NBC Disputes Apple's Pricing Claims

[clevin]

No, I didn't deliberately ignore that word, it's just logic dictates that it need not be mentioned. Just think it through, there's no way that the portable video player market isn't a huge majority of iPods.

well, I have no argument against pure guess. Just repeat my another point, I GUESS many, if not most, people just want to buy shows for their computer, not potable video players.
[/QUOTE]

Someone else made this great analogy recently. iTunes is like a supermarket, in one store you find foods made by all the different manufactures by GM, Kraft, Mars. If people could only buy kraft foods at a separate kraft store that only sold kraft-manufactured products, no one would go there. They'd shop wherever offered one easy convenient place that offers them a good variety of foods that they want.

lets see. I actually agree ITMS is like walmart, so called one-stop hceap shopping, but here is the fact
HULU is combination of NBCU and NewsCorp, which means NBC, Si-Fi, Fox, etc. Its not exactly a problem that requires users to "check everywhere", rather, it will be like another one-stop-shopping for many people too. after all, NBCU's shows occupy 40% of ITMS' selling, now plus fox.

also, without middle man, A.K.A. Apple, NBCU can lower their price also. Isn't price a shining attraction of walmart other than "all-in-one"?

above are all guessing, we can debating all the reason that favoring each side. eventually, only market can tell.

I don't see them doing it in a way that is constructive for the consumer.

NBC hasn't done nothing yet! do you actually know all their plans? other than what apple told you that NBC "would" do?

 

[leumluath]

NBC:

"In addition, we asked Apple to take concrete steps to protect content from piracy, since it is estimated that the typical iPod contains a significant amount of illegally downloaded material."

Microsoft CEO Steve Ballmer: "The most common format of music on an iPod is stolen."

So, who do you suppose NBC has been talking with?

 

[IlluminatedSage]

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.

 

[ictiosapiens]

These dumb short sighted studios... Thinking they are holding the pot by the handdle...

Well, if the studios get too funny, all Apple needs to do, is bundle a dvd ripping software embedded with itunes(just as you do with music) and enable itunes to convert divx(etc) to continue to sell ipods... To be honest I don't know why they haven't done this already.

 

[Potus]

""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."
ya think? Wow, Shields is a genius figuring that out.

 

[LethalWolfe]

To be honest I don't know why they haven't done this already.

Because that would most likely get Apple hauled into court for violating the DMCA.


Lethal

 

[MarcelV]

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

I am not involved in the deal here, but I am familiar with content providers in the digital arena, and think I know what NBC is referring to. Phrases like 'flexibility in wholesale pricing' and [Apple to] 'take concrete steps to prevent piracy' are key here. The networks increasingly want to push the streaming concept. In that case, they will be able to control what episodes are available and when. So, flexible pricing refers to, by example, 1.99 for rental for 30 days. And 'take concrete steps to prevent piracy' means Apple will need to ensure that it expires on the iPod after 30 days. Doesn't that sound a lot like Play For Sure and the Zune DRM? IMHO, it's no coincidence. Oh, you want not to expire the episode, that will be $4.99.

This battle is not new. In Cable and Satellite, this is the same battle (getting old btw). Who has the power, carrier or content provider? Both play a game, and both play it fairly hard. And at the end, both need eachother. The content provider need their distribution channels, but distribution channels will need content.

No content provider has been successful in the digital arena to be a carrier, too. That has iTunes going for itself.

 

[ictiosapiens]

Because that would most likely get Apple hauled into court for violating the DMCA.


Lethal

Pardon my ignorance, but why does the DMCA apply to dvds and not to music cds?

 

[gnasher729]

Forbes wrote an article saying that Apple is contractually obligated to show NBC shows through December:

a source familiar with the situation says that Apple is contractually obligated to sell episodes of all returning NBC TV shows through early December.

"A source familiar with the situation" - isn't that the bloke who blabbed out the whole story at a time when it was still considered confidential by both sides?

 

[mashny]

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.

I agree 100% with this. For years, the record industry was losing money because people were pirating music in abundance online. Then the industry said someone needed to come up with a viable online music distribution. After other companies failed, Apple launched iTunes, which became a cultural/technological/social phenomenon. Apart from its technical ease, Steve Jobs understood the psychology of pricing (unlike media companies who only understand gouging). He understood that there's a delicate balance between the maximum price a consumer is willing to pay, and piracy. And it's sooooo easy to priate music. Even DRM-"protected" music can easily be pirated by simply doing a line out from your sound card. The astounding success of Job's business model compared to the ever-dwindling influence and sales of the music industry should tell NBC/Universal/GE all it needs to know about how to sell music.

The thing that the record industry can't stand is that they no longer have the draconian control over the artists and the public that they've enjoyed for the last fifty or sixty years.

For a bit more information on why hula.com is going to have a very hard time, check out http://www.marketwatch.com/news/sto...x?guid={F6263B58-8B79-46B1-9498-3085C5DC88B6}

And for a very interesting analysis of the whole Apple vs. Universal battle, check out http://roughlydrafted.com/RD/RDM.Tech.Q3.07/CE1CC43B-A0E6-45EC-ADB1-4F0C5481244D.html

 

[j763]

uhhhhh yeeeaaahhhh..... hulu.com is going to be really popular

 

[buddhistMonkey]

hulu poop

I read too much misleading statements from apple, I felt offended by that, I don't like being fed misleading informations.

You've mentioned this a couple of times now. Tell us, Mr. Vista Basic, which "misleading informations" (sic) are offending you, exactly?

On a separate topic, I predict that Hulu will fail. Why? Because NBC is involved. If this episode has shown us anything, it's that NBC doesn't understand its own consumer base. As it is, they're going to have to hobble to the starting line now, having just shot themselves in the foot. I wonder, too, what kind of iPod-incompatible DRM they plan to use — hopefully it will work on a Zune, so that they can tap into the hundreds of Zune owners out there.

 

[gusapple]

You've mentioned this a couple of times now. Tell us, Mr. Vista Basic, which "misleading informations" (sic) are offending you, exactly?

Snap! Ouch! Don't get too hostile!

 

[gnasher729]

Pardon my ignorance, but why does the DMCA apply to dvds and not to music cds?

It applies to CDs. iTunes doesn't rip or play any CDs with effective copy protection.

 

[Stella]

<deleted - post already posted!>

 

[mashny]

I'm sure it's been mentioned already, but anyone competing with Apple faces a Catch-22: Since the iPod owns about 70% (give or take) of the player market, any competitor who offers non-iPod compatible content immediately alienates about 70% of its potential audience. But any competitor who offers iPod-compatible content helps boost, or at least maintain, Apple's dominance in the digital media field. The iPod now has the advantage in players that Microsoft has in computers: a huge user base. That, in itself, is an extraordinary "barrier to entry."

There's also a lot to be said for one-stop shopping (how many of you go to shopping malls?). Much as I hate Wal-Mart, that's probably its biggest asset after its low prices. Yes, everyone could pull their content from iTunes, leaving it a weak player in the distribution field, but the average music listener is not going to go to fifty different sites to try to find what he wants. I've bought several songs I hadn't intended on buying, from different companies, on iTunes because of some promotional picture or because, while there, I said to myself, "Oh, I wonder if iTunes has _____." There's a price to be paid for convenience, only now it's the providers who are paying that price, not the consumers. And for most companies, there's nothing more dangerous than a powerful consumer.

Henry Ford famously said, "You can have a Ford in any color as long as it's black." That's the attitude of the record labels/studios today.

 

[LethalWolfe]

Pardon my ignorance, but why does the DMCA apply to dvds and not to music cds?

Part of the DMCA's greatness is that it makes it illegal to in any way break, by-pass, circumvent, reverse engineer, etc., any form of copy protection. DVDs have copy protection where as the vast majority of CDs don't.


Lethal

 

[Loge]

It applies to CDs. iTunes doesn't rip or play any CDs with effective copy protection.

iTunes has ripped the few CDs I have with copy protection just fine. I guess you could say that they had ineffective copy protection.

 

[mashny]

Part of the DMCA's greatness is that it makes it illegal to in any way break, by-pass, circumvent, reverse engineer, etc., any form of copy protection. DVDs have copy protection where as the vast majority of CDs don't.

Thing is, that won't stop people from cracking it and distributing that crack for free on the web.

Not only that, but when the CSS protection scheme (used to "protect" DVDs) was cracked by DeCSS, and the film industry went to court to stop its distribution, the California appeals court ruled that DeCSS technology and the website posting DeCSS was protected by the First Amendment.

Three words for DMCA: Mac The Ripper.

 

[spookje]

I think NBC just wants to have everything streamed. Only this makes it hard to rewatch a movie later on, and when internet is failing or not available where you are. Like evil firewalls blocking it. Really annoying. I don't like streaming this or more internet dependency.

Also those alternatives they suggest in the article are all Windows only as far as I know. Amazon's is Windows only. Maybe they can convince Microsoft to get the DRM working under MacOSX?

 

[frankly]

I'm afraid you're right - Apple's edge as a distributor (with their ipod lock-in and user interface) has always been precarious. At the end of the day content providers can easily use other distribution channels. People will go other places to get the shows they want to see...

It will be interesting to see how hulu.com is compatible with the ipod (or not...)

That may be the case with TV shows but I don't think the same applies to music. The public has made a determination that the iPod is their music player of choice and if they are going to buy music electronically then iTunes is their store of choice.

I don't think that the iPod Video, iPhone, or Apple TV have even begun to reach the same critical mass as the iPod and therefore Apple does not enjoy the same position of power when it comes to negotiating for rights to video. At the same time, I don't think that anyone else has this power either, including the networks. I just don't think that a critical mass of the public has decided to watch their TV in this manner yet, not with the popularity of Tivo and DVD purchases.

Frank

 

[LethalWolfe]

Thing is, that won't stop people from cracking it and distributing that crack for free on the web.

Not only that, but when the CSS protection scheme (used to "protect" DVDs) was cracked by DeCSS, and the film industry went to court to stop its distribution, the California appeals court ruled that DeCSS technology and the website posting DeCSS was protected by the First Amendment.

Three words for DMCA: Mac The Ripper.

Did I say the DMCA kept people from ripping DVDs? No, I just said that the reason Apple won't let your rip DVDs like you rip CDs is because of the DMCA. Apple doesn't want to get buried in DMCA lawsuits and lose court rulings like 321 Studios did. The legal precedent was set when a CA court ruled that the DMCA supersedes the publics long protected ability to "space-shift" content from one medium to another.


Lethal

 

[frankly]

lets see. I actually agree ITMS is like walmart

also, without middle man, A.K.A. Apple, NBCU can lower their price also. Isn't price a shining attraction of walmart other than "all-in-one"?

First of all please don't ever compare anything Apple does to Walmart. That is just wrong on so many levels. Target maybe, but Walmart,

Second, at the ITMS a huge majority (upwards of 80%) goes to the content maker, with only a small percentage going to Apple. They make money from the ITMS but not much over what it costs them to run the store. They created the store simply as a way to sell more iPods.

Frank

 

[mashny]

Did I say the DMCA kept people from ripping DVDs? No, I just said that the reason Apple won't let your rip DVDs like you rip CDs is because of the DMCA. Apple doesn't want to get buried in DMCA lawsuits and lose court rulings like 321 Studios did. The legal precedent was set when a CA court ruled that the DMCA supersedes the publics long protected ability to "space-shift" content from one medium to another.

I understand that. Of course Apple shouldn't and wouldn't break the protection on DVDs. All I meant was that despite the studios' best efforts, people will continue to pirate movies if there's not a reasonably-price digital alternative, especially if the studios insist on the rental model of distribution. Even if Apple decides to play nice with the studios and offer movies for rental, it still comes out ahead.

 

[frankly]

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.

Did you ever stop to think for a minute that maybe Apple needs to act t his way with these content providers because before Apple came along with their way of simplifying the process for the end user (one price, one set of ways to use your purchases) they had NO SUCCESS whatsoever. This is exacerbated by the ridiculous failures of other companies that have come along AFTER the ITMS and tried to mix pricing and use policies up. Again, they have failed where Apple has succeeded. Please give them some credit for having thought this through and not just doing it their way because they are jerks.

Frank