Apple to Stop Selling NBC Television Shows

[Project]

Seems everybody is jumping to defend Apple here against that greedy NBC .

Well, all NBC wanted is to gain more control over price than Apple. After all, it's NBC's content and Apple is just a broker. I am not saying this will be a smart decision for NBC but I think they should have a right to set the price to what they want. If there are enough suckers to pay for it, good for NBC. If not, then they either reduce the price or find some other way to repackage same content over and over again.

P.S.
As for me, I would not buy it even for $ 0.01 as long as it's DRMed in any way.

Apple is letting them set the price they want - so long as it is not over $1.99 an episode. lol

Personally, I feel NBC are acting a bit strange. Its easy money. They do not have to worry about CPMs, fulfilled inventory, an active sales force and whatnot as they do with the free/advertised model. If they can put out DVDs and High Def DVDs with extras, packaging, distribution etc, I dont see how they can go wrong with the download model at $1.99. Their margins using iTunes must be huge.

 

[~Shard~]

So 4.99$ with a average of 23 episode a season.. that come out to $114.77???
hmm for that price I rather wait for the season to be released on DVD. and at 1.99$ x 23 ep... 45.77$ this still hurts but better then 114.77$

Yeah, and don't forget about the difference in quality as well as the extras you get buy purchasing the DVD. For that ridiculous price differential I'd have no problems waiting for the DVD release.

 

[stompy]

I guess in some people's mind, there is no "the other side", apple say "they want double what you pay", you take it, apple say "they are greedy", you take it.

I guess before I can get some numbers, I won't repeat same old theory.

You can just sit tight and watch how much NBC will charge for their shows through other online market. and My guess is they won't charge you $4.99/episode!

I'm guessing they'll charge more than they receive from Apple per iTMS episode.

 

[morespce54]

apple tried to paint NBC as greedy so they say end users' price will be $4.99. of course, apple didn't bother to say that NBC might just want a bigger revenue sharing, rather than charging end-users more. i.e. NBC want more money from apple, not end users, while apple would just transfer this to end-users, now, who is greedy? can you really tell?

NBC wants to double the whole sale price... Apple should eat that cost all by themselves?

right. as sad as it is, these days nobody would expect a "retail channel" to eat the raise of the producer.

that would be nice if I could go in a supermarket and notice that the price of milk was raised but then, the manager would tell me that I shouldn't bother because he kept the milk at the old price and decided to make less money from it just to keep the customers satisfied...

Oh boy, those were the good ol' days...

granted that everybody is (kind of) greedy but when it starts at the top of the pyramid...

 

[bluedevil14]

ahhhhhh nooooo
that means no more scrubs!

 

[ricosuave]

The networks are desperate in this ad-free age of Tivo and iTunes downloads. They're going to have to figure out a new way to get advertisers, because charging $5 for a 22-minute episode isn't going to fly.

What they should do is go after product placement, and then give the episodes away for free and embrace file sharing. They'll make the same amount of money, if not more, because they can charge advertisers more, since more people will be seeing products in the shows if they get it for free.

Good idea. Seinfeld was a master at this. Remember entire shows were about products? Twix at the auto shop, chocolate dibs in the operating room, pez at the piano recital. Those guys new how to write a show. And I can only imagine the kind of coin that generated Jerry Seinfeld, Larry David and the network.

 

[CommodityFetish]

Interesting chess match...

The timing is surely not coincidental, as NBC is putting a damper on Apple's video iPod release next week...

In the long run it will be interesting to see how this power struggle goes between content distributors (apple) and producers (NBC/Universal).

NBC is betting that content will trump distribution channels, that people will go to their store (MS?) for their content. The only thing stopping them now is Apple's DRM lock-in on the iPod. They could beat this by providing DRM free episodes with ads embedded - so you can watch them on the iPod. That's the only way I see this making sense for NBC. (though they still have the piracy problem...)

As to "greed," corporations aren't people/citizens (despite US legal code giving them rights as if they were), so I don't think it makes much sense to call them greedy. It's business, and they're fighting (a losing battle) to stay as big and lucrative as they can. You can bet they have a plan B up their sleeve - as described above.

Whether the risk works for them or not remains to be seen...

 

[clevin]

I'm guessing they'll charge more than they receive from Apple per iTMS episode.

sure, they got 30c /episode from apple...

 

[Project]

apple always cuts into partner's profit in BIG numbers, I don't see why apple can't give more profit to their partners. remember why Verizon backed off from iPhone?

as for $4.99, I stand by my words, if all these fuss are really about "end-users", lets wait and see how much NBC charge.

Apple are quite happy to keep the price at $1.99, as evidenced by all of the other studios who are selling episodes on the iTS.

And again, you can not compare iTunes to what NBC charges elsewhere. The parent company clearly has an issue with iTunes being the dominant player. It doesn't want the situation the music companies have landed themselves in whereby a significant % of their profits come from iTunes sales and thus they have little power in dictating prices.

This is a power move, plain and simple. I do not think they expected it to get to the point where Apple would pull out though.

 

[nagromme]

We know Apple takes a cut of the shows they sell. I don't know what percentage, but lets assume it's a 50/50 split.

...

According to the press release, NBC wants double the wholesale price.

It's not a 50/50 split. Content owners make the biggest chunk of iTunes profit, while Apple and the credit card companies make a very small slice. Out of Apple's slice comes all the operating expenses: servers, rent, insurance, electricity, massive bandwidth, software development and maintenance, marketing/advertising, 24/7 technical staff, customer service, etc. etc.

Apple does make a LITTLE money on iTMS, but they've been clear that it's a small percentage. Not half.

And it's not "double" that NBC is asking. The MacRumors story is missing half of the actual quote: "more than double."

http://www.apple.com/pr/library/2007/08/31itunes.html

Well, all NBC wanted is to gain more control over price than Apple. After all, it's NBC's content and Apple is just a broker. I am not saying this will be a smart decision for NBC but I think they should have a right to set the price to what they want. If there are enough suckers to pay for it, good for NBC. If not, then they either reduce the price or find some other way to repackage same content over and over again.

I agree that NBC is in their rights to try to charge whatever they want. And we do NOT have the right to pirate the content (and bypass the advertisers) if we don't like it. We only have the right not to watch.

Now, I also think more-than-doubling the price is unreasonable, and so I'm glad to see Apple taking a hard line. Apple's concern for consumer experience is largely just profit motive, like any company, but it happens to put them on my side this time

This is a power move, plain and simple. I do not think they expected it to get to the point where Apple would pull out though.

Agreed. Very likely NBC just wanted a way to back out and try to beat Apple/iTunes with some new venture. But they wanted to do it in a way that made them look good and generated good publicity. Somehow they thought that more-than-doubling the price would make for good PR

 

[ZeeG]

What if Apple makes an announcement that they will release 720p (or even higher) videos for every studio except NBC at the coming media event?
At least for me, I will give up waiting for the end of HD format war between blu-ray and hd-dvd and will rush to the Apple store to get an AppleTV.
NBC will then be pissed off. Just my thought.

 

[skellener]

Why doesn't Apple offer DiVX and XVID compatability to iTunes and the iPhone/iPod. Then your could take your DVD's and rip them into iTunes like you can with CD's and manage them just like we do with music tracks.

You don't need DiVX or XVID for that. MP4 & H264 work right now.

 

[skellener]

At least for me, I will give up waiting for the end of HD format war between blu-ray and hd-dvd and will rush to the Apple store to get an AppleTV.

I think everybody has been waiting for this since January. Somebody is dragging their heels. Apple? Studios? No HD on iTunes = death for AppleTV.

 

[clevin]

And again, you can not compare iTunes to what NBC charges elsewhere.

I understand logically I can't, but

if all those people who accused NBC being "greedy", are really thinking "for end-users" as they claim.

then
I sure can compare, because thats what end-users get. from whichever market. don't you think so?

PS, I agree your analysis of power struggle tho, just feel that $4.99 is an absurd new ads from apple.

 

[danoindigo]

Call Nbc And Let Then Know!

If you love NBC shows as much as I do (such as "The Office"), CALL THEM AND LET THEM KNOW ABOUT IT. 818.777.1000 DO IT TODAY. DON'T GIVE UP. IF WE ALL LET THEM KNOW HOW WE FEEL, THEY MAY CHANGE THERE MINDS!

CALL TODAY! 818.777.1000

 

[Analog Kid]

As I said, my guess is that they go to a subscription model with heavy DRM. Maybe online streaming only.

B

And Windows only...

Someone mentioned the MSNBC link above, and I wouldn't be surprised if this is Redmond flexing some muscle. Unlike Universal's move, for which there is no real alternative, the XBox does give an alternative, existing, marketplace for NBC. They may not make more money from XBox sales then they get from iTMS, but they may be in a position where they have to choose between Apple and MS. Given how much NBC has invested with Microsoft already, I think we know where their allegiances are.

I have to think MS is a little worried about the early signs of the Mac's rising market share, and it's pretty clear that a lot of that rise is due to Apple's moves into media. They're probably arm twisting their friends.

 

[stompy]

sure, they got 30c /episode from apple...

Link? (Seriously, I haven't seen what content providers got/get.)

My point was simply that Universal wants more total/per episode revenue, and they think they'll accomplish this with or without Apple's help.

 

[maokh]

Its NBC's loss. I cancelled my satellite TV service months ago in favor of AppleTV/iTunes content. With NBC out of the picture, I guess i will be purchasing more content from their competitors.

Eyeballs do not make $4.99/epsiode. If they did, the networks would not be dying a slow death as they are now. $1.99/episode or $30-$50 a season is enough of of a premium as it is.

This type of attitude also drives consumers to piracy. 40% of iTunes purchases has to be a considerable chunk of change. If its not a complete bluff, it is a considerable risky move, as less and less are actually sitting in front of television sets at specific times to watch television programming. I bet NBC thinks that the revenue will magically shift over to another medium, but I do not see how alienating customers in such a fragile entertainment industry is going to be productive.

 

[supremedesigner]

Frankly, I think this is B.S. - It's pissin' me off when this thing happened. What a crock greedy companies (NBC, Universal, etc.) they are.

 

[sbarton]

Seems everybody is jumping to defend Apple here against that greedy NBC .

Well, all NBC wanted is to gain more control over price than Apple. After all, it's NBC's content and Apple is just a broker. I am not saying this will be a smart decision for NBC but I think they should have a right to set the price to what they want.

They do have the right to set their price just as Apple has a right not to buy it. Music and Video are (or should) be no different than tennis balls and toliet paper. All retailers (Apple in this case) have the right to say yea or ney based on thier business model and customer interests. Go ask Walmart what they think about this topic.

NBC and Universal seem to think they can set up a better value proposition (for themselves) by taking a different path. Good for them, however when I can get very good service and the same product for much cheaper at store A, I will unlikely be shopping at store B.

So either NBC/Universal can improve the quality of thier shows and product offering SO much that people will beat a path to thier door or they will have to lower the price of their product to be competitive to iTunes (like thats going to happen).

Time will tell. At the momemnt however Apple has the upper hand in any scenario I can think of.

 

[Analog Kid]

apple always cuts into partner's profit in BIG numbers, I don't see why apple can't give more profit to their partners.

If by "BIG" numbers you mean pennies... Apple can give more profit up to the point where they take a loss. As has been repeated over and over again in their financial results, there really isn't anything more to give.

 

[mashny]

DMCA

Basically, because DVDs have copy protection, it is illegal (in the USA) to circumvent that copy protection. CDs had no copy protection.

Regarding NBCs decision to pull from iTunes because of greed, and regarding DVD copy protection, three simple words: Mac The Ripper.

 

[Small White Car]

Why doesn't Apple offer DiVX and XVID compatability to iTunes and the iPhone/iPod. Then your could take your DVD's and rip them into iTunes like you can with CD's and manage them just like we do with music tracks.

Or you could, you know, rip them to a format the iPod supports.

Problem solved.

(And yes, Apple won't offer this, but there are tons of freeware programs that do it.)

 

[supremedesigner]

Well, I don't give a crap about NBC though - they still NEVER support subtitle / closed caption - nothing nothing nothing! No other companies will provide it. B.S.!

 

[k2k koos]

I like this move by Apple. By saying that 50 other cable companies have already agreed to the $1.99 per episode price, Apple is basically backing NBC into a corner and calling their bluff.

I don't see how NBC can think they are going to win on this one.

You can guess what 's going to happen, they'll either open up their own store, or going to work with others, and probably not charge $4,99 per episode / download. It is a ridicilous sum of money, and whoever in their company thought that would be a fair price, needs their brain examined, if there is one left in there. Bad for the consumers, loosing NBC on iTunes, but good on Apple to keep their prices down

Now, only one comment,as I am not a "cost what cost Apple supporter", I'd like to know from them what is with the ripp off prices charged on the UK store???????? They are substantially higher than US prices, and don't tell me is sales tax, that is bulls****