NBC Disputes Apple's Pricing Claims

[MacRumors]

In a very public disagreement, NBC disputed Apple's claims that NBC demanded that a doubling of the wholesale price for their television shows. According to Cory Shields, executive vice president of communications for NBC Universal:

"We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers"

The statement continued to claim that NBC had asked Apple to "take concrete steps" to prevent piracy.

NBC will be colaunching a new online video portal this October called Hulu.com;

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[jericho53]

Hulu.com will fail.

[flopticalcube]

Their argument would carry more merit if they were not also launching a competing service.

[likeavaliant]

they want apple to take concrete steps to prevent piracy?

they just opened up the floodgates of nbc pirates.
i for one have uh, never, downloaded anything illegally, now i'm sure i just Might download some NBC shows out of spite.

that'll work better than paying for it anyways.

[nostaws]

I think pirating videos from itunes is not easy.

Also, I am really not surprised. NBC has been trying to do their online stuff for a while now. you could watch heroes from their web site after it had aired.

I don't think anyone can compete with itunes right now. This doesn't bode well for NBC.

Itunes only competition is the torrent.

[zap2]

iTunes Video's DRM is great, I've never heard it being hacked.


Screw you NBC!

[queshy]

lol im sure that HULU will take down iTunes.

[jonharris200]

The heat goes on.

[bigbossbmb]

I'm not sure what exactly NBC can expect in terms of "concrete" steps...

I would not be surprised if this is connected with Universal Music's trouble with the itunes store.

[aleksivic]

"We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers"

LOL - I'm pretty sure Apple would let NBC Universal do $1.99 or less which would be attractive to consumers.... although, technically he is not lying... NBC Universal did not ask to double their wholesale price... $4.99 is not double of $1.99 =)

[BKKbill]

Two major corporations bickering in public. At least here on macrumors we keep it in the family.

[Jimmdean]

"We didn't want to screw you over like that - we wanted to screw you over this other way..."

[EricNau]

Will Hulu require a paid subscription, or will it offer free on-demand episodes much like ABC offers on their website?

...I've long thought it silly that ABC offers free, full-length episodes online, while also trying to sell the same content through iTunes. ...The choice seems obvious to me.


And quite honestly, I'm a little happy at this news. I never liked the direction the iTunes Store was heading with their TV and movie sales.

[stcroixsailor]

'a very public disagreement?'

what happened, a shouting match between Steve and NBC on CNN?

[Mistershark]

Originally Posted by stcroixsailor

'a very public disagreement?'

what happened, a shouting match between Steve and NBC on CNN?

Primetime meets WWE.

I know I speak for us all when I say this has to stop. Compromise is once again portrayed as a noose.

[DaBrain]

Another recent news announcement as of 7:23pm today:

NBC refutes Apple's price claims, pledges iTunes shows

By Aidan Malley
Published: 07:20 PM EST
NBC Universal has rejected claims by Apple that it wanted to more than double the price of TV shows on iTunes -- and has also contradicted threats that new NBC shows would disappear from the iPod maker's online store.


In a statement to the press, NBC flatly dismissed Apple's contention that the TV studio's ultimate goal had been to charge $4.99 per show, more than twice as much as today's $1.99 rate. The actual goal has been to institute "flexibility in wholesale pricing" and bundle shows together in more "attractive" ways, said NBC's executive vice president of communications, Cory Shields.

The studio also insisted that all of its existing shows would see new episodes available for sale through iTunes in spite of Apple's declaration mid-Friday that it wouldn't carry updated NBC programming for the fall season. The company did not say how it intended to force Apple to agree to the terms, but appeared to use its existing contract as leverage.

"We want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December," said Shields. "Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com."

The statement reiterates NBC's cautious approach to renewing its contract with Apple, leaving a window open for the the two firms to resolve their dispute before the end of the contract. But in a counter to Apple's own allegations, NBC argued that its would-be partner was the unreasonable firm in the dispute, attempting to keep prices at its media store fixed in a way that favors sales of iPods and iPhones above the shows themselves.

"It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices," Shields asserted," at the expense of those who create the content that make these devices worth buying."

The confirmation of variable pricing as a sticking point for NBC reveals the seriousness of the issue for its parent company Vivendi. July saw NBC's sister company Universal Music Group drop its long-term contract for iTunes music, choosing instead to offer music "at will" so long as Apple maintained its flat 99-cent song pricing. Warner Music and other larger labels have also made similar arguments, but aren't known to have abandoned their own contracts.

[ajpprc]

Better anti-piracy controls aren't about the video apple sells, it's about locking down the ipod and iphone so it doesn't play anything but DRM protected content.

[rdrr]

hmmm packaging? Like we want you to buy crappy shows with this one? That sounds to me like a record company forcing you to buy an album with one hit song and filler.

[stoutboy1]

I don't get it. NBC wants to make their shows / packages more attractive for itunes customers yet they are launching there own online store... Makes more sense to me to leave it as is on itunes and if they launch there own store they can price how theyd like. Let the consumer decide if NBC's got the better Idea. Doubt it.

[dashiel]

********. plain and simple. piracy of over the air broadcast is as easy as ripping a CD to aac/mp3. it's far more difficult and time consuming for someone to buy an itunes video, strip it of DRM and encode it in a more universal codec (though to be fair h.264 is quickly gaining ground). torrent sites usually have content up considerably faster and of considerably better quality than itunes.

[TheAnswer]

"including the ability to package shows together in ways that could make our content even more attractive for consumers"

In other words...charging double per episode for a show I want to watch, but throwing in an episode of a crap show in with it with hopes that I'll start to watch it.

[jbernie]

IF and it is a big IF, NBS was wanting to package multiple shows together so maybe you could buy an episode of the office and get an episode of another show that maybe wasn't getting the exposure for free or for a discount say 50c instead of $2 and Apple was refusing then i would go with Apple is hurting the consumer.

If it is just NBC wanting to make the good shows more expensive and the average shows the normal price, then i would still think they have a right to charge for the content at what ever price the consumer is willing to pay, but with that in mind, it doesn't mean they would be successful.

If they are selling a million episodes at $1.99 and only lose say 250,000 sales when the price goes up to say $4.99 then they aren't going to lose.

[Westside guy]

We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers"

I always love the way they word these sorts of statements - I don't imagine they ever DID explicitly ask to "double the price". They might've asked to raise it from $1.99 to $3.99, but nowhere in that statement is the word "double".

Anyone want to lay odds that hulu.com will be Windows+Internet Explorer only?

[jettredmont]

Originally Posted by EricNau

Will Hulu require a paid subscription, or will it offer free on-demand episodes much like ABC offers on their website?

...I've long thought it silly that ABC offers free, full-length episodes online, while also trying to sell the same content through iTunes. ...The choice seems obvious to me.

Well, "free" but with forced advertisements (don't they require interaction with the ads?) versus $2 to just watch the damned show seems like an obvious choice to me as well. I tried the ABC online route once, and was thoroughly unimpressed. Of course, my Tivo works well enough to keep me from hitting up iTMS but once in a blue moon anyway, but still: when I have to pull the show as a download, I go to iTMS to avoid the Clockwork Orange marketing tactics.

And quite honestly, I'm a little happy at this news. I never liked the direction the iTunes Store was heading with their TV and movie sales.

$2 is too much as it is, for a television show with no extras. If it was, say, $1, I'd download well more than twice as much as I do now.

[thomasfxlt]

Originally Posted by DaBrain

Another recent news announcement as of 7:23pm today:

NBC refutes Apple's price claims, pledges iTunes shows

By Aidan Malley
Published: 07:20 PM EST
NBC Universal has rejected claims by Apple that it wanted to more than double the price of TV shows on iTunes -- and has also contradicted threats that new NBC shows would disappear from the iPod maker's online store.


In a statement to the press, NBC flatly dismissed Apple's contention that the TV studio's ultimate goal had been to charge $4.99 per show, more than twice as much as today's $1.99 rate. The actual goal has been to institute "flexibility in wholesale pricing" and bundle shows together in more "attractive" ways, said NBC's executive vice president of communications, Cory Shields.

The studio also insisted that all of its existing shows would see new episodes available for sale through iTunes in spite of Apple's declaration mid-Friday that it wouldn't carry updated NBC programming for the fall season. The company did not say how it intended to force Apple to agree to the terms, but appeared to use its existing contract as leverage.

"We want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December," said Shields. "Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com."

The statement reiterates NBC's cautious approach to renewing its contract with Apple, leaving a window open for the the two firms to resolve their dispute before the end of the contract. But in a counter to Apple's own allegations, NBC argued that its would-be partner was the unreasonable firm in the dispute, attempting to keep prices at its media store fixed in a way that favors sales of iPods and iPhones above the shows themselves.

"It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices," Shields asserted," at the expense of those who create the content that make these devices worth buying."

The confirmation of variable pricing as a sticking point for NBC reveals the seriousness of the issue for its parent company Vivendi. July saw NBC's sister company Universal Music Group drop its long-term contract for iTunes music, choosing instead to offer music "at will" so long as Apple maintained its flat 99-cent song pricing. Warner Music and other larger labels have also made similar arguments, but aren't known to have abandoned their own contracts.

Steve's not used to getting "Jobbed".

My guess is that if he says "no NBC shows" he means it. NBC will need some kind of injunction to get Apple to keep the content online. Apple will have a legal basis to remove them (in their opinion) and just say "screw you". If this thing get this far, a judge will make the decision. I imagine this will settle somehow before it gets to much more out of hand.