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NBC strongly opposed to Apple's 99 cent iTunes rental model - Page 3

post #81 of 88
Quote:
Originally Posted by Porchland View Post

That's a smart way to get a lot of TV without paying a lot of money, but too few people are doing that to move the needle.

That fact is the networks make as much money from cable retransmission fees as they do ad sales, and they're not going to worry much about people getting digital antennas and ditching their cable until a measurable number of people actually do that.

I totally agree.

At the same time, while it isn't a tital wave, there are a surprising number of geeks that have ditched cable. Free HD OTA + internet streaming services have made this cheaper option more and more viable.

Admittedly, I have a hard time imagining most people going through the trouble of switching to OTA TV. ATSC frequently requires an attic or roof-top antenna. That's enough of a hassle that some people wouldn't even consider switching. Ironically, it isn't much harder to install an antenna than it is to be patched into the cable network.
post #82 of 88
Well, well, well. This morning it was announced that Zucker is stepping down as CEO at NBC.
post #83 of 88
Quote:
Originally Posted by AppleInsider View Post

NBC Universal is unlikely join a pair of its peers in serving up a la carte TV show rentals to Apple TV users for 99 cents for pop through Apple's iTunes Store later this year, according to comments from the company's top executive.

"We do not think 99 cents is the right price point for our content," NBC Universal Chief Executive Jeff Zucker said on Wednesday at Goldman Sachs investor conference. "We thought it would devalue our content."

NBC currently offers iTunes customers the option of purchasing its shows outright for $1.99. But like the vast majority of networks that also distribute their content through the digital download service for the same price, it has balked at Apple's new 99 cent model announced earlier this month alongside the revamped Apple TV set-top box.

Thus far, only Walt Disney's ABC and News Corp's Fox have agreed to the price cut, though News Corp President Chase Carey similarly told investors at the same conference Wednesday that its participation in the matter is only a "short-term test."

For NBC and Zucker, this isn't the first time they've entered into a stalemate with Apple over digital download pricing on the iTunes Store. After accounting for roughly 40% of video downloads through the service in 2007, the network abruptly pulled its video library from iTunes after Apple wouldn't agree to a reported 100% increase in the wholesale price of each show.

During an October 2007 breakfast hosted by Syracuses Newhouse School of Communications, Zucker even went as far as to single out Apple for 'destroying' music pricing and urged his colleagues to take a stand against the company's iTunes Store, alleging that the service was undermining the ability of traditional media companies to set profitable rates for their content online.


NBC eventually caved to the popularity of the iTunes Store, signing back on with the service to sell its standard definition content for $1.99 an episode and HD content for $2.99 an episode less than a year later.

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"We do not think 99 cents is the right price point for our content," NBC Universal Chief Executive Jeff Zucker said on last Wednesday at Goldman Sachs investor conference. "We thought it would devalue our content." hmmnnn..

so on today's TV morning news shows didn't they all just mention that he (Mr. JEFF Zucker) was just sucker punc...hed and FIRED from NBC... i bet Steve Jobs is having a really good day today... lQQKS like his position was 'DEVALUED' to NO CENTS!!!!..ZUCKERRRRRRR OUT!! - ( i couldn't resist) hehehee
post #84 of 88
Can somebody help me out with this NBC-math?

$0.99 / episode viewing, Apple keeps 30%, NBC gets $0.69 / viewing.

Netflix = $8 / month. Netflix has many other sources, so they will pay <$8/month to NBC... but let's say that somehow $4/month of that goes to NBC (and if that's the model, it isn't sustainable!).

That means that NBC is expecting each viewer will watch less than (absolute, unimaginably best case scenario here) 5.5 episodes / month, on average. Given that they are producing new episodic content for about 5/12ths of the year, if we ignore any old content being consumed that means they think that each subscriber will follow 1.25 of their shows. And this is the valuation they have for their own content? Keeping in mind that I've assumed zero old content viewed, and an impossible Netflix business model... any changes there swing the balance sheet toward the Apple proposition.

Sounds to me like NBC is hugely devaluing NBC's content. What a bunch of idiots. Have they even consulted with their accountants?
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post #85 of 88
Quote:
Originally Posted by Programmer View Post

Can somebody help me out with this NBC-math?

$0.99 / episode viewing, Apple keeps 30%, NBC gets $0.69 / viewing.

Netflix = $8 / month. Netflix has many other sources, so they will pay <$8/month to NBC... but let's say that somehow $4/month of that goes to NBC (and if that's the model, it isn't sustainable!).

That means that NBC is expecting each viewer will watch less than (absolute, unimaginably best case scenario here) 5.5 episodes / month, on average. Given that they are producing new episodic content for about 5/12ths of the year, if we ignore any old content being consumed that means they think that each subscriber will follow 1.25 of their shows. And this is the valuation they have for their own content? Keeping in mind that I've assumed zero old content viewed, and an impossible Netflix business model... any changes there swing the balance sheet toward the Apple proposition.

Sounds to me like NBC is hugely devaluing NBC's content. What a bunch of idiots. Have they even consulted with their accountants?

1) You seem to be making up the revenue that NBC would get from each service, which makes your equations pointless as stated.

2) You are comparing two different services as if they identical and don't seem to even acknowledged how these could be looked upon differently due to how they work with owner's content or how they coul affect their other profit centers.
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post #86 of 88
Quote:
Originally Posted by Programmer View Post

Can somebody help me out with this NBC-math?

$0.99 / episode viewing, Apple keeps 30%, NBC gets $0.69 / viewing.

Netflix = $8 / month. Netflix has many other sources, so they will pay <$8/month to NBC... but let's say that somehow $4/month of that goes to NBC (and if that's the model, it isn't sustainable!).

That means that NBC is expecting each viewer will watch less than (absolute, unimaginably best case scenario here) 5.5 episodes / month, on average. Given that they are producing new episodic content for about 5/12ths of the year, if we ignore any old content being consumed that means they think that each subscriber will follow 1.25 of their shows. And this is the valuation they have for their own content? Keeping in mind that I've assumed zero old content viewed, and an impossible Netflix business model... any changes there swing the balance sheet toward the Apple proposition.

Sounds to me like NBC is hugely devaluing NBC's content. What a bunch of idiots. Have they even consulted with their accountants?

lol. I can't believe someone is arguing with this math. Of course it isn't precise. But it does show pretty clear bounds to the comparison.

Thus, it seems obvious to me that either NBC is deceiving themselves, or that they have a motivation other than just short-term profit. The latter seems more likely.

My bet is that they don't want Apple to gain control of video distribution like Apple did music distribution. They would likely be ceding away control if Apple were to have access to all of the content at a marketable price. The mindshare, technology, and expertise is already in place. All that Apple lacks is the content at a reasonable price. For some reason, NBC doesn't see Netflix as posing that same threat. From a business perspective, it is probably the right thing to do for NBC, but it sure does piss me off at the same time. If only they had a viable and streamlined system like apple, then they'd be happy to offer rentals at a reasonable price.

(Disclaimer: The above isn't meant to imply what is or is not a "reasonable price")
post #87 of 88
Quote:
Originally Posted by dfiler View Post

lol. I can't believe someone is arguing with this math. Of course it isn't precise. But it does show pretty clear bounds to the comparison.

It's not just the figures, it's the methodology and flaw in choosing to ignore all potential factors that may have results in not just, NBC, but pretty much all other networks, except for Disney's umbrella which Jobs is on the board and Murdoch's which wa quoted not good for them in the short run but he hoped it would get them favor in the future (General Reciprocity, I think that is called).

I could use his argument to say why would anyone spend $12 per person to see a movi in a theater when I can wait months an rent it on Redbox for a dollar and watchbit with many people and with cheaper and better snacks? If you can't see guys cant see how the same content can have very different dynamics an affects on markets depending on how they digested then I font know what to say except maybe take some Econ courses.

Quote:
My bet is that they don't want Apple to gain control of video distribution like Apple did music distribution. They would likely be ceding away control if Apple were to have access to all of the content at a marketable price. The mindshare, technology, and expertise is already in place. All that Apple lacks is the content at a reasonable price. For some reason, NBC doesn't see Netflix as posing that same threat. From a business perspective, it is probably the right thing to do for NBC, but it sure does piss me off at the same time. If only they had a viable and streamlined system like apple, then they'd be happy to offer rentals at a reasonable price.

If you are able to conceive of and formulate a possible argument as to why they wouldn't be interested how can previous comment seemingly indicate that it doesn't make any sense?
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post #88 of 88
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