NBC Universal Unlikely to Join Apple's 99-Cent TV Show Rental Program

[newtonrj]

So we are all dancing around but not saying it

Studios are worried about ala-carte Apple doing to them what they see happened to the music industry. Granted that Apple is nearing the point where it is the legit music industry, for music ownership at least.

What is the product here: HD, rented, inexpensive, fast d/l, user-time-determined, commercial-free, one-stop (ie iTunes accounts), video content.

What is the competition: 360-720p, free/commerical-supported/subscription/bundled, mailed to onlined d/l, scheduled/HDR/DVD/on-demand (kinda), multiple outlet to include iTunes, video content.

The studios are worried because they don't know what their product is, where it is going and what it is worth. What they do *believe* is that doing it Apple's way will give them more volume in the short-term but also dilute their other outlets in the long-term.

 

[mdude85]

But which model would be rather buy into?

A rental service which consists of three content providers, with their price points all at $0.99

or

A rental service which consists of dozens of content providers, who set their own price points.

I am not an economist so I have no idea if this is economically valid, or not. I just know that for myself, as a consumer, while I am intrigued by the Apple TV for the possibility of streaming my NetFlix content, the lack of other serious content is a serious downside.

It would depend on the content providers. If the service consists of three content providers that distribute 95% of the best content available at $0.99, I will absolutely choose that option over a service that consists of a dozen content providers that serve 5% of the best content at varying price points.

The price point is a factor, but on the other hand, if the content sucks, it will have little value regardless of the price.

 

[marksman]

Dear Mr. Zucker,

I will pay Zero for Jay Leno at 10/9 CT, but maybe $1.25 for 30 Rock. See how it all averages out?

Actually 99 cents is only entering the price point that I would even consider paying to watch an episode of most tv shows.

I would add to Mr. Zucker and all tv execs, you spend MILLIONS of dollars trying to get us to watch tv shows for free, but then go out of your way to make it hard or burdensome to do it past a certain point. It is completely illogical.

 

[jlblodgett]

It would depend on the content providers and the price points. If the service consists of three content providers that distribute 95% of the best content available at $0.99, I will absolutely choose that option over a service that consists of a dozen content providers that serve 5% of the best content at varying price points.

"Best content available" is a subjective term.

What if a person (or group of persons) watches all of the NBC television shows, but can't stand Fox or ABC.

With no ability to provide NBC content, that particular customer has no interest in the Apple TV at the outset. Whereas, if NBC content was on the device, at least a person knows it's available. It's then up to them to decide if they want to pay $1.99 or whatever for it.

People want choice. I worry sometimes that Apple robs them of it. But then most Apple fanboys stopped choosing a long time ago.

 

[Drag'nGT]

"In a related story. Pirates distribute even more NBC content."

 

[DJinTX]

I don't understand why Apple tries to maintain such a stranglehold over pricing points of music / tv shows / movies / books / etc. Can someone explain why they keep the screws so tight on this type of thing?

Why does Apple care what price point things are set at? If NBC wants to charge $49.99 per episode and Apple gets 10% of the sale - what difference does it make?

This is a free market economy. Let them price things to where they thing the market will bear. I don't think there is so much price control on iPhone / iPad apps, is there?

If Apple allowed any bizarre pricing structure that the networks wanted, then yes that would guarantee them contracts with pretty much anyone. However, customers would not be buying or renting these shows for that price. And if they don't buy/rent the shows, then how many ATVs do you figure Apple will sell?

Answer: Not very many.

 

[jlblodgett]

If Apple allowed any bizarre pricing structure that the networks wanted, then yes that would guarantee them contracts with pretty much anyone. However, customers would not be buying or renting these shows for that price. And if they don't buy/rent the shows, then how many ATVs do you figure Apple will sell?

Answer: Not very many.

You say that - but apple allows "any bizarre pricing structure" with the App Store, and I think that is now one of the great strengths and also the selling points of the iPad/iPhone/iPod Touch.

The implementation of the "bizarre pricing structure" in those particular devices does not appear to have hindered their sale.

 

[marksman]

If you watch 3 TV shows a night 7 days a week, that's 21 TV shows a week, then you have more important problems to deal with.

The average person watches more than that. I don't know what country you live in.

 

[johnfrombeyond]

Apple does have costs -- opportunity costs.

Each day that Apple provides a television rental model that nobody wants to buy into, it means they've lost a day of profits from a television rental model that people do want to buy into.

Well said. They also have a reputation, something that Zucker blew a long time ago. Apple doesn't want iTunes to be known as a place where you get overpriced videos.

Apple created the paid music market by pricing music cheap -- 0.99. Suddenly for many honest people it wasn't worth the effort to pirate MP3's anymore (of course, many people still do and always will). Renting TV shows for 0.99 is a sweet spot that will drive volume, but the greedy networks just don't get it. They can join the greedy magazine and newspaper publishers who want to price their digital content the same as their print material. They just don't get it.

I for one hate the NBC.com web site. Very busy, cluttered, and you have to watch a 30 second ad to see a 2 minute video clip. What are they thinking? Stupid, stupid, stupid.

 

[leroypants]

Apple is absolutely CERTAINLY doing the right thing, so if you're disagreeing with them....well....you're inept.

Typical Cult of Apple member answer about anything apple does.

 

[userexec]

I'll refrain from making comments on their business decisions; however, I know my buying habits quite well. I don't subscribe to cable, and never really cared too much for TV. After a year of having iTunes, I had bought one show. Since rentals came out, I've rented twelve. My spending went up by six-fold, and I don't see it slowing down.

Sure, people like me are probably not their target audience, but those who are allowing rentals sure have made a lot more money off me than they used to.

 

[mdude85]

"Best content available" is a subjective term.

What if a person (or group of persons) watches all of the NBC television shows, but can't stand Fox or ABC.

With no ability to provide NBC content, that particular customer has no interest in the Apple TV at the outset. Whereas, if NBC content was on the device, at least a person knows it's available. It's then up to them to decide if they want to pay $1.99 or whatever for it.

People want choice. I worry sometimes that Apple robs them of it. But then most Apple fanboys stopped choosing a long time ago.

If the customer needs NBC content, then they can choose not to buy an Apple TV. Plain and simple. I don't see how Apple is in control of the situation here. Apple is not forcing anyone to buy its products.

I mean, if you really like NBC, and you really like Apple TV, then that sucks. But choosing one over the other is an individual decision. If you choose Apple TV, you've decided that you can live without content from NBC, and vice versa.

 

[jlblodgett]

If the customer needs NBC content, then they can choose not to buy an Apple TV. Plain and simple. I don't see how Apple is in control of the situation here. Apple is not forcing anyone to buy its products.

Certainly not. But Apple is in the sales business. If they are interested in driving sales it would seem to me that they would want to maximize selling points.

Ultimately everything is the choice of the consumer. Consumers will purchase what suits their needs / desires. If the product doesn't have their needs / desires at the outset, they probably won't pay any further attention to it.

 

[OllyW]

If Apple allowed any bizarre pricing structure that the networks wanted, then yes that would guarantee them contracts with pretty much anyone. However, customers would not be buying or renting these shows for that price. And if they don't buy/rent the shows, then how many ATVs do you figure Apple will sell?

Answer: Not very many.

Are they going to sell very many if most of the networks are not on board offering rentals?

 

[marksman]

I recently purchased HD tv show episodes from Amazon on Demand thru Tivo for $.99, renting for the same doesn't make sense

That will not last. Amazon is currently subsidizing this price reduction in sale shows to ward off Apple TV. Amazon can't afford to just eat their loss on those shows forever. Right now they sold them to you for less than they paid for them by a not insignificant amount.

For me, I would be in favor of a by choice thing, where perhaps they used credits. Perhaps you get a bit of a bargain for buying more credits. Perhaps on average 50 cents for an hour show, 35 cents for a half hour show. Like I said with bulk discounts.

 

[SG1-1]

Originally Posted by dwd3885
The AppleTV will fail if there are only two networks on there for rental. Go back to purchase, allow customers to save the content in the apple cloud, like Zune or Amazon Unbox.

The same Limited mentality as the corporate shirts have.

Did it ever occur to you that the New Apple TV Offers a Hell of allot more then .99 Cent TV show Rental's.

Also did you MISS the part about being able to Stream "ANYTHING" From a iPhone, iPod, iPad, Laptop, Desktop To The apple TV and watch it on your Big screen. not to mention Netflix and now Individual Application's "at the correct time".

See, it's clear that when a few people say it will fail because of just (1) one thing, they clearly have no clue how business is conducted, have a blind hatred for the product or company they are directing the hatred towards and are to young to come up with anything viable to back their absurd claims.

Oh by the way, The Haters said the same about the iPhone,iPod Touch & iPad, it wasn’t true then and it isn’t true now.

A product must have "Multiple" Shortcomings to Fail, Offering a Content Price is a service to be offered to its customers, not a deal breaker and since you can still Purchase any of the content for $1.99SD or $2.99HD from any iTunes enabled Desktop or laptop and or authorized device and stream it to your Apple TV.

And for the last point, The New Apple TV is a STREAMING Device to offer content from a general location instead of Lugging around your hard Drives and hooking them up to multiple TV or having Redundant Drives of Information on Many different TV's or Etc. In your Home.

(1) ONE place for General Storage,Stream to MANY Sources without 3 or more copies of the same data in different locations.

Application for individual Streaming Will come soon Enough.

Can Stream ANYTHING from a iPhone, iPad, iPod, Laptop etc. To the Apple TV and watch it on your Large Screen.

You Can Still Purchase TV Shows for $1.99 SD $2.99 HD on any Laptop, Desktop , iPod , iPhone , iPad and Stream it to your Apple TV.

Just Purchase the Dam DVD's and Rip them, This is Something that these Shirts didn't consider at all, Looks like they need to rethink their positions on this claim and understand that if people want the content, they will get it anyway they can.
Offering it at a reasonable Price (Still to Much) only gives users a Easy way to get content Fast and reasonably Cheap, It will only hurt the Networks and increase Piracy due to the ease of possessing it.

It won't hurt Apple, It just shows Consumers Just how Unreasonable the Networks Are, And Maybe this is what Apple is trying to show users; that it is not them (Apple) that dictates the prices and they are not as bad as a Few Haters Might Think.

SO BIG DEAL, This will far then Fail with all the Options this Device Offers, and like I said.

"The Haters said the same about the iPhone,iPod Touch & iPad, it wasn’t true then and it isn’t true now."

 

[johnfrombeyond]

People want choice. I worry sometimes that Apple robs them of it. But then most Apple fanboys stopped choosing a long time ago.

Sounds like you want people to make YOUR choice or you just label them "fanboys". We have all the choice we need -- nobody has a gun to your head to buy Apple products. If you don't like Apple products, don't buy them. If people like Apple products, maybe they are really "satisfied customers" rather than "fanboys".

I don't see how Apple could cater to the illogical and out of touch NBC on this one. Imagine the confusion in the market if some rentals were $1.99 and some purchases were $1.99. I can hear the tech support calls to Apple now: "I just assumed for that price I was buying, not renting". Since NBC has already agreed to $1.99 purchases, the only rental price that makes sense is $0.99.

After all, NBC didn't say they were against rentals, they said they were against rentals AT THAT PRICE. Which doesn't make any business sense when they are competing against broadcast TV and Hulu (which have zero out of pocket cost to viewers).

 

[jlblodgett]

Sounds like you want people to make YOUR choice or you just label them "fanboys". We have all the choice we need -- nobody has a gun to your head to buy Apple products. If you don't like Apple products, don't buy them. If people like Apple products, maybe they are really "satisfied customers" rather than "fanboys".

I don't see how Apple could cater to the illogical and out of touch NBC on this one. Imagine the confusion in the market if some rentals were $1.99 and some purchases were $1.99. I can hear the tech support calls to Apple now: "I just assumed for that price I was buying, not renting". Since NBC has already agreed to $1.99 purchases, the only rental price that makes sense is $0.99.

After all, NBC didn't say they were against rentals, they said they were against rentals AT THAT PRICE. Which doesn't make any business sense when they are competing against broadcast TV and Hulu (which have zero out of pocket cost to viewers).

These sorts of comments don't make sense to me. Isn't this EXACTLY the way the App store has been working for the past year+? With different price points? Apple announced recently that downloads from the App Store are about to overtake downloads from the iTunes store. How is that so? How can the App Store with all the different price points of the apps be outselling the iTunes store with it's one-price-for-all model?

 

[mdude85]

Certainly not. But Apple is in the sales business. If they are interested in driving sales it would seem to me that they would want to maximize selling points.

Apple was interested - it was NBC who pulled out because it felt its product was being undervalued. Apparently Apple did not agree (and judging by the tenor of this thread, most of us don't agree either). Apple decided that a price floor at 0.99 was going to maximize its profit compared to a price floor at some other number.

 

[mrpither]

...and yet Hulu is free.

google "hulu plus" and see what you see. or check the hulu app on your iOS device.

 

[PeterQVenkman]

Being one of those people myself not too long ago, I can tell you that this is BS. Plain and simple.

Of course, you and I worked in the same building, so you know how this affected so many of my co-workers, right?

I fully expect the demise of OTA TV, and that is how I make a living now. Again, this has been in motion for quite some time. Technology and the broadcasters themselves will be the culprit, not Apple.

Apple is the technology here.

The financial risk is ALWAYS on the developer's and creators.

Of course it is to create content, but you oversimplify:

From David Barnes:

For the iPhone, apps are virtually a loss leader -- but it's the developer's loss and Apple's lead. More and more, Apple uses the availability of free and cheap apps to market the iPhone and iTouch. The promise is: buy this device for a few hundred bucks, and gain access to thousands of free or cheap games and apps.

Now they do the same for television. Apple TV, while cheap, doesn't work without an Apple computer (cha ching!) to back it up. Their psychology is genius. 99 cents a show. 99 cents a song. 99 cents an app. 99$ for Apple TV.

The distributors ALWAYS devalue the product.

So... we agree then? Because I said Apple is devaluing TV shows, and Apple is the distributor.

Apple announced recently that downloads from the App Store are about to overtake downloads from the iTunes store. How is that so? How can the App Store with all the different price points of the apps be outselling the iTunes store with it's one-price-for-all model?

Ad supported free apps and demo/lite versions. And that's downloads. I don't know about how much money they are raking in.

 

[fxtech]

The same Limited mentality as the corporate shirts have.

Did it ever occur to you that the New Apple TV Offers a Hell of allot more then .99 Cent TV show Rental's.

Also did you MISS the part about being able to Stream "ANYTHING" From a iPhone, iPod, iPad, Laptop, Desktop To The apple TV and watch it on your Big screen. not to mention Netflix and now Individual Application's "at the correct time".

I can already do that with my PS3 and DirecTV receivers, and a lot of TVs have Netflix, HULU, and media streaming built-in as well. And they all do it in 1080P.

So no, the Apple TV doesn't really offer anything new.

But feel free to enjoy that cool-aid!

 

[mdude85]

These sorts of comments don't make sense to me. Isn't this EXACTLY the way the App store has been working for the past year+? With different price points? Apple announced recently that downloads from the App Store are about to overtake downloads from the iTunes store. How is that so? How can the App Store with all the different price points of the apps be outselling the iTunes store with it's one-price-for-all model?

The App store is only an illusion of different price points. It was Apple who decided that you can give an app away for free if you'd like... but if you want to sell it, it needs to start at 99 cents, not 10 cents or 50 cents. Once the price floor is set at 99 cents, and developers begin submitting apps at that price point, it's difficult to sell it for significantly more unless the app has incredible value.

Just look at the top 25 paid apps on App Store right now. 16 out of 25 are 0.99, and no app is priced above $4.99.

 

[dscuber9000]

Personally, I'd rather either buy the episode, or just watch it on Hulu. I like the idea of renting TV shows for 99 cents, but when you can watch them for free with only two or three ads total, I might as well do that, right?

Oh, and I just bought Season 7 of The Office a few days ago, FYI.

 

[Boomchukalaka]

"We thought it would devalue our content," Zucker said"

Devalue the content?? This is NBC for chrissakes!!!!

How Zucker remains in control of this network is one of life's great mysteries...