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

[alent1234]

I'm curious to know how much the network actually gets from one viewer watching ad supported content... Because if it's 99 cents those advertisers are wasting a lot of money on me...

a lot of it is branding. you go to the store and buy something familiar. a lot of crappy stuff out there that people buy only because it's a national brand. lately i've noticed that a lot of the stuff at Whole Foods is the same price or cheaper than the regular store simply because it's not advertised on TV.

i remember in 1981 when i first came to the US and was watching cartoons there were McDonalds commercials constantly. i bet that investment paid off.

 

[alent1234]

i want to do this cool high tech streaming thing but every time i add up the costs of a la carte internet and phone service it's always cheaper with time warner cable and their DVR

 

[bumpobumpu]

Not enough people realize the wonders of Divx streaming, when enough people come around and realize they can watch ANYTHING for free, these companies will have some motivation for change. Not that I would even pay for a 1¢ rental, it's just too much of a hassle.

 

[err404]

So, tell me again how $.99 for one viewing is undervaluing the content?

He didn't say that $1 ($.70 after Apples cut) is less then value of the content. He said rentals may devalue the broadcast space.
By displacing users who would have otherwise watched the live broadcast, the price that the Networks can charge for advertising plummets. Primetime national ads are not sold on a linear pricing scale per viewer, a drop in viewers results in a disproportionately large drop in ad pricing. Depending on how many viewer take up rentals, the Network could lose money overall.

 

[jpine]

I'm missing something here. Why would I pay Apple for watching a network show that I can watch for free and in better HD quality via the airwaves?

 

[err404]

I'm missing something here. Why would I pay Apple for watching a network show that I can watch for free and in better HD quality via the airwaves?

Obviously your not the intended market. Here are a few reasons I like the rental model:

I watch relatively little TV
I tend to watch more cable shows then network (SG:U, Caprica, MadMen, Futurama, Boardwalk Empire)
I tend to start watching shows after the airing of the first season
I watch TV when I have time, not when something is airing
I don't like commercials​

Sure a good DRV and cable will deal with a lot of those points, but frankly I rather pay the buck to just select the show and hit play. Apples model is exactly what I'm looking for. Sadly I don't think it will happen.

 

[jpine]

Obviously your not the intended market. Here are a few reasons I like the rental model:

I watch relatively little TV
I tend to watch more cable shows then network (SG:U, Caprica, MadMen, Futurama, Boardwalk Empire)
I tend to start watching shows after the airing of the first season
I watch TV when I have time, not when something is airing
I don't like commercials​

Sure a good DRV and cable will deal with a lot of those points, but frankly I rather pay the buck to just select the show and hit play. Apples model is exactly what I'm looking for. Sadly I don't think it will happen.

I'm completely with you on the SYFY Channel stuff. Giving myself permission to watch those programs a week late online got me off cable, though at reduced picture quality. My post was mainly within the context of network programming.

 

[alent1234]

i used to watch caprica and BSG after they aired on my time warner DVR. new feature with time warner with some channels is you can start to watch a program after it starts, press a button and it will stream it for you from the beginning.

unless you're a very light TV watcher every time i run the numbers it's cheaper to pay for cable than iTunes

i've even thought about getting rid of my home phone until now. i just paid my cell phone bill and it was $20 more than usual. reason is my wife used more minutes because we were in the process of moving and didn't have a home phone set up

 

[Centient]

If any company should be clamoring for some way to get their shows seen by people it's NBC. Zucker has overseen the near complete disintegration of this network and yet he's still at the helm. It's amazing how his incompetence continues to be rewarded.

 

[vladzaharia]

When I look at the App Store (iPhone only) top 25 list I see:

16 Apps priced at $0.99
2 Apps priced at $1.99
6 apps priced at $2.99
1 App priced at $4.99


Of course, the Top 25 on the iPad list is significantly different.

Look at the top GROSSING apps -- the #1 grossing App is $4.99. In fact, of the Top 25 GROSSING app store apps, there are only SEVEN (7) priced $0.99 or less.

The fact that apps priced above the baseline ($0.99) are currently among the most popular, and certainly among the top grossing, lends a lot of credibility to NBC's position, imo.

People will pay more for a quality product. Whether the content NBC broadcasts is quality (or not) is certainly debatable.

But TV Episodes are in a completely different market than games and applications. You probably want to play a game, or use an application, more than once, but, for TV Episodes, you're realistically only going to watch it once, even if you buy the episodes. Therefore, its value is much, much lower.

 

[err404]

I'm completely with you on the SYFY Channel stuff. Giving myself permission to watch those programs a week late online got me off cable, though at reduced picture quality. My post was mainly within the context of network programming.

NBC owns SyFy. I always assumed it comes along for the ride if NBC signed up

If any company should be clamoring for some way to get their shows seen by people it's NBC. Zucker has overseen the near complete disintegration of this network and yet he's still at the helm. It's amazing how his incompetence continues to be rewarded.

Your missing the point. NBC doesn't directly care how many people watch the shows. They care about how much profit they generate. The lions share of revenue comes from advertising. Advertisers don't care how many people watch the show either, they care about how many see their ad.

 

[Centient]

Your missing the point. NBC doesn't directly care how many people watch the shows. They care about how much profit they generate. The lions share of revenue comes from advertising. Advertisers don't care how many people watch the show either, they care about how many see their ad.

I think you and Jeff might be missing the point. NBC is shedding viewers every year. Their ad revenues, accordingly, have been falling off dramatically since 2008. Between 08 and 09 their ad revenues were off by 18%. Compare that to Fox, CBS, and ABC whose revenues were also down around 4% each. In fact NBC has lost over 50% of it's value in the past few years.

Apple TV isn't a panacea for NBC's problems, but I question the decision to dismiss any source that gets its programming exposure. Though understandable that people can disagree on this issue.

 

[err404]

I think you and Jeff might be missing the point. NBC is shedding viewers every year. Their ad revenues, accordingly, have been falling off dramatically since 2008. Between 08 and 09 their ad revenues were off by 18%. Compare that to Fox, CBS, and ABC whose revenues were also down around 4% each. In fact NBC has lost over 50% of it's value in the past few years.

Apple TV isn't a panacea for NBC's problems, but I question the decision to dismiss any source that gets its programming exposure. Though understandable that people can disagree on this issue.

I don't see how the two are related. There are only X amount of hours viewed each day to distribute between shows. Since we can assume that the 4 big Networks are similarly available to viewers during the declining years, the reason for the drop off must be the quality of programming. The only way to gain viewers is to take them from another Network. That means creating more compelling content.
Let's look at two scenarios:
If all of the network join Apple, NBC will be no better then they are today since the shows availability will be in line with the competition. In fact they may be worse off as rentals increase and they lose advertising revenue from the broadcast division.
If NBC and WB hold out on rentals, AppleTV will probably fail to see significant adoption and continue to be a "hobby". NBC continues to compete with the same availability as the other networks and the eliminate the risk of lost ad revenues from the market shifting away from broadcast viewing.

 

[mrochester]

People seem to want high quality content, for next to nothing, and if they don't get, they steal it. What are the networks to do?

 

[Bregalad]

Can't remember watching NBC

It's been years since I watched any show broadcast on NBC and from recent ratings it appears I'm not alone, so the idea that any of their shows is worth more than $0.99 is comical.

 

[Bregalad]

There are only X amount of hours viewed each day to distribute between shows. Since we can assume that the 4 big Networks are similarly available to viewers during the declining years, the reason for the drop off must be the quality of programming. The only way to gain viewers is to take them from another Network.

I would argue that people simply don't watch as many hours of television as they used to. There are millions of potential viewers who couldn't find anything good to watch so they found something else to do with their time. Stealing from other networks might be easier because those people are still devoting the hours to watching television, but it's not the only way.

 

[Bregalad]

People seem to want high quality content, for next to nothing, and if they don't get, they steal it. What are the networks to do?

Do exactly what the music industry was forced to do:
1. make it easier to acquire their content legally than it is to find a torrent
2. don't limit people's ability to consume that content when/where they want
3. set prices based on the market and not some pre-conceived notion of what something "should" be worth.

If, at the end of the day, the revenue from such sales doesn't cover the cost of production then they need to take a long look in the mirror. Maybe the whole business of broadcast television is reaching the end of its life.

 

[mrochester]

Do exactly what the music industry was forced to do:
1. make it easier to acquire their content legally than it is to find a torrent
2. don't limit people's ability to consume that content when/where they want
3. set prices based on the market and not some pre-conceived notion of what something "should" be worth.

If, at the end of the day, the revenue from such sales doesn't cover the cost of production then they need to take a long look in the mirror. Maybe the whole business of broadcast television is reaching the end of its life.

I can't see that a board of directors would go along with that approach, don't you think?

 

[fxtech]

Do exactly what the music industry was forced to do:
1. make it easier to acquire their content legally than it is to find a torrent
2. don't limit people's ability to consume that content when/where they want
3. set prices based on the market and not some pre-conceived notion of what something "should" be worth.

This is precisely why I pay for satellite. I get high quality (1080P + 5.1 surround) video I can watch anywhere in my house, whenever I want, and I can consume as much of it as I want for a fixed price. To me, those benefits outweigh all of the compromises forced on us by Internet/streaming solutions.

 

[lightsp33d]

Greed clouds your thinking. At 99 cents chances are people will watch a show more than once, maybe on average three times. We all know we love reruns.

Give it 2 years: everyone will be on AppleTV and the price per sitcom viewing will be 49 cents.

 

[Bregalad]

I can't see that a board of directors would go along with that approach, don't you think?

If you can't make a profit with your current business model you can either change the model or pray that the market changes before you run out of money. I wish NBC and their fellow broadcasters good luck with door #2. They have far more faith than I do.

 

[floatingspirit]

Looks like I'll be holding out for the newer seasons of The Office, 30 Rock and SNL to become available for streaming on Netflix then.

Hah! Here, here!

Stupid CEO dudes.

 

[FieldingMellish]

I can see renting cable shows if you don't get cable. But shows that are on TV for free already? You'd have to be a super-fan of the TV show.

 

[balamw]

Looks like I'll be holding out for the newer seasons of The Office, 30 Rock and SNL to become available for streaming on Netflix then.

Well NBC just made a deal with Netflix.

http://gizmodo.com/5646874/netflix-...kking-battlestar-galactica-to-watch-instantly

Next-day showings of this season's SNL, and up to last season of Office/30 Rock.

Something tells me they won't be getting $0.69/view from all the folks on the $8.99 Netflix plan. What a weird way to do business.... Devalue the content, my rump. I could easily see many folks renting more than 9 NBC/Universal shows/episodes per month from TV.

Plus this makes all the content available on TV anyhow.

B

 

[spudgeek]

I'll rent for 99¢ / won't buy for $1.99

I've only ever bought aTV shows when I couldn't find the shows any other way. Why not more? Because it's tooooo dang expensive! Also I don't want to keep the shows after watching them... maybe it's just me but after paying $1.99 (multiply for a series) for a show, I don't want to throw them away. Maybe I'm a digi-media hoarder or something - maybe it just p***es me off because I paid good spondulicks for the content and so don't have it in me to just trash it!

I won't be canceling my Cable/FiOS subscriptions anytime soon just because I have the opportunity to rent [aTV] shows that are unavailable on cable.

Bottom Line NBC: you'll get more kaching! from me with ¢99c rentals that you will through $1.99 purchases... and I'm not alone!

P.S... Does anyone know if the $1.99 sales have generated a significant boost to the networks' other revenue streams?