Reports: Apple and NBC mending fences

[AppleInsider]

Apple Inc. and video content provider NBC Universal are working to bury the hatchet, according to reports, which suggest that it's only a matter of time before the network's catalog of television programming returns to the digital shelves of the iTunes Store.

In a post-Macworld keynote interview with BusinessWeek's Peter Burrows, Apple chief executive Steve Jobs discounted reports from mainstream media outlets that suggest the company's differences with NBC over iTunes pricing will evolve into a long-term stalemate that would also see the network unwilling to participate in the new iTunes Movie Rental service.

“Well, I guess your story looks pretty dumb,” Jobs told Burrows, referring to a BusinessWeek story earlier this month that suggested Apple would probably not be able to get Universal and Sony to support its new movie rental service, which it eventually did.

While Jobs agreed that those two studios weren’t the first to arrive at the bargaining table, he claims there were no great obstacles to overcome once they sat down, and that there was no pressure to get the deals inked ahead of last week's Macworld Expo.

“We’ll put it back together on the TV thing," Jobs added. "Everybody lost [when NBC Universal chief executive Jeff Zucker pulled his content off iTunes]. "But NBC is a great company, and Apple is a great company,” neither of which make a habit of ignoring their customers’ desires, he said.

“Fortunately,” Jobs half-joked, “there was a writers’ strike, so it didn’t matter as much as it might have.”

Tempers between the two firms flared last fall after NBC decided not to renew its iTunes distribution contract with Apple, arguing that the iPod maker was unreasonably opposed to experimenting with more flexible pricing structures for TV show downloads.

The dispute culminated in December when Zucker used a breakfast hosted by Syracuse’s Newhouse School of Communications to urge colleagues into taking a stand against iTunes, charging that the service was undermining the ability of traditional media companies to set profitable rates for their content online.

"We know that Apple has destroyed the music business -- in terms of pricing -- and if we don’t take control, they’ll do the same thing on the video side," he said.

But in speaking to the Financial Times this week, Zucker too appears to have had a sudden change of heart.

"We’ve said all along that we admire Apple, that we want to be in business with Apple," he said. “We’re great fans of Steve Jobs.”

[ View this article at AppleInsider.com ]

[e1618978]

Ha ha - what a loser zucker is. Steve should do the same thing he did to Disney, refuse to deal until the ass gets canned from NBC.

[Dave K.]

Yeah. Tell me that Zucker's ass isn't on the line with NBC.

[melgross]

As usual, business as usual.

[Mr.Scott]

Are you kidding me? Apple is looking after the customer the same time it's making a profit. NBC has always been the "black sheep" that nobody likes. Apple is a business and what do businesses do? Oh, that's right... make money and then in turn spend some of that money on a business model that actually works unlike NBC's. Sure people have choices but when nobody know of your services (NBC) why fight the fight when you can join a winning team! Apple rules and that's all there is to it...

Mr.Scott

[solipsism]

Originally Posted by e1618978

Steve should do the same thing he did to Disney, refuse to deal until the ass gets canned from NBC.

I thought it was Eisner that refused to work with Jobs, not the other way around.


If this were a Japanese company Zucker, or some other fall guy, would have stepped down so the company could save face. Usually I'm against such prescribed spectacles but in this case I think Zucker should definitely step down.

If they wanted to start their own service they should never have killed one revenue stream to do so. Especially sense one was ad-based that could be watch on a computer and the other was pay-based and could be watched on iDevices.

[e1618978]

Originally Posted by solipsism

I thought it was Eisner that refused to work with Jobs, not the other way around.

Nope -

http://en.wikipedia.org/wiki/Pixar#Disney_and_Pixar

"Bad blood between Steve Jobs and Disney Chairman and CEO Michael Eisner made the negotiations more difficult than they otherwise might have been. They broke down completely in mid-2004, with Jobs declaring that Pixar was actively seeking partners other than Disney. However, Pixar did not enter in negotiations with other distributors, since other partners saw Pixar's terms as too demanding. After a lengthy hiatus, negotiations between the two companies resumed following the departure of Eisner from Disney in September of 2005."

[solipsism]

Originally Posted by e1618978

Nope -
http://en.wikipedia.org/wiki/Pixar#Disney_and_Pixar

Thanks

[Dalí Debaser]

The bad blood was mostly because Eisner made some remarks about the iPod business on Capitol Hill that it was a model that promoted theft of music. Later Eisner said this of Jobs: "It's impossible to negotiate with Steve Jobs. Jobs is a Shiite Muslim"

[ascii]

Zucker sounds a tad paranoid to me. No one company is going to totally dominate video retail, ever. Is he intimidated by the Internet or something?

[vinea]

Originally Posted by AppleInsider

“Well, I guess your story looks pretty dumb,” Jobs told Burrows,

As FSJ might say - money quote.

[drummerjoe]

Hopefully we'll see NBC back soon. But more importantly, I want to know is when will I be able to rent tv shows on itunes/apple tv? I want on demand tv without a cable subscription and less than $2/episode.

[Kolchak]

Originally Posted by AppleInsider

The dispute culminated in December when Zucker used a breakfast hosted by Syracuse’s Newhouse School of Communications to urge colleagues into taking a stand against iTunes,

Minor correction: That's Syracuse University's Newhouse School of Public Communications. It's not some standalone school.

[melgross]

Originally Posted by Mr.Scott

Are you kidding me? Apple is looking after the customer the same time it's making a profit. NBC has always been the "black sheep" that nobody likes. Apple is a business and what do businesses do? Oh, that's right... make money and then in turn spend some of that money on a business model that actually works unlike NBC's. Sure people have choices but when nobody know of your services (NBC) why fight the fight when you can join a winning team! Apple rules and that's all there is to it...

Mr.Scott

It was ABC that was the black sheep. most years, NBC did fine.

[melgross]

Originally Posted by solipsism

I thought it was Eisner that refused to work with Jobs, not the other way around.

That's really a matter of interpretatin.

Jobs had his position, and wouldn't give in. Eisner refused to deal with tha.

It's a tough call. Right now, Disney is doing deals to Apple's disadvantage, even though Jobs is on the board as the largest stockholder.

If they wanted to start their own service they should never have killed one revenue stream to do so. Especially sense one was ad-based that could be watch on a computer and the other was pay-based and could be watched on iDevices.

There really wasn't much of a revenue stream. It might become one in the future, but right now, the sales and profits from it have been miniscule.

[melgross]

Originally Posted by Dalí Debaser

The bad blood was mostly because Eisner made some remarks about the iPod business on Capitol Hill that it was a model that promoted theft of music. Later Eisner said this of Jobs: "It's impossible to negotiate with Steve Jobs. Jobs is a Shiite Muslim"

Other than the Muslim reference, he is right. Jobs will stick to his position no matter how much it hurts his potential partners if he thinks he has the upper hand.

Only when he has no chioce whatsoever, will he give in.

We can see that with movie rentals. Obviously, that's not what he would have wanted, but he saw he had no choice.

[ros3ntan]

If you ask me.. NBC looks stupid now... especially when all the major tv company is in itunes.. plus, they spend millions on a streaming beta that would compete with itunes... in the end.. they just lost millions in that and in lost sales in the period where NBC pulled their shows from itunes...

I guess the only positive thing about this is NBC help the economy by spending money on unnecessary things

Great Job NBC

FYI, the best streaming tv website is FOX. the commercial is limited compared to other networks' limited commericals and it is stable compared to NBC, ABC, or CBS.. (NBC is the worst though, very unstable and annoying)

[Mr Underhill]

Well Zucker's got no option really as Apple ultimately created a platform out of a real need for change. iTunes in essence and appearance is a pro-consumer model others have to follow. So by attacking Apple he's effectively attacking the consumer. Apple have them all by the short-and-curlies right now.

If Zucker honestly believed he could get rival companies, who have a vested interest in shifting content, to join forces against Apple then the man is naive. iTunes is a one-off and i don't think even Apple could have imagined in their wildest dreams that a piece of software would wield so much power.

[melgross]

Originally Posted by ascii

Zucker sounds a tad paranoid to me. No one company is going to totally dominate video retail, ever. Is he intimidated by the Internet or something?

I wouldn't say that.

With itunes already having 93% of ALL internet movie sales, despite having almost no movies to sell, the situation seems clear. If they had thousands, rather than just a few hundred, they would sell them.

With Apple having the most popular portable video and music device around, and possibly several hundred million active iTunes accounts around the world, it's the first place these people will go for content.

The companies understand this very well. I don't blame them for wanting to break that model.

I know if I were in charge of a content company, I would want the same thing, and so would everyone here if they were in the same position.

The problem for them is that they're not sure WHAT to do about it. It's out of their control as to where the player business goes. If MS can't make the Zune a major competitor, then they lose there.

Their model of making their content available for free in different ways is their attempt to see if other methods will work. Maybe they will.

This will take years to play out.

But, as long as Apple plays along, as they are with movie rentals, they won't care as much.

They win, because it becomes simpler for them, and Apple wins for obvious reasons.

[ros3ntan]

Originally Posted by Mr.Scott

Are you kidding me? Apple is looking after the customer the same time it's making a profit. NBC has always been the "black sheep" that nobody likes. Apple is a business and what do businesses do? Oh, that's right... make money and then in turn spend some of that money on a business model that actually works unlike NBC's. Sure people have choices but when nobody know of your services (NBC) why fight the fight when you can join a winning team! Apple rules and that's all there is to it...

Mr.Scott

Just to note.. apple did not make a single cent on itunes content.. they are only focus on their products which is the ipods.

to be honest, there is some truth to what NBC is saying about how apple only wants to promote its ipod through itunes and minimize the studio's profit. NBC just went the wrong way by going public.

[ros3ntan]

Originally Posted by solipsism

I thought it was Eisner that refused to work with Jobs, not the other way around.


If this were a Japanese company Zucker, or some other fall guy, would have stepped down so the company could save face. Usually I'm against such prescribed spectacles but in this case I think Zucker should definitely step down.

If they wanted to start their own service they should never have killed one revenue stream to do so. Especially sense one was ad-based that could be watch on a computer and the other was pay-based and could be watched on iDevices.

To note, NBC is not making very much money, that was one of the catalyst to this stalemate.. NBC probably makes more money streaming with ad.

[Wally]

Originally Posted by melgross

Other than the Muslim reference, he is right. Jobs will stick to his position no matter how much it hurts his potential partners if he thinks he has the upper hand.

Only when he has no chioce whatsoever, will he give in.

We can see that with movie rentals. Obviously, that's not what he would have wanted, but he saw he had no choice.

So you sat in on the discussions?

[solipsism]

Originally Posted by ros3ntan

Just to note.. apple did not make a single cent on itunes content.. they are only focus on their products which is the ipods.

I don't believe that. From the start of the iTunes Store stated that is was just above breaking even. The prices have stated constant but bandwidth costs, hosting costs, and the slew of iTunes gift cards which keep the that 3% from coming out of Apple's pocket is all an additional gain.

Originally Posted by ros3ntan

To note, NBC is not making very much money, that was one of the catalyst to this stalemate.. NBC probably makes more money streaming with ad.

Originally Posted by melgross

There really wasn't much of a revenue stream. It might become one in the future, but right now, the sales and profits from it have been miniscule.

I don't buy this either. Are they losing revenue from another source because they offer their content on iTunes the day after a show aires? Are advertisers pulling out because Neilsen families are getting their constant from iTunes instead.I would wager that iTunes TV Shows biggest impact is subduing some piracy efforts due to it's convenience.

[solipsism]

Originally Posted by melgross

With itunes already having 93% of ALL internet movie sales, despite having almost no movies to sell, the situation seems clear. If they had thousands, rather than just a few hundred, they would sell them.

I've was wondering if iTunes movies internet sales percentage would not go up substantially (or even down) now that they have a larger library to sell because they also have the option to rent. I have purchased many movies from iTunes but that was because torrents would take too long and there was no rental model in place. Now that there is a rental model I can't imagine purchasing a movie again.

I've rented 5 in the past week.

[ros3ntan]

Originally Posted by solipsism

I don't believe that. From the start of the iTunes Store stated that is was just above breaking even. The prices have stated constant but bandwidth costs, hosting costs, and the slew of iTunes gift cards which keep the that 3% from coming out of Apple's pocket is all an additional gain.

All the hosting cost is being paid by the tv networks and every other major companies that wants their shows on itunes. the only thing Apple want is to provide itunes and Apple's name on those "TV products" (shows, movies..etc)

I talk to a professor who is teaching marketing for a university. He is very well connected in southern california. Obviously he is not in the meetings with apple. However, He talked to some of the professionals in the business who had dealing with apple about how Apple is making break even. meaning they are not profiting from the content of itunes. I never bought gift cards before, but if Apple charges for those gift cards, then maybe Apple is making some money.

However, if you think about the cost of making those gift cards, i'd say they are not making very much.

[Mr Underhill]

I'd also like to add that on Sunday i went into my local Comet via Curry's on Sunday and asked if they had any Apple TV's in stock. The reply: "Apple what?"

Whilst i'm excited by the iTunes Movie Rental service when it eventually lands here in the UK, Apple have their work cutout getting the big retailers up-to-speed. I'm still amazed how many people outside the Apple box have not even heard of the Apple Store, despite the success of the iPod.

[ros3ntan]

Originally Posted by solipsism

I've was wondering if iTunes movies internet sales percentage would not go up substantially (or even down) now that they have a larger library to sell because they also have the option to rent. I have purchased many movies from iTunes but that was because torrents would take too long and there was no rental model in place. Now that there is a rental model I can't imagine purchasing a movie again.

I've rented 5 in the past week.

I dont know much about renting movies.. but which one is cheaper? renting from netflix or itunes or blockbuster? or would you not consider anything else other than itunes?

btw, i think time warner is contemplating a quota for their internet business. Meaning they want to put a quota on consumers and every kilobyte we are over, they are going to charge something.. which i dont think it will do very well.. considering other companies will just take over their market share...

[ros3ntan]

Originally Posted by Mr Underhill

I'd also like to add that on Sunday i went into my local Comet via Curry's on Sunday and asked if they had any Apple TV's in stock. The reply: "Apple what?"

Whilst i'm excited by the iTunes Movie Rental service when it eventually lands here in the UK, Apple have their work cutout getting the big retailers up-to-speed. I'm still amazed how many people outside the Apple box have not even heard of the Apple Store, despite the success of the iPod.

Apple's brand name is huge in the US not in any other places (except Japan). thats why iphone is not selling very well in europe. the problem is Apple is a new company for international arena. id say give it time

[melgross]

Originally Posted by ros3ntan

Just to note.. apple did not make a single cent on itunes content.. they are only focus on their products which is the ipods.

to be honest, there is some truth to what NBC is saying about how apple only wants to promote its ipod through itunes and minimize the studio's profit. NBC just went the wrong way by going public.

It's estimated that Apple makes 5 cents per song. Jobs did say that they make a small profit.

[SpamSandwich]

Originally Posted by ros3ntan

Just to note.. apple did not make a single cent on itunes content.. they are only focus on their products which is the ipods.

to be honest, there is some truth to what NBC is saying about how apple only wants to promote its ipod through itunes and minimize the studio's profit. NBC just went the wrong way by going public.

Sorry, but you're wrong on that. Apple does make a slim margin, but they don't do it for free. Music and movies are a commodity business and the more they sell, the more margin they make.

[SpamSandwich]

Originally Posted by solipsism

I've was wondering if iTunes movies internet sales percentage would not go up substantially (or even down) now that they have a larger library to sell because they also have the option to rent. I have purchased many movies from iTunes but that was because torrents would take too long and there was no rental model in place. Now that there is a rental model I can't imagine purchasing a movie again.

I've rented 5 in the past week.

Have you considered NetFlix? I find it a superior service. Cheaper, way more variety, although not in the immediate gratification business unless your movie is one of the "Watch Immediately" streaming varieties... on Windows XP...

[aresee]

Originally Posted by solipsism

I don't buy this either. Are they losing revenue from another source because they offer their content on iTunes the day after a show aires? Are advertisers pulling out because Neilsen families are getting their constant from iTunes instead.I would wager that iTunes TV Shows biggest impact is subduing some piracy efforts due to it's convenience.

I feel that iTunes has actually increased viewership of television show by allowing the viewer to go back and catch up on missed episodes. Lost comes to mind. It was on for a couple of months before the buzz caught up to it. But being a serial most people were confused when entering it mid-story. ITunes allowed the viewers to catch up and probably had a great deal with turning it into a hit.

[ros3ntan]

Originally Posted by melgross

It's estimated that Apple makes 5 cents per song. Jobs did say that they make a small profit.

Originally Posted by SpamSandwich

Sorry, but you're wrong on that. Apple does make a slim margin, but they don't do it for free. Music and movies are a commodity business and the more they sell, the more margin they make.

ok thanks, i wasnt aware of that. i need to update the professor on that. Maybe he has some more insight.

[solipsism]

Originally Posted by ros3ntan

I dont know much about renting movies.. but which one is cheaper? renting from netflix or itunes or blockbuster? or would you not consider anything else other than itunes?

My Blockbuster charges the same for rentals as iTunes, minus the sales tax. Netflix is cheaper per month for moderate to heavy users but that isn't the only factor to consider. They have a great selection but good ol' American instant gratification just doesn't work with a mailed service. The iTunes model model will compete with cable company on-demand services first, Netflix last and brick-and-mortar stores somewhere in the middle and have the added bonus of being ported to iDevices. They each have there pros and cons but history has shown us that convenience tends rule when given a choice.

[solipsism]

Originally Posted by SpamSandwich

Have you considered NetFlix? I find it a superior service. Cheaper, way more variety, although not in the immediate gratification business unless your movie is one of the "Watch Immediately" streaming varieties... on Windows XP...

I use it for TV show series that I can't get elsewhere. I may be canceling it soon as I just finished with Little Britain which leaves me with nothing else to consider renting. It has nothing to do with the iTunes movie rentals, just a coincidence.

[melgross]

Originally Posted by Wally

So you sat in on the discussions?

Funny!

I don't have to. It's been pretty well documented by people who do sit in and have said so interviews. The NYTimes, WSJ, and other journals have had articles about Apple's negotiations ovr the years.

We can also see by the complaints of what Apple demands from others. The frustration involved.

This isn't guessing.

[melgross]

Originally Posted by solipsism

I don't believe that. From the start of the iTunes Store stated that is was just above breaking even. The prices have stated constant but bandwidth costs, hosting costs, and the slew of iTunes gift cards which keep the that 3% from coming out of Apple's pocket is all an additional gain.


I don't buy this either. Are they losing revenue from another source because they offer their content on iTunes the day after a show aires? Are advertisers pulling out because Neilsen families are getting their constant from iTunes instead.I would wager that iTunes TV Shows biggest impact is subduing some piracy efforts due to it's convenience.

I'm talking numbers. If you look at all the Tv shows Apple has so far sold, and figure that NBC's portion is maybe 20%, you'll see that it isn't much. Apple probably takes about half, for expenses, and their own small profits. That gives NBC, since Apple started selling Tv shows, what, $25 million? That amounts to how much profit? What percentage of NBC's business it that? Very little.

[melgross]

Originally Posted by solipsism

I've was wondering if iTunes movies internet sales percentage would not go up substantially (or even down) now that they have a larger library to sell because they also have the option to rent. I have purchased many movies from iTunes but that was because torrents would take too long and there was no rental model in place. Now that there is a rental model I can't imagine purchasing a movie again.

I've rented 5 in the past week.

As far as I know, most of the movies for rent are not for sale. At least, not yet.

[elroth]

Originally Posted by melgross

Right now, Disney is doing deals to Apple's disadvantage, even though Jobs is on the board as the largest stockholder.

Disney is doing deals to Disney's advantage - there should be no consideration (by Jobs or anyone else at Disney) of whether Disney's deals benefit Apple or not.

[elroth]

Originally Posted by melgross

Funny!

I don't have to. It's been pretty well documented by people who do sit in and have said so interviews. The NYTimes, WSJ, and other journals have had articles about Apple's negotiations ovr the years.

We can also see by the complaints of what Apple demands from others. The frustration involved.

This isn't guessing.

And yet, those same people stated emphatically that Sony and Universal would never be a part of Apple's rental movie service. It is guessing. Don't believe everything you read in the papers.