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Because then everybody will request the price increase and all of a sudden the iTunes store looks less attractive.

If this is a margins issue for Apple, then we have the following.

Apple currently takes .55, which is 27% of the revenue.

27% of the $4.99 = $1.34
Which means that at that %, NBC would want $3.60 per episode.
If it is currently making $1.45 per episode, then Apples claim that they wanted more than double the current wholesale price holds true. According to these figures, its around 2.5x the current price.

So if NBC did want more than double, then these figures are entirely realistic , based on Apple maintaining existing margins.

Exactly my point! Apple doesn't seem to want to change from their current pricing scheme. So I guess I have no clue as to what you're saying.
 
Yes, but if they can sell 5x as many shows at $0.60 they will make more money than if they just sold one $1.69 or even $1.99.

B
You are right.

Same thing, still fractions of a hundred... ;)

If they sell for $1.69, they're losing money compared to iTMS. That 55 cents covers bandwidth and credit card fees too, you know...

we are discussing something that has little data if any.

you do noticed this 1.44 and 0.55 are simplified numbers, if apple earn 55c/episode, and NBC earn $1.44, where did the bandwidth costs go? Im sure its not that a simple calculation, altho I have no data to make further analysis.
 
Let's Vote on this

I have been reading the whole thread but forgot to count who is in favor of apple or nbc.
Can someone setup a vote in this forum?

I personally think apple should let the content providers set the wholesale prices, then apple can still set their own margin. That way we will have sooner or later the optimum price that leads to the largest profits for everyone involved

That way, the studios will probably also flood the itunes store with old content at bargain prices just like some older DVDs in the retail store.
 
Exactly my point! Apple doesn't seem to want to change from their current pricing scheme. So I guess I have no clue as to what you're saying.


Yep, but the question is - Why should they change their current pricing scheme? Even if they kept 0.55 per sale on the new price, that would leave the retail price at around $4. Which would result in a catastrophic drop in sales (basic price elasticity theory). Which would then result in a huge drop in the already little money they make from TV show sales. Yet their fixed costs remain the same.

People really need to think this stuff through before jumping to conclusions.
 
If apple earn 55c/episode, and NBC earn $1.44, where did the bandwidth costs go?

That's because you're confusing revenue and profit.

Apple gets $1.99 from the consumer and pays $1.44 to the (top) content providers.

Of the $0.55 they don't pass on come the operational costs (bandwidth, credit card fees, salaries for the employees that cover customer support, hardware, ...), marketing, and finally .... "profit", which for Apple is probably close to 1/4 of the $0.55 or a measly $0.14 per episode of a show.

B
 
Isn't heroes on NBC?:(

Anyway.. maybe it's good news seen as I won't feel bad getting them for free now:cool:

haha.

what idiots
 
You are right.



we are discussing something that has little data if any.

you do noticed this 1.44 and 0.55 are simplified numbers, if apple earn 55c/episode, and NBC earn $1.44, where did the bandwidth costs go? Im sure its not that a simple calculation, altho I have no data to make further analysis.


Look, Professor Economics, what does this have to do with anything. Are you now arguing that the shows don't cost a $1.99? This would make some sense if iTunes was a joint venture between Apple and NBC, but it's not. NBC doesn't have anything to do with how much Apple pays for the bandwidth to run iTunes.
 
Kudos to Apple

Kudos to Apple.

While I had no problem paying $1.99 per episode, $4.99 is ridiculous. I'm happy using bittorrent from now on.

And don't tell me that NBC offers them for free on their website, too. I want to watch the episodes full size on my TV.
 
Technically, both NBC and Universal are owned by General Electric. However, I think this may have a lot to do with Microsoft. Apparently, Universal gets some money from every Zune sale, which means that they might have had some deal worked out ahead of time. Maybe Microsoft was able to get Universal and NBC's parent company, GE, to give them a good price, while promising to hike up their price to Apple. Either way, I'm saddened by this whole thing.

This is way off, and it's something many people have gotten wrong in this thread.

Once and for all, this is the NBC-Universal breakdown:

NBC was bought be the GE Corporation some time back (in the 80s, I think). They were the sole owners until 2004 when Universal took a 20% stake in the company.

Universal itself is owned by French conglomerate Vivendi.

So NBC-Universal is owned 80% by the GE Corporation and 20% by Vivendi SA.

NBC and Universal are NOT the same company, never have been, and don't plan to be anytime soon...
 
Yep, but the question is - Why should they change their current pricing scheme? Even if they kept 0.55 per sale on the new price, that would leave the retail price at around $4. Which would result in a catastrophic drop in sales (basic price elasticity theory). Which would then result in a huge drop in the already little money they make from TV show sales. Yet their fixed costs remain the same.

People really need to think this stuff through before jumping to conclusions.


I have never once argued that they should change their pricing scheme, I was merely pointing out the flaws in clevins argument.

People really need to read this suff through before jumping to conclusions.
 
this thread should be re-titled to:

NBC Stops Selling TV Shows on iTunes

This is clearly not Apple's doing.

well, that's what the third thread on the front page is. this thread is apple's reaction to nbc's decision. rather than selling tv shows into december (the end of the contract), apple's pulling the plug on nbc shows before the start of the new season. this thread is properly titled.
 
I have never once argued that they should change their pricing scheme, I was merely pointing out the flaws in clevins argument.

People really need to read this suff through before jumping to conclusions.

lol, I was arguing his points too. I said 'Yep' in response to your post because I agreed with it. I should have been clearer that the rest of my post was not in response to your views, but clevins.
 
lol, I was arguing his points too. I said 'Yep' in response to your post because I agreed with it. I should have been clearer that the rest of my post was not in response to your views, but clevins.

OH, Sorry :eek: Didn't mean to get so defensive.
 
It was mentioned earlier in the thread, but perhaps this makes more sense if you assume that HD content is involved, and the 55c number is correct. Maybe NBC thought - "oh HD is 1280x720, SD is 640x480 - that's triple the pixels in HD! But we can cut you a super deal Apple, and only charge you 2.5x more? How's that sound?".

Either way, it's still stupid and greedy.
 
bye bye nbc

Just purchased the Elgato EyeTV 250 Plus.

I now get your shows anytime I want on my :apple:TV or iPhone. Free, no more $1.99 for you twits!
 
This is just total bull crap! My favorite TV show ever is The Office, and I never have time to watch the show on TV. But $4.99 per episode? That's crazy talk, and there's no way I'll pay that.

Screw you, NBC, you just lost a customer.

Weren't they one of the original networks to sign on for the iTunes store?
 
It was mentioned earlier in the thread, but perhaps this makes more sense if you assume that HD content is involved, and the 55c number is correct. Maybe NBC thought - "oh HD is 1280x720, SD is 640x480 - that's triple the pixels in HD! But we can cut you a super deal Apple, and only charge you 2.5x more? How's that sound?".

Yeah, I'm *sure* the NBC accountants stepped aside from editing their latest Final Cut Pro project and archiving their CGI templates onto imported Japanese DVD-Rs just long enough to suggest NBC ask for a little more from Apple for HD content...

(Translate: I find it very unlikely that anyone calling these types of shots at NBC would know the first thing about resolution, codecs, transfer rate or other technical stuff...)
 
Wtf?

You know what? iTunes sell Friday Night Lights for $40. While Best Buy sells it for $25 and on sale for this week at $20. How much is NBC want? ****! How much is their cut on $25 vs. $40. Sound like greed to me. NBC does not have to pay for hosting, bandwidth, credit card transactions. All I have to say is F* em!
 
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