NBC Disputes Apple's Pricing Claims

[MikeTheC]

I'm trying to think of where to begin with this...

First off, while it may not be illegal, double-dipping (i.e.: having a show paid for by advertising revenue and then paid for again by viewers) is something that, at the very least, many people find offensive. And, honestly, I am amongst that group. If you want to sell me content (and assuming I am willing to pay for it and then agree to pay for it), then no harm, no foul.

Now, you can say that a given show wasn't fully underwritten by advertisers, and it may be true (however the fact of the matter is that ultimately the jury is still out on that one based on the complete and total inability of external third parties such as ourselves to have access to independently-verifiable numbers) but we'll never know for sure, and I for one highly doubt (other than for, say the pilot of a show, and even then I have my doubts) any show you see on TV isn't at a minimum breaking even in advertising.

Absent any evidence to the contrary, I'm going on the safer bet that TV networks such as NBC, CBS and ABC (and obviously others) wouldn't dane to run their business in anticipation of profit for even a second. I'll accept in principle that I may be wrong on this point, but I doubt it.

The Entertainment Injustistry has a frightfully huge lobbying presence on The Hill and elsewhere. They've also got a frightening amount of power and leverage (thank you United States government and the other zombie governments of the world too stupid to see past their own greed and do the right thing(s) ), and then on top of it all, they also have the ability to exert a hideous amount of mental sway/influence on the general public, since it's they themselves which serve as the conduits through which much of the so-called "discourse" on such matters flows, one-to-many, out to the general public.

I care little for the supposed wrongs done to the E.I. by us, the members of the general public, considering what they have been doing to us all these years. And I'll give you an example of this paragraph and the one before it right now...

If you look at many of the TV shows which have come on the air either right before or at any point after the wide-spread adoption and accessibility of broadband Internet connectivity in any given country (but let's just limit this to the U.K., the U.S. and Australia for the moment) what you find is that the shows which have attained the highest ratings, largest amount of views, and have earned the greatest public respect are the ones which are also "pirated" the most via the Internet. Doctor Who and Battlestar Galactica are probably the two most outstanding examples of this phenomena that I can easily site, though probably Robot Chicken and Desperate Housewives and a few others are out there, too. They have had enormous ratings, their high download rates notwithstanding. And in the case of Dr. Who, when you'd expect unauthorized Internet viewing to have had a negative impact on views, the actual results are, in fact, quite the opposite.

Same thing with Battlestar Galactica. It's a critically-acclaimed, Peabody-award-winning TV show with some of the highest ratings (if not the highest) on SciFi, and certainly a top contender overall. The first season was paradoxically shown exclusively in England before it was shown in America, even though it is considered to be an American TV show. And you know what? The ratings were amazing when it did finally show in the U.S.

I'm sorry, but I simply do not buy into the argument that unauthorized viewing is having a spoiling factor as it's only effect. What you find is that shows which suck are found out a lot sooner, and don't get watched as much (because people tell other people who tell other people "Hey, this show sucks.") and conversely shows that are great shows get even better viewership than they otherwise might because of this same infrastructure.

Now, while it's true that Apple is not giving access to content on a pro bono basis, nor are they in it without the intent to make a business out of the process, at least Apple isn't trying to screw their customer base, but rather they've figured out that, "Hey, you know, if we just do the right thing and make the customer happy, they'll of their own free will prefer to do business with us over the other guy." I wish more businesses (Home Depot, Microsoft or Sony, anyone?) could figure this basic tenet out.

 

[Snowy_River]

I don't think content providers can violate fair use. Users have the right to use content fairly, but the providers don't need to make that easy. That why DAT and DVD were locked down, like other technologies before and since.

That's what I meant by "not entirely" legal-- there's a conflict in law that, for the time being, is being enforced in favor of content providers. Eventually someone will need to have the balls to risk taking it to the Supreme Court, but for now Mac The Ripper is being kept off reputable sites. Content providers also seem loathe to have the status quo tested-- they seem to back down when users look willing to fight.

If things keep following their current track, the precedent may well be RIAA v Apple.
...

I guess I would argue that content providers can violate fair use, but there's just no penalty for it. My point was the for NBC to ask Apple to look for a broadcast watermark and not allow iTunes or the iPod to play any videos that have it would violate the principle of fair use, and Apple has shown themselves to be fairly strongly against that. At every turn, they want their platform to be as open as possible, and to limit DRM as much as possible. That was all I was trying to say. I realize that I didn't say it very well.

It will be interesting to see what comes of the legal question. With the periodic recurrence of legislation that would effectively strike down the DMCA, and some statements that have come out of the Supreme Court, I don't see this as being an issue that will stand up to a strong legal challenge. That's probably why content providers are inclined to back down. As soon as they try to fight, it will go to the courts and precedent will be set, and, based on the direction the wind is blowing lately, it could well be set against them.

I'm trying to think of where to begin with this...

First off, while it may not be illegal, double-dipping (i.e.: having a show paid for by advertising revenue and then paid for again by viewers) is something that, at the very least, many people find offensive. And, honestly, I am amongst that group. If you want to sell me content (and assuming I am willing to pay for it and then agree to pay for it), then no harm, no foul.
...

Okay, we need to clarify this point. NBC (or any other network) wanting to be paid for you downloading a TV show is NOT double dipping. For every person who watches a downloaded program instead of watching the same program on broadcast lowers the overall broadcast rating of the show. This rating effects how much NBC can charge for advertising during that show. So, take the extreme case, if everyone watched, say, Heroes by downloading, then the broadcast rating of Heroes would be zero. NBC, therefore, wouldn't be able to give the advertising time away. By your measure, all of those downloads ought to be free. In that case Heroes would vanish because it would have no revenue associated with it.

Now, as I've already posted (though please don't ask me to post a link, as this is from an article that I read something like six months ago), it is true, at least according to an analyst, that if everyone watched Heroes by downloading it from iTunes at $1.99 per episode, NBC would make more money than they make from the advertising during the entire season of Heroes were those same people watching on broadcast. However, that's an argument about how much they should charge, not whether they should charge. Personally, I have no problem with $1.99 per episode. It seems a relatively fair price, and I don't have a problem with the fact that they make a little more money that way. I would have a problem with any significant price raise, or some kind of expiring media, etc. (I might be able to stomach $2.49, but not much more than that. And the rental model doesn't appeal to me, unless it was something like $0.49 to rent an episode for a few days. That's what the local store would charge me - $1.99 for a TV DVD rental that has 4 episodes on it, and I get it for 4 days.)

 

[hulugu]

Apple is notoriously difficult to work with for content companies, whether Music or in video area. They set a way to do business, but do not allow for any compromise or input from outside companies.

My bet is that NBC wanted actually reasonable terms, but Apple is so damned stubborn that they stonewalled them.

I genuinely believe apple is in the wrong here. It is part of how they do business and they do treat many outside companies as partners.

Sorry, i love macs, apple tv and my iphone, but... to do business work with them, they are acting more poorly than Microsoft.

I'm not going to pretend that Apple is acting out altruism here, but I think our interests as consumers dovetails rather nicely with Apple's. Apple is, as has been widely repeated here and elsewhere, interested in selling iPods (or iPhones/TV, etc.) and therefore uses content as a way to drive sales. Since Apple has so little apparent interest in charging for music and video they are more likely to keep prices lower and be especially wary of complex pricing schemes or packages which could backfire and ruin the sale of iPods.
Meanwhile, NBC and Universal are selling content and are now increasingly afraid of Apple's control as a middle-man, but more importantly, they are hoping to make more money per download because they see a revenue-stream growing and they're not making the same percentages they're used to.
NBC and Universal want to charge you more for less. They want to raise prices on popular shows and albums, and they'll lower the pricing on a few back-catalogue items just to pretend they're even-handed. In reality, however, Heroes and Kanye West's new album, will rise in price.
As for casting Apple as the bad guy, Apple is acting in their own best interests while using the studio's requirement for DRM against them. Remember without Apple digital downloads wasn't going to happen and, we'd have gotten at best, some variation of Rhapsody—except for OSX users who without Apple would have gotten jack squat.

If NBC and Universal really care about the consumer, they'll add additional content or features to the current downloads, similar to EMI with iTunes Plus. The consumer spends a little more for something extra, but EMI makes a little more all by adding value to the current product. That's what real competition in a real market would do, but since we're dealing with a dying cartel, expect NBC to fight hard for the right to raise prices and strangle distribution methods. If Apple is being unreasonable by refusing to do this, I'm buying more shares in Apple.

You didn't quote the part of my comments that address your distinction here, Clevin. My whole comment on this was that NBC can't really lower their price by controlling the network. I didn't say you were accusing Apple of overcharging, I said NBC will incur the same expenses as Apple does-- so your comments that NBC can lower their prices by cutting out the middle man are only true to the extent that they can deduct Apple's profits from the equation and that won't really make a material difference because Apple's profits on this are next to nothing.

If you want to take a practical business look at this you should have pointed out that NBC will have to charge more to make the same profit per download as they get through Apple because they don't have the efficiency of an already existing infrastructure as Apple does, they won't have the composite volumes that Apple does, and they're going to have to spend a small fortune on advertising to raise awareness of their service whereas everyone with an iPod can find the iTMS.

NBCs move is about control, not a calculation on additional profit per download.

Bingo. NBC, Universal, and Capitol are all freaked out by Apple's new ownership of the distribution. And, they haven't figured out that it's their own fault for failing to see the sea-change back when Napster was still around. NBC has more than enough warning and still ignored digital downloads of video until Apple brought it to market, and now they have a choice: build a better model or shut up!

Oh and Hulu ain't it.

 

[chillywilly]

Bingo. NBC, Universal, and Capitol are all freaked out by Apple's new ownership of the distribution. And, they haven't figured out that it's their own fault for failing to see the sea-change back when Napster was still around. NBC has more than enough warning and still ignored digital downloads of video until Apple brought it to market, and now they have a choice: build a better model or shut up!

Oh and Hulu ain't it.

Very much agreed here. NBC has got a taste of digital success and, like other companies that preceded them, thinks they can keep more of their profits by doing it themselves (or at least the partnership they have in hulu.com). They will find out the hard way.

 

[Black Belt]

Well, I do think the $1.99 is more of a "7-11 screw you because you're in a convenience store" type of pricing. A full season boxed set of Heroes for example, with extras in a much higher quality, ALREADY ARCHIVED ON MEDIA (which is totally crackable) sells for $40 street. 23 episodes at 1.99 is $46 WITHOUT MEDIA, WITHOUT EXTRAS, LOWER QUALITY and delivered over my bandwidth which I PAY FOR on MY TIME. Considering the lack of pressed media, I would think 99 cents would be a more fair price point for TV shows.

And yeah NBC is disputing Apple's claim but have they rescinded their slanderous comments about iPod owners? So regardless if NBC has any rational reasoning behind their requests they lose my support when they call me a crook. Steve has never called me a crook, in fact, he welcomes my Vista-usin' arse into the Apple store. Steve gets my vote.

 

[sunspot42]

Content

We'll see what happens when cable-cards are in full-effect. We'll see how long Apple can keep holding out from implementing technology it knows it has every legal right to do, and ignores in an effort to satisfy its partners. Content reselling IS the ideal model, when partners are cooperative with the format. If partners begin to defect, Apple will need to strongly consider its other options for getting content playing on its devices.

Yup. If entertainment industry bigwigs decide to pull their content from iTunes, Apple could easily retaliate by either buying Tivo or by developing their own DVR, probably something based on their existing AppleTV, and integrating that with iTunes and the iPod. Something like that would kill sales for an outfit like Hulu. Whoops.

Apple could also retaliate by starting to produce its OWN content for iTunes. With billions in cash on hand, they could easily fire up their own production company and begin producing their own television series, like an internet-based HBO or Showtime.

 

[nkawtg72]

Well, I do think the $1.99 is more of a "7-11 screw you because you're in a convenience store" type of pricing. A full season boxed set of Heroes for example, with extras in a much higher quality, ALREADY ARCHIVED ON MEDIA (which is totally crackable) sells for $40 street. 23 episodes at 1.99 is $46 WITHOUT MEDIA, WITHOUT EXTRAS, LOWER QUALITY and delivered over my bandwidth which I PAY FOR on MY TIME. Considering the lack of pressed media, I would think 99 cents would be a more fair price point for TV shows.

And yeah NBC is disputing Apple's claim but have they rescinded their slanderous comments about iPod owners? So regardless if NBC has any rational reasoning behind their requests they lose my support when they call me a crook. Steve has never called me a crook, in fact, he welcomes my Vista-usin' arse into the Apple store. Steve gets my vote.

finally someone who seems to see what i see. this has nothing to do with apple and the way they may want to do things. this has everything to do with NBC (and potentially others) trying to garner sympathy with a "people are stealing from us, we want to be more consumer friendly, blah blah blah" press release attacking apple....when in fact all they're trying to do is increase an already large profit margin on one of their cheapest forms of distribution to date, and obviously a very successful one.

are they wrong for wanting to make more money, NOPE. but do i think they're a bunch of money hording weasels, YES. why? because they won't fess up, and would rather blame apple and an EXTREMELY small number of pirates out there, and act as though i just fell off the turnip truck.

like i've said before. let'em do what they will with their programs, it's a free country and a free market. but don't ask me to have any sympathy for them when they want to lie through their teeth about the real reasons for doing it.

no one forced them into signing a deal with apple in the first place for ITMS sales. they saw it as an opportunity just like the rest of them and took it. now they see just how green the grass is on the other side of the fence and want a larger piece of the action.

which brings up another interesting point. look at it this way. they actually aren't going after apple, they're going after the consumer. if apple was the bad guy here and taking more than it's fair share then NBC would be trying to renegotiate the contract so apple gets a smaller cut. even NBC knows this isn't possible because apple isn't taking any more than it really needs to operate the store, like many others have already pointed out. so NBC is doing the next best thing and thats sticking it to the consumer by raising the prices in order to increase their profit margin.

again, it's their right to do so but i don't have to like it, and neither does apple, which in my opinion is why apple is saying no to it. am i going to boycott NBC or write letters telling them to stop it, NO. i'll just not pander to their wishes and won't pay the higher prices for their stuff if that is in fact what happens. if by some chance, lots of people do that, then NBC will learn their mistake. if not, then fine too. people will get what they want, NBC will have what they want, and i'll have what i want. the system will have worked.

not that this has anything to do with this but i was wondering...what would the people (i'm not one of the) who had issue with the oil companies raising prices when they already had a large profit margin have to think about NBC trying to do the same.

 

[paja]

NBC selling on Amazon UNBOX on the 9/10

http://www.engadget.com/2007/09/04/nbcs-selling-shows-on-amazon-unbox-starting-today/

Price will be $1.99 per episode.

No Mac Format. Windows only.

_______________________________________________
MBP 2.0GHz / iPhone / TV / eyeTV 250+

 

[LethalWolfe]

don't be so easily offended. no where in my post did i state your specific username. this is a forum, where you should expect to read opinions. i made a GENERAL (refer to Webster's) statement on "not hating Apple, blah blah blah", that was not necessarily directed at you but someone who may in fact have it out for Apple.

If you are just making a general state there is no need to use the "quote" function which signals to others that you are responding to a specific post.

as for taking a deep breathe, maybe you have time to read all 160 posts, but i do not. i'm not expecting you to agree with me, again this is a forum. i merely saw some posts that i felt i wanted to provide a counter arguement to.

Oh. So you were responding to my post specifically. Maybe you should try and do a better job differentiating between responding to a specific post and making general statements.

honestly, i think not being so easily offended in an OPEN FORUM is the better route.

I'm not offend. It's just your poor communication skills made your reading comprehension ability seem a bit lacking and I thought if you slowed it down a bit you'd do better.


Lethal

 

[milo]

Peacock Takes Swan Dive

Peacock Takes Swan Dive

Last week, the average ratings for NBC programs sank to their lowest level since Nielsen's current method for determining audience size was instituted some 20 years ago. The network averaged just 4.17 million viewers per hour in primetime. Ratings among adults 18-49 also fell to a record low for the network. (Fox also recorded record lows in that demographic group last week, while ABC tied its previous record low.) CBS led its rivals with an average 4.5 rating and an 8 share for the week. ABC placed second with a 2.9/5, while Fox and NBC tied with a 2.8/5.

http://www.imdb.com/news/sb/2007-09-06/

Yeah, NBC is going to do JUST fine...

 

[Potus]

Peacock Takes Swan Dive

Last week, the average ratings for NBC programs sank to their lowest level since Nielsen's current method for determining audience size was instituted some 20 years ago. The network averaged just 4.17 million viewers per hour in primetime. Ratings among adults 18-49 also fell to a record low for the network. (Fox also recorded record lows in that demographic group last week, while ABC tied its previous record low.) CBS led its rivals with an average 4.5 rating and an 8 share for the week. ABC placed second with a 2.9/5, while Fox and NBC tied with a 2.8/5.

http://www.imdb.com/news/sb/2007-09-06/

Yeah, NBC is going to do JUST fine...

I'm experiencing Schadenfreude.