iTunes and NBC are in a nasty fight. No more NBC shows on iTunes

[Dan C]

Sign of things to come with record companies? Ugh.

dan c

http://www.msnbc.msn.com/id/20531069/

iTunes to drop NBC shows before contract ends
Apple to stop selling news, sports, entertainment videos before fall season

Updated: 12:12 p.m. MT Aug 31, 2007
NEW YORK - Apple Inc. escalated a dispute with NBC Universal over the pricing of television shows by announcing Friday it would not sell any of NBC's programs for this fall season on iTunes.

Earlier, NBC had told Apple that it would no longer allow its programs to be sold via iTunes at the end of the year. NBC Universal-controlled television programming accounts for an estimated 40 percent of the video downloads on iTunes.

(MSNBC.com is a Microsoft-NBC Universal joint venture.)


"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

Rather than cut off NBC programs in the middle of the season, Apple decided to stop before the new fall episodes premiere next month, he said.

That would be a blow to fourth-place NBC, which could use the buzz provided by Internet sales for its programming — not to mention the money.

ABC, CBS, Fox and the CW, and 50 other cable networks, have deals in place to sell fall shows at iTunes' current price of $1.99 per episode, Apple said. NBC wanted Apple to pay more than double its wholesale price for the material, which would have resulted in the retail price increasing to $4.99, Apple said.

NBC had no immediate comment on Apple's move.

The company's contract to sell more than 1,500 hours of news, sports and entertainment programming on iTunes expires at the end of December. NBC fulfilled its requirement to inform Apple by Friday if the contract would not be renewed, said Amy Zelvin, spokeswoman for NBC Universal Digital.

The dispute illustrates unrest among content providers over Apple's pricing policies. Media companies want more say in pricing and, in NBC Universal's case, are eager to offer different packages by bundling programs at different prices. Similarly, record companies would like to see an increase in iTunes' sales price of 99 cents per song.


Availability of Web-popular programs like USA's "Psych," NBC's "30 Rock" and Sci Fi's "Battlestar Gallactica" would be affected by the non-renewal. It's not immediately clear when Apple intends to cut off sales of programs from NBC Universal's cable properties.

NBC Universal also wants iTunes to stiffen anti-piracy provisions so computer users would not have easy access to illegal downloads.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[Director]

I don't think the networks can comprehend that the reason people are buying stuff off of iTunes is BECAUSE the price point is so low. They will push all of their customers away by increasing it (just like the record industry) and then their customers will just download illegally.

When will they get it?

[wayneklein]

That's the reason I will occasionally buy stuff there particularly for shows I'm following but have missed on network TV. I'll download them to my ipod to watch when I'm traveling.

[listner_matt]

Yeah, I'll just add to Jason's "just like the record industry" comment. Sadly, NBC just comes off as greedy here -- basically, they had no online revenue stream for shows before iTunes, and now they just want more money for something that generated $0 income previously. And they'll probably end up with an even-worse distribution model than iTunes however they sell the next time round...

[Driver 8]

I don't think the networks can comprehend that the reason people are buying stuff off of iTunes is BECAUSE the price point is so low. They will push all of their customers away by increasing it (just like the record industry) and then their customers will just download illegally.

When will they get it?

I agree. $4.99 an episode is going to push a lot of people who want to do the right thing to free services such as Bittorrent, imho.

[Yankee8156]

I don't download shows at $1.99, but I wouldn't even conceive of downloading a show at $4.99. I'd rather wait for the DVD set and get it all for much cheaper in a much better format.

Take a show like The Office, which is probably one of the top shows on iTunes. At $1.99 an episode (I think there's 23 episodes in the 3rd season), it would cost you $45.77 to purchase the entire season. The DVD of the complete 3rd season is being released this week, and Amazon will be selling it for $31.99.....almost $15 cheaper. (I understand you can download the episodes the next day, but that's a separate issue.) If they raised the price to $4.99 an episode, you would be paying $114.77 for the complete 3rd season. You could have it on DVD, with bonus features and commentaries, for $82.78 cheaper.

While it still might not be the best deal (vs. DVD sets) at $1.99 an episode, it would be a complete rip-off at $4.99.

[cooper16]

I don't think the networks can comprehend that the reason people are buying stuff off of iTunes is BECAUSE the price point is so low. They will push all of their customers away by increasing it (just like the record industry) and then their customers will just download illegally.

When will they get it?

Exactly. Getting people to purchase something they can download for free is the genius of the iTunes store. You'd think the labels/studios would realize that some revenue is better than none. Do they really think people are going to surf to the NBC.com website to purchase an episode of The Office? The average consumer doesn't know or care what studio produced the show and they certainly aren't going to create an account on the website of every media company that is too greedy to offer their content on iTunes. They want to be able to get all of their content in one location at a reasonable price. Crazy stupid, but in no way surprising. :shake:

[Grant]

I've downloaded a couple of Fox shows. I can burn them to DVD

Perhaps NBC is having such financial problems that they think they can more than double the price of their shows...and people will still buy them. Well, if NBC wants people to buy the shows, they have to come up with shows people will want to watch in the first place.

[Surfin Jesus]

people will have to watch TV on their...TV??!

supposedly, this (http://www.hulu.com/) is the rest of the story (http://www.fool.com/investing/general/2007/08/30/say-hello-to-hulu.aspx)

[El Bacho]

Talk about shooting yourself in the foot...

"The Office" was a struggling show on the verge of cancellation until it was offered on iTunes. It quickly became their most downloaded show there: people who couldn't watch it on TV downloaded it the day after and watched it with their colleagues on their computer in actual offices. That's what started the word of mouth. Greg Daniels and other The Office producers have talked about it. That's also what made NBC realize that it was a hit within interesting viewers segments, something that the polls hadn't establish.

So NBC thinks they have a working strategy of their own for TV shows on the net (they opened many streaming sites over the last few months) and they think they can get rid of Apple, before the whole pricing and distribution process gets out of their control, just like it supposedly did for music majors. At least, NBC had a share of something by selling the episodes, now they could get the whole of nothing.

Anyway, as I'm living in France, where there's currently no TV shows on iTunes, I can't say it will affect my life...

[Curiosity]

Whatever one might think of people like Apple the one advantage is they offer you the downloads all from one point at a low price. The fact it is a doddle to use with their I-pod - the most popular portable A/V system around - seals it.
It's same corporate thinking behind Universals spat with I-tune - we want more money and control.

[hifisoup]

I don't think the networks can comprehend that the reason people are buying stuff off of iTunes is BECAUSE the price point is so low. They will push all of their customers away by increasing it (just like the record industry) and then their customers will just download illegally.

When will they get it?

You are right. They will never get it. They are greedy idiots.