Space Ramblings

NBC Dumps Steve

No not Carell. Jobs.

While there is no question that iTunes has had a huge amount of success in becoming the music warehouse of the web, Steve Jobs’ plan to sell TV shows through iTunes has never been that impressive. For starters the proposed destination of these videos is supposed to be the iPod and watching a TV show on an iPod screen is almost enough to make you want to go back to Viewmasters as your default form of entertainment. For seconds the TV industry isn’t nearly as desperate and hopeless as music to get into bed with Apple.

Selling Office episodes on iTunes had been one of the limited successes there, a success which now comes to an end as NBCi pulls out of iTunes to co-launch Hulu with FOX and sell their TV episodes there. Like most iTunes killers that come out of the corporate world, Hulu seems every bit as great a prospect as tossing 10 million dollars out the window and letting dogs pick it up and deliver it back to you. The name doesn’t exactly help either. But that doesn’t exactly help Apple gets beyond music content.

ABC, for as long as the Pixar Trojan horse puts Steve Jobs inside the belly of the Disney ABC beasts, is certainly going to list shows on iTunes but then again you can just watch an ABC TV show full screen in HD on the ABC website. The only appeal that buying an episode of Lost has on iTunes is that you can watch it while squinting over a tiny screen. Pass.

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Comments
  • Savage September 2, 2007 at 11:48 am

    It is more like Steve dumping NBC me think…

  • Big Al September 2, 2007 at 1:09 pm

    50 million episodes sold is 50 million more than the networks had before iTunes started selling TV episodes. That’s 18 to 20 million in profit NBC just walked away from. Stockholders must be impressed.

  • O_Deus September 2, 2007 at 1:48 pm

    iTunes doesn’t provide either Apple let alone NBC Universal much of a profit margin unlike say DVD season sets

    volume isn’t profit

  • O_Deus September 2, 2007 at 1:49 pm

    No it’s Universal dumping Steve, which is why Apple spent so much time in denial claiming negotiations were continuing

  • Robert September 2, 2007 at 5:09 pm

    You got it wrong: iTunes dumped NBC because of their cutthroat behavior. Good for Apple!

  • O_Deus September 2, 2007 at 6:24 pm

    nice try but no

    NBC didn’t renew its contract

  • Deus Mortis September 2, 2007 at 6:26 pm

    “iTunes doesn’t provide either Apple let alone NBC Universal much of a profit margin unlike say DVD season sets

    volume isn’t profit ”

    BS. iTunes Store was set up to be a break even business for Apple, meaning that after the costs to operate the store and a sliver of profit, everything else goes to the content owner. Now compare the price of the DVD set for Lost at Amazon: $38.99 and the season pass at iTunes Store: $34.95. Now remember that there are no DVD to press and packaging and inventory issues. You also need to account for Amazon’s profit. Can you still say that the profit margin for low res show through iTunes Store is nothing compared to the profit margin for the DVD?

    “No it’s Universal dumping Steve, which is why Apple spent so much time in denial claiming negotiations were continuing”

    Wrong, read the press releases. It’s NBC that claims the negotiation is still continuing. In fact, Apple went to the offensive by refusing to sell new episodes for the upcoming seasons because the deal terminates in the middle of the season. It’s hardly the action of a desperate company.

  • O_Deus September 2, 2007 at 7:30 pm

    The season pass isn’t the issue. Individual episode prices are. Most people do not buy season passes if they have the option of buying individual episodes.

    Apple’s offensive was an attempt to try and play “You can’t fire me, I quit” when it was clear they were being dumped anyway

  • Deus Mortis September 2, 2007 at 7:51 pm

    “The season pass isn’t the issue. Individual episode prices are. Most people do not buy season passes if they have the option of buying individual episodes.”

    Eh? Individual prices actually give the studio more money per episode. At $1.99 a show, a TV season with 24 shows actually costs $47.76. Sure you can argue that forcing people to buy a full season can give the studio a bigger profit than if they let customers buy a single show, but that idea has been proven unworkable in the music business. Force people to do what they don’t want and they’ll go and use torrent/USENET/web flash video. You know what that means for the studios? Right… bye bye cash.

    Unlike record labels, the studios actually have a better chance of selling the whole season, because some shows tell continuous stories and people don’t like missing out an episode or two if they can help it. Thus, if they like a specific TV show, it’s likely that they follow it for the whole season even without the studios forcing them.

    “Apple’s offensive was an attempt to try and play “You can’t fire me, I quit” when it was clear they were being dumped anyway”

    That’s like the opposite of what you’ve said about Apple being in denial. Actually, the situation is more like:
    NBC: I don’t like playing with you. I am going home and I am taking my ball with me.
    Apple: Fine, bye bye. And please take your other toys.
    NBC: We’ve agreed to play with other toys until next month so if you stop playing, I’ll tell the teacher. (i.e. NBC has contacted its lawyers to make sure that Apple keeps selling shows as agreed until the current contract runs out. Now, see who’s afraid?)

    I really don’t see how as a customer you can be happy at the idea of NBC dumping Apple because Apple refuses to increase the price to $4.99 a show, unless you are an Apple-hater or an NBC employee.

  • O_Deus September 2, 2007 at 8:52 pm

    As I just said most people won’t buy every episode of a show in a season. A DVD set bundles every episode together and forces the customer to buy them much as a CD did. Individual episodes have the MP3 effect of letting customers pick a few individual songs/episodes they like and jettisoning the rest. That is not profitable for NBC.

    Some shows like Lost can be so intertwined that viewers can’t miss an episode but the average NBC offering like The Office or Scrubs aren’t in that category.

    As for NBC vs Apple. Universal dumped Apple and left it hanging last time around when it came to music. This time once Apple understood that NBC Universal was dumping it when it came to TV content, Apple did its preemptive, “You can’t fire me I quit” routine while NBC is simply holding Apple to the contract, regardless of Steve Jobs’ tantrum

    As a customer I don’t shop at iTunes anyway or own an iPod so it makes no difference to me what either side does. I also don’t buy digital downloads with DRM

  • Deus Mortis September 2, 2007 at 9:55 pm

    “A DVD set bundles every episode together and forces the customer to buy them much as a CD did. Individual episodes have the MP3 effect of letting customers pick a few individual songs/episodes they like and jettisoning the rest. That is not profitable for NBC.”

    Did you read the part about Torrent/USENET/YouTube-like websites? Forcing people to buy the whole season or $4.99 per episode only drives people to other means of watching the show. People don’t buy $40 DVD set unless they are interested in owning a show in the first place. If they could miss an episode without skipping the storyline and they are not interested in owning the DVD set, they won’t spend $40 for it. iTunes Store actually gives NBC a chance to get some money from this impulse buy and if NBC removes this option, there are other ways to get them or if the show episodes are non-continuous, people can just forget about it. What’s more less profitable? $0.00 from piracy or a big percentage from $1.99? This is simply the reality today. Your argument about DVD giving studios bigger profit doesn’t look at a bigger picture. You assume customers are dumb enough to follow studios’ every whim.

    There is also another indirect advantage that you don’t see from comparing DVD vs download prices. The Office had a so-so rating and iTunes Store helped it to become one of the highly-rated show and thus, increase the advertisement fee for NBC.

    “This time once Apple understood that NBC Universal was dumping it when it came to TV content, Apple did its preemptive, “You can’t fire me I quit” routine while NBC is simply holding Apple to the contract, regardless of Steve Jobs’ tantrum”

    So, if NBC does it, it’s dumping Apple. If Apple does it, it’s tantrum. If NBC does it, it’s holding Apple to a contract. That shows your bias already. By the way, a contract supposed to give Apple the right to distribute a show, but isn’t it ultimately up to Apple if they want to distribute the show or not? The funny thing is, if Apple is very afraid of being dumped as you say, they can just agree to NBC’s demand and pass the cost to the customers, can’t they? Apparently they are not afraid enough to reject NBC’s terms to avoid screwing their customers.

    As for Universal dumping Apple, you still can find Universal artists on iTunes Store. Universal doesn’t want to sign a long term contract, but they are not brave enough to pull out of a very successful download service either. Incidentally, the same argument applies. Apple rejected Universal’s pressure to increase prices. If Apple is afraid of being dumped, they can accept Universal’s demands. But they didn’t. Hmmm….

  • O_Deus September 3, 2007 at 2:51 pm

    If people want a free ride, they’ll take it anyway whether or not iTunes exists. Since NBC is creating its own site to sell the episodes, people will have a legal option.

    iTunes sales helps cover costs but without ratings or the promise of ratings, a show won’t stay on. Call that the DVD Firefly lesson.

    Apple can’t pass the cost to customers because

    1. Steve Jobs tend to seize inflexibly on an idea and hold to it until it’s shaken out of him

    2. iTunes isn’t making money for Apple, iTunes is just a way to sell iPods, which means Apple needs the 99 or 1.99 image more than it needs to have a selection.

  • JS September 3, 2007 at 8:02 pm

    “1. Steve Jobs tend to seize inflexibly on an idea and hold to it until it’s shaken out of him,”
    Yeah, right you know him personally I take it & have done business deals with him, right?

    2. iTunes isn’t making money for Apple, iTunes is just a way to sell iPods, which means Apple needs the 99 or 1.99 image more than it needs to have a selection.”
    You seem to have issues with Apple or Jobs. Why does the ulterior motive matter to you, when you are getting the benefit of lower prices. What exactly do you think Walmart does? It negotiates with it’s partners to bring down prices so that people will shop at their stores. There is really nothing new here. You don’t buy DRM media. Well than why do you even care? What do you think the market would be like with MS in charge?

  • O_Deus September 3, 2007 at 9:59 pm

    1. Oh come on. Two button mice. Floppy drives. Video players. The list goes on and on.

    2. What is the point of assigning ulterior motives to anyone who disagrees with you? I don’t like Wal-Mart any better than I like Apple and I think both have had a corrosive effect on a free market.

  • Savage September 4, 2007 at 2:10 am

    “Apple (…) … had a corrosive effect on a free market.” … … It’s a joke, right? …. Is it?… Speaking of free market, have you noticed that
    Microsoft rime with handcuff.

  • Chris September 4, 2007 at 8:32 am

    I guess my only problem with your DRM argument against iTunes is that one of NBC’s prime complaints against iTunes was that the DRM wasn’t strong enough. So, the ironic part as anti-DRM guy, is that your throwing your support behind a company that wants to tighten DRM restrictions further.

  • O_Deus September 4, 2007 at 12:35 pm

    I don’t know what Apple rhymes with but it certainly sounds a lot like monopoly. At least Microsoft isn’t making computers. Apple does. I prefer a software OS monopoly to a hardware and software monopoly which destroys clone makers to make sure there are no other options

  • O_Deus September 4, 2007 at 12:36 pm

    Steve Jobs only hopped on the Anti-DRM bandwagon when he saw which was the wind was blowing. iTunes added DRM to music even of companies that didn’t want it. iTunes music, even when supposedly DRM free, maintains track of users.

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