pockets and Steve Jobs is protecting them.

But the long-term significance of the split between the two companies has more to do with control. This could be the start of a much wider struggle between Apple and the entertainment sector over who dictates prices at iTunes. The people who create music, movies and TV shows appear determined to push Apple off its pricing strategy.

Just ask Chris Castle, an intellectual property lawyer who once represented the original Napster but now owns his own music label.

"I think there is a general perception in the industry that we need to get tough with Apple and break the lock they have on the consumer market."
--Chris Castle, intellectual property lawyer

"I think there is a general perception in the industry that we need to get tough with Apple and break the lock they have on the consumer market," Castle said. "I think what's happening is that there is a general gestalt of 'Apple is a pain in the (butt) so let's help some other companies out. Let's do something to build up a retailer other than Apple.'"

Earlier this year, Universal Music announced that it would not renew a long-term contract to sell music via iTunes. Instead, the company opted for a series of short-term contracts. Universal is believed to have lobbied Apple for varying pricing levels.

Many in the music industry, including music publishers and performers, want Apple to be more flexible with pricing instead of locking the industry into a 99-cent rate for each song.

In video, NBC Universal, owned by General Electric, appears to be among the first to challenge Apple over pricing, even while downloads of TV shows and movies make up only a sliver of Apple's revenue.

Apple needs to have access to a wide range of content to keep iPod owners interested in their devices. Apple's iPod succeeds mainly because of iTunes; its simplicity, low prices and quality content. What happens if Apple lost access to the best music and TV shows?

"As long as Apple wants to sell TV shows and films, it's in their interest to offer as many content providers as they can," said Susan Kevorkian, an analyst with IDC.

To do that, Apple has to appease studios and record labels without alienating customers.

Allen Weiner, an analyst with Gartner wrote on his blog: "Apple must face the fact that charging flat rates for television programs of varying lengths and vintage will not resonate with an industry for which advertising is its lifeblood."

But the risks involved with bucking Apple are great. Apple has sold more than 100 million iPods. The iPod makes up more than 70 percent of the overall mobile player market. How long can NBC Universal go without access to iPod owners?

Even with the company's other distributors, such as AOL and its soon-to-launch Hulu site, which NBC Universal built in partnership with News Corp., Apple still represents one of Internet's largest video distributors.

NBC has to know that the concept of watching TV and movies downloaded from the Web still faces an uncertain future. Download times are often long, the quality is often inferior to television, and nobody has really answered the question of whether people need to watch longer-format shows on their computers when the TV experience isn't broken.

Other than YouTube, the video-sharing site that serves up snippets and 10-minute long clips, no other online video service has proven it can attract a big audience.

And trying to force Apple to offer tiered pricing could mean alienating the world's most influential consumer goods companies. What other new products and services could NBC Universal miss out on by angering Apple now?

Apple agreed to a long-term deal with EMI, and the two companies worked together on releasing music in an unprotected format.

Most likely, Apple will continue its tough stand with NBC Universal. It has to. If the computer maker gives much ground, other content companies may also play the brinkmanship game.

"The bad news for Apple is that after something like this, people start to question your dominance," Castle said. "Something like this happens and suddenly you got some tarnish on your armor."

 
Correction: This story incorrectly stated that NBC wants Apple to raise the wholesale price from $1.99 to $4.99. The prices are retail.

See more CNET content tagged:
Apple Computer, Universal Music Group, contract, pricing, Apple iTunes

155 comments

Join the conversation!
Add your comment
Apple is a target
This is just one of many problems Apple is now facing with iTunes.
Posted by DrtyDogg (3084 comments )
Reply Link Flag
Problems Who Doesn't
Apple - has problems? Apple is the best corporation - to work for - to own - their products and my stock!
Posted by FishbowlRM (2 comments )
Link Flag
You wish Apple had problems...
They have none in comparison to Microsoft, Dell, NBC, Universal.
Posted by macbrewer--2008 (410 comments )
Link Flag
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?
Posted by fastfashn (5 comments )
Link Flag
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".
Posted by planetboom (17 comments )
Reply Link Flag
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:

<a class="jive-link-external" href="http://www.petitiononline.com/newscifi/petition.html" target="_newWindow">http://www.petitiononline.com/newscifi/petition.html</a>

We need try to remove one stupid retard.

John
Posted by johncv01 (8 comments )
Link Flag
"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.
Posted by tisa2 (3 comments )
Link Flag
Why NBC ETC Blows
Reality shows
Posted by paulsecic (298 comments )
Link Flag
Bump!
Bump!
Posted by TheeBigBeast (2 comments )
Link Flag
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?
Posted by expatincebu (156 comments )
Reply Link Flag
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.
Posted by aka_tripleB (2211 comments )
Link Flag
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.
Posted by Too Old For IT (351 comments )
Link Flag
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.
Posted by montex66 (370 comments )
Reply Link Flag
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.
Posted by Gringras (29 comments )
Reply Link Flag
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!
Posted by bignumone (24 comments )
Link Flag
If I recall iTunes saved the office..
<a class="jive-link-external" href="http://digg.com/apple/How_iTunes_saved_The_Office_2" target="_newWindow">http://digg.com/apple/How_iTunes_saved_The_Office_2</a>
Posted by JonGoo (1 comment )
Reply Link Flag
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.
Posted by bignumone (24 comments )
Link Flag
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.
Posted by scr33ner (6 comments )
Reply Link Flag
be glad you get
a piece of the pie
Posted by scr33ner (6 comments )
Link Flag
$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.
Posted by moofer (64 comments )
Reply Link Flag
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%.
Posted by pdxmhatter (2 comments )
Link Flag
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.
Posted by Scrowshaw (25 comments )
Link Flag
The trump card is the Apple TV DVR sitting behind the curtain
nt.
Posted by aabcdefghij987654321 (1721 comments )
Reply Link Flag
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.
Posted by Josh Viney (7 comments )
Reply Link Flag
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.
Posted by aka_tripleB (2211 comments )
Link Flag
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!
Posted by bignumone (24 comments )
Reply Link Flag
NBC Joke
q: Why did the Peacock hop acros the road?

a: He shot himself in the foot.
Posted by Galaxy5 (391 comments )
Reply Link Flag
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.
Posted by swray (5 comments )
Reply Link Flag
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.
Posted by bmwrider1 (2 comments )
Reply Link Flag
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.
Posted by The_Raven (50 comments )
Link Flag
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$$ about the iTunes store, and a lot of my client's don't even realize that you can use iTunes to buy music, much less TV shows and movies (I work with a lot of baby boomers and senior citizens). for the average user, iTunes is just a way to put their cds into their ipod or to import all the songs they downloaded through bittorrent.
The iPod is successful because it's well designed both from a visual perspective and a simple user interface.
Posted by island-dave (3 comments )
Link Flag
Recording / Broadcast industry will lose
The DRM that is on the songs from any vendor store (Itunes, Zune etc) is a joke and is easily removed from the downloaded songs. I can't speak for video since I my pc to record and convert shows for my IPOD. Until the Recording/Broadcasting industries learn from their prior mistakes (not likely as they worship the $$$ 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.
Posted by jafarm66 (54 comments )
Link Flag
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.
Posted by MrStuckless (24 comments )
Reply Link Flag
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...
Posted by mickiavellian (33 comments )
Link Flag
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.
Posted by Xenu7-214951314497503184010868 (153 comments )
Reply Link Flag
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.
Posted by bobalooie (1 comment )
Reply Link Flag
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?
Posted by Wind_Freak (16 comments )
Link Flag
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.
Posted by GGGlen (491 comments )
Link Flag
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.
Posted by mickiavellian (33 comments )
Link Flag
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?
Posted by fastfashn (5 comments )
Link Flag
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 $@!%.
Posted by GGGlen (491 comments )
Reply Link Flag
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)?
Posted by whclevelandjr (52 comments )
Link Flag
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!
Posted by FishbowlRM (2 comments )
Reply Link Flag
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.
Posted by mickiavellian (33 comments )
Reply Link Flag
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.
Posted by Groucho6 (104 comments )
Link Flag
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-&gt;Fun &#38;
Apps-&gt;Media-&gt;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.
Posted by whclevelandjr (52 comments )
Link Flag
NBC vs Apple?
Personally I think Apple will win this, as proof of the posts here,
and also the successfulness of the iTunes store. NBC has done
nothing short of shooting themselves in the foot.

Do they really think $4.99 a show, even if it is retail is a good
deal? I buy rarely any season passes, $25 to $45 a season is
more than what the channel in many cases cost in a year... what
do they expect Apple to do say yes?

I won't even get into the argument that NBC are being controlled
by the same type of people, if not the same people who control
the Sci-Fi channel because we all know some of the very stupid
mistakes both companies have made, but I purchased the
seasonal pass for the Dresden Files, I got the videos for
$19.99...

I don't know about most people here, but I know Apple sees
very little of the profit with the music, I expect the same to be
said for the videos/movies.

It is good though that Apple is standing up for the little guy,
because right now I don't watch much TV because my work day
starts at 5:00 AM and ends around 8:30 PM... I refuse to buy
TiVo, or even get a premium package for products I mostly
never watch. For me iTunes is one of the only ways I get my
entertainment. I hope companies realize that I am not the
uncommon sub-class out there...

NBC is going to be having a rude awakening very soon I expect.
Posted by Matthew R. (37 comments )
Reply Link Flag
are you kidding?
over 4 years...itunes has sold 3 billion songs.

With over 100 million ipods sold, that's roughly 8 songs per ipod per year.

When you consider the market share apple were granted by the Record labels....Apple had exclusivity to the best and biggest music catalogues online, it's nothing short of a spectacular disaster.

It's no wonder the record labels are licensing to amazon, nokia and even wal-mart insisting on DRM FREE music, at a higher quality than itunes and at a similar/cheaper price.

Universal music have already pwned Apple, when they pulled out of their deal recently with itunes.

NBC pulling out suggests that Apple have failed, spectacularly, to learn from their earlier mistake with Universal music group.

I think Apple need to wake up and realise that the Earth don't revolve around Apple.
Posted by mickiavellian (33 comments )
Reply Link Flag
If that was true...
Then why does Apple still own over 70% of the entire market?
Posted by Matthew R. (37 comments )
Link Flag
How old are you?
Funny, considering during this time Apple is competing against
free, and nobody before Apple has come close to making digital
distribution a reliable business model.

Assuming your iTunes figures are correct, they really mean very
little. This is because most music is sold in physical stores. For
good reason, I can buy a CD, and have no DRM problems.
Moreover, I can legally make copies of the music on a blank CD
and give that copy away to friends. Media companies have been
doing everything they can to shoot themselves in the foot. First,
they want higher prices, even though the cost of distribution is
significantly less. Second, they are giving the artists less for
digital downloads. Third, they have fought for harsh DRM. It is
surprising Apple managed to get any deal out of these
bloodsuckers.

Let me also say, Apple wasn't given a market share, it created a
market share.

Let me also throw a few names out at you: MSNBC Universal.
That is right, Microsoft, NBC, and Universal are all closely related
business partners. Microsoft has been fighting Apple's media
dominance for years now. Universal wants subscription and
tiered pricing. So, the partners are partnering up to unseat
Apple. No surprise there.

Microsoft came out with the Zune, and Zune marketplace.
Universal didn't renew its contract with iTunes, but then goes
and enters a deal with Walmart where it gives Walmart all of its
content in DRM free format at roughly the same prices as iTunes
is offering for DMR free music. This is after Universal made a big
stink about how it wouldn't support DRM free music after Apple
was advocating it. Now NBC is claiming it will not renew its
contract with Apple.

These companies are greedy, pure and simple. They lobby
Congress to screw the public out of valuable rights, and then
sock it to you in terms of pricing.
Posted by TerrinBell (293 comments )
Link Flag
I'm impressed.
"over 4 years...itunes has sold 3 billion songs."

While you try to diminish Apple with these statistics, I am very
impressed by Apple.

Why?

Well Apple was able to sell 3 billion songs (at $0.99 each), in an
environment where people would rather download the music for
free than pay for it. Color me impressed.
Posted by whclevelandjr (52 comments )
Link Flag
Music these day
Music nowaday suck. Roughly 8 songs per year is worth buying
since the ipod was introduced. Most people use their mp3 players
for albums they already own... the time when music use to be
good. So i don't think people want to buy a whole albums when
they have the choice to buy the best tracks.
Posted by GSRich78 (30 comments )
Link Flag
Not a logical argument
I noticed that you have been bashing Apple pretty consistently with the insufficient number of songs sold per iPod sold reasoning. I have bought about 60 or 70 songs from the iTunes music store - out of convenience. I don't even own an iPod anymore because I noticed I am not listening to music on the go much. I already owned about 200 CDs. I am still buying some SACDs. SACDs using my PS3 sound great on my Klipsch Reference Series speakers and H/K AVR 745 receiver. Many of the hybrid SACDs I buy are $10 each on Amazon. Why would I pay $10 for an album from iTunes for 128kbit/sec AAC. You cannot blame Apple for the pricing. The RIAA stipulates the prices! They actually want to increase it. While 8 songs per iPod is not that much, you are forgetting that 3 billion songs by one store is pretty good. They are the 3rd largest retailer now. I guarantee you NO other online store will be able to catch up with iTunes.
People's tastes are changing. People have more things to do now. If people are doing more things like internet, video games, etc, there is just not enough time to purchase and listen to music now a days. While the iPod did allow people to bring their music out and slow the decline of CD purchases, it has not stopped it and that is the truth. You cannot blame Apple for that.
Posted by bommai (172 comments )
Link Flag
Smug Bully Steve Jobs
Steve Job's philosophy is to unilaterally dictate terms, conditions, and prices, to others. It's about time that somebody told him to take a hike.
Posted by john55440 (1020 comments )
Reply Link Flag
So you don't like itunes prices? You want higher?
Yeah, that makes sense.

I guess your not a consumer but a provider?
Posted by technewsjunkie (1265 comments )
Link Flag
It's his store, if he doesn't want to sell for that price he doesn't have t
What is your problem? Don't you like buying songs from Wal-
mart? Apple isn't going to stop you from buying it elsewhere, or
putting it on your iPod unless you are so incredibly stupid as to buy
in a Microsoft format. (They don't even support it on their own
Zune (wanna-be iPod).
Posted by macbrewer--2008 (410 comments )
Link Flag
I'll assume that you use Bill Gate's Windows
MCP operating system then?

I prefer to use something a bit less... 20th Century.
Posted by fastfashn (5 comments )
Link Flag
Illogical, Captain
Maybe you didn't read the story?
Maybe you did, but weren't able to understand the Really Big
Words?
NBC tried to bully Apple into a price hike.
NBC wanted to charge $5.00 per episode to download a TV show.
Apple said "No".
Do you feel silly yet?
Posted by GGGlen (491 comments )
Link Flag
So...
It's exactly the same as NBC/Universal?
Posted by Deelron (60 comments )
Link Flag
An Open Email to NBC Universal
www.stonethembas.com
Posted by ppgreat (1128 comments )
Reply Link Flag
open letter to Apple
hi Steve &#38; co.

Please note that the World doesn't revolve around Apple anymore.

Content Is King.
Posted by mickiavellian (33 comments )
Link Flag
NBC was the network that cancelled Star Trek
Doesn't look like much has changed since 1968/69.
Posted by fastfashn (5 comments )
Reply Link Flag
 

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