NBC, Quit Embarassing Yourself
10/29/07 05:26 PM Filed in: Technology
| Media
I was perusing my
favorite News Feeds this afternoon on the wonderful
iGoogle, when I came across a topic I hadn't heard
about for a while. How many of you know about about
NBCs little money tantrum? (Show of hands, please.)
Allow me to summarize ...
In late August of 2007, NBC declared it was going to break up with Apple (a.k.a., not renew their video contract with them for their TV Shows, etc.) because they couldn't manage to come to an agreement about pricing policies. The contract was due to end in December of 2007, if I remember correctly, but it may have been the first half of 2008. Instead of waiting out the rest of the contract and selling NBCs TV Shows until the contract ran out, Apple pulled the plug early, yanking all NBC shows from the iTunes store the same week NBC made their harsh statement. This was Apple's way of saying, "We don't need you anyway, NBC. We're going to define the next generation of audio/video, whether you side with us or not."
Apple is already paving the way for the next wave of audio/video communication, especially with the iTunes Music Store and the newly released Apple TV.
So, what was the problem exactly? NBC wanted to try out some "experimental pricing" strategies with Apple. Instead of charing $1.99 for each episode, NBC wanted their shows to cost $4.99. They also wanted users to pay more for "more popular programming." Apple's answer? Nope! Why make our customers pay more for something than they absolutely have to?
This brings us to today, when Zucker states that, "We know that Apple has destroyed the music business -- in terms of pricing -- and if we don’t take control, they’ll do the same thing on the video side." Right. Apple has destroyed the music business. He doesn't actually explain how Apple has done this, which seems pretty crucial to me. The way I see it is, unlike Napster, SpiralFrog, Connect, or Rhapsody, Apple offered a user-friendly alternative to these music stores, while taking down the hyper-aggressive DRM all of those other music stores force you to live with. Apple is currently in the process of transitioning into the same thing with video.
According to Zucker, “We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.” He makes it sound like he's trying to us (the consumer) a favor! The show to which he was referring was "Heros," the very popular NBC equivalent to Lost ;).
Zucker stated that it wasn't a tough decision to remove their content from the Apple Music Store because they only had made about $15 million from the deal. I'm sorry you escaped with such little profits, greedy NBC.
Another thing I found very interesting was that NBC claimed it should get a portion of the hardware sales Apple was making off of the iPod and iPhone. Um, hello? Your content is strictly software. If someone watches your show on a Sony TV and DVD player, does Sony then owe you a portion of their earnings? Just ... please, stop talking, Zucker!
If you ask me, Zucker is being ridiculous ... I don't think Apple ruined the music business OR the video business, I think Apple actually gave the consumer what they wanted; cheaper, more reasonably priced products!
Well, I have only one thing to say in conclusion. NBC, as a member of the demographic to which you are selling, I would rather purchase your content off of the iTunes Music Store for a lesser price than from any other location from which you jack the prices like nobody's business. So Apple didn't ruin the music (and video) business. I would say they correct music (and video) pricing schemes.
In late August of 2007, NBC declared it was going to break up with Apple (a.k.a., not renew their video contract with them for their TV Shows, etc.) because they couldn't manage to come to an agreement about pricing policies. The contract was due to end in December of 2007, if I remember correctly, but it may have been the first half of 2008. Instead of waiting out the rest of the contract and selling NBCs TV Shows until the contract ran out, Apple pulled the plug early, yanking all NBC shows from the iTunes store the same week NBC made their harsh statement. This was Apple's way of saying, "We don't need you anyway, NBC. We're going to define the next generation of audio/video, whether you side with us or not."
Apple is already paving the way for the next wave of audio/video communication, especially with the iTunes Music Store and the newly released Apple TV.
So, what was the problem exactly? NBC wanted to try out some "experimental pricing" strategies with Apple. Instead of charing $1.99 for each episode, NBC wanted their shows to cost $4.99. They also wanted users to pay more for "more popular programming." Apple's answer? Nope! Why make our customers pay more for something than they absolutely have to?
This brings us to today, when Zucker states that, "We know that Apple has destroyed the music business -- in terms of pricing -- and if we don’t take control, they’ll do the same thing on the video side." Right. Apple has destroyed the music business. He doesn't actually explain how Apple has done this, which seems pretty crucial to me. The way I see it is, unlike Napster, SpiralFrog, Connect, or Rhapsody, Apple offered a user-friendly alternative to these music stores, while taking down the hyper-aggressive DRM all of those other music stores force you to live with. Apple is currently in the process of transitioning into the same thing with video.
According to Zucker, “We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.” He makes it sound like he's trying to us (the consumer) a favor! The show to which he was referring was "Heros," the very popular NBC equivalent to Lost ;).
Zucker stated that it wasn't a tough decision to remove their content from the Apple Music Store because they only had made about $15 million from the deal. I'm sorry you escaped with such little profits, greedy NBC.
Another thing I found very interesting was that NBC claimed it should get a portion of the hardware sales Apple was making off of the iPod and iPhone. Um, hello? Your content is strictly software. If someone watches your show on a Sony TV and DVD player, does Sony then owe you a portion of their earnings? Just ... please, stop talking, Zucker!
If you ask me, Zucker is being ridiculous ... I don't think Apple ruined the music business OR the video business, I think Apple actually gave the consumer what they wanted; cheaper, more reasonably priced products!
Well, I have only one thing to say in conclusion. NBC, as a member of the demographic to which you are selling, I would rather purchase your content off of the iTunes Music Store for a lesser price than from any other location from which you jack the prices like nobody's business. So Apple didn't ruin the music (and video) business. I would say they correct music (and video) pricing schemes.