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NBC may not renew iTunes contract with Apple - report - Page 2

post #41 of 82
Quote:
Originally Posted by minderbinder View Post

As for selling content, they could sell downloadable shows, but I doubt they'd sell ones with a copy protection system compatible with iTunes. And if they charge $4.99 per TV episode, their sales will plummet.

Agreed. I don't think that hulu videos will be playable on an iPod. My guess is the $4.99 is for commercial-free, downloadable episodes. Watching online commercial-embedded, standard-def videos will probably be free.

Just a hunch.
post #42 of 82
Quote:
Originally Posted by minderbinder View Post

No, they're starting their own service because they don't realize how much they need Apple. Tons of companies have started their own competing services, have any been remotely successful. And they'll realize it once their service is running and nobody is using it...and they end up shutting it down before long.

NBC can't win, apple has all the leverage.

Just look at it this way:
1 NBC goes on their own
2 NBC has to tell stockholders that profits are down
3 Stockholders: "Why?"
4 NBC: "iTunes revenues are gone and hulu revenues come nowhere close to replacing that lost revenue"
5 Stockholders tear NBC a new one
6 NBC goes groveling back to apple and signs with itunes again

I hope it goes that way. Then again, if NBC somehow pulls through and succeeds Apple could be in a whole lot of trouble.
post #43 of 82
Way to go, NBC/Universal. First, I can't buy your content on the industry-leading Blu-Ray high def format, and now I can't buy it on iTunes!

It's like you're actually trying to limit the market for your content, which sounds like a winning strategy! I'd say you owe a big bonus of bananas to whichever chimp is running the show over there!
post #44 of 82
"Hula"? Hmm good luck with that. It probably won't completely suck.
post #45 of 82
Quote:
Originally Posted by BenRoethig View Post

I hope it goes that way. Then again, if NBC somehow pulls through and succeeds Apple could be in a whole lot of trouble.

Yeah, they could become 'beleaguered"

Will it cost them iPod or Mac sales? I think not.
post #46 of 82
Quote:
Originally Posted by SpamSandwich View Post

Not so sure about that. NBC just has to sell ads to support "Hulu" and they are already good at selling ads on TV. I wouldn't doubt that they'll be smarter about offering content for sale, and that content could easily be moved into iTunes once purchased... and they get all the profits, and absorb all of the costs to do this.

But they'll need traffic to sell adds. It's a tough business to break into at this point.
post #47 of 82
Quote:
Originally Posted by BenRoethig View Post

I hope it goes that way. Then again, if NBC somehow pulls through and succeeds Apple could be in a whole lot of trouble.

Anything is possible. But I think the odds are against NBC.

Are most current itunes/nbc consumers going to accept a big price hike?
Will they accept commercials?
Will they accept something that isn't compatible with itunes or ipod, or isn't downloadable?

And if the answer to these is no, are they going to download pirate copies or just stop watching that show?

I just don't think NBC has much if anything to their advantage, especially since so many others have tried to compete with itunes and failed.
post #48 of 82
Apple confirms there will be no NBC

Big loss for AppleTV, what a joke. Now if AppleTV just had an onboard HDTV tuner, we could "download" the NBC shows for free.
post #49 of 82
Quote:
Originally Posted by anantksundaram View Post

All of this sounds like pre-negotiation noise......

NBC needs Apple as much, if not more, than the other way around. It is a close-to-last-place major network that is seeking traction. The parent company GE is watching closely for any missteps. If they dump a major distribution channel that offers it a future growth opportunity, I am sure that Mr. Immelt will have a word or two for NBC's leadership.

That said, I don't see why NBC shouldn't have greater say over bundling or repricing its content. The iTunes store has become an incoherent clutter anyway (compared to its original simplicity and elegance), and it is not clear to me that adding things such as bundling (or even differential pricing) will add much to the mess that it has already become. Just add two extra icons/links to the millions already there: "Bundles" and "Not $1.99." No one will notice.

The article in the Times today says just the opposite. Apple needs them more. NBC's sales over iTunes is not important to them yet, while Apple's entire strategy depends on it.

Like it or not, Jobs is going to have to learn to cooperate more. Right now, he's got a case of Hubris. Just because it's worked in the past doesn't mean that it will continue to work.
post #50 of 82
The first "Universal" is spelled incorrectly, as "Universa."

-=|Mgkwho
post #51 of 82
Quote:
Originally Posted by backtomac View Post

I don't understand the NBCs position on this. It seems to me that they are negotiating from a position of weakness. I can hear SJ talking to the NBC guys now; "there's this thing called BitTorrent. Have you heard of it?'

iPods will sell. NBC and the other studios can get on iTunes and make some money off the iPod train or they can get steamrolled by it.

I wonder if the NBC guys heard of the Sony Connect Store?

Nope! The other way around.

Tv sales are very small right now. They hardly count to the media companies.

Don't forget that, so far, Apple has managed to get only a small fraction of Tv shows, and an even tinier fraction of movies.

Those companies are moving very slowly. They don't want to be in the bind others are in with music.

Tv shows and movies are finding other outlets over the net right now. Apple could be bypassed entirely if they aren't careful.
post #52 of 82
Quote:
Originally Posted by minderbinder View Post

No, they're starting their own service because they don't realize how much they need Apple. Tons of companies have started their own competing services, have any been remotely successful. And they'll realize it once their service is running and nobody is using it...and they end up shutting it down before long.

NBC can't win, apple has all the leverage.

Just look at it this way:
1 NBC goes on their own
2 NBC has to tell stockholders that profits are down
3 Stockholders: "Why?"
4 NBC: "iTunes revenues are gone and hulu revenues come nowhere close to replacing that lost revenue"
5 Stockholders tear NBC a new one
6 NBC goes groveling back to apple and signs with itunes again

Not true at all. That is a fanboy perception. None of the Tv or movie companies are selling enough over iTunes to make even the slightest dent in their sales.

The reason why Apple has been so unsuccessful in getting movies, and to a lessor extent Tv shows, is because companies are sitting back to see what will happen.

None of them, including Disney, wants Apple to have control over their distribution or profits.
post #53 of 82
Quote:
Originally Posted by minderbinder View Post

So if ONE network leaves, they won't have ANY content to sell? I guess you missed the tons of other shows available on iTunes? NBC would only make a dent if they got all the other networks to join them and negociate together. Leaving on their own will just increase piracy of their material and decrease the number of people watching their shows.

And NBC has had many of the lowest ranked shows for the last couple years, with a couple exceptions like Heroes, their ratings have been awful. With a lineup as bad as theirs, will people miss them much?

According to the Times today, Universal has 4-% of the video content sales on iTunes.

If they pull this off, then others will do the same thing. The article said that the other companies are eyeing this carefully.

We may see an agreement though. Apple might give in to a certain extent, and both will make up.
post #54 of 82
Quote:
Originally Posted by melgross View Post

The article in the Times today says just the opposite. Apple needs them more. NBC's sales over iTunes is not important to them yet, while Apple's entire strategy depends on it.

Like it or not, Jobs is going to have to learn to cooperate more. Right now, he's got a case of Hubris. Just because it's worked in the past doesn't mean that it will continue to work.

That's the NYT's opinion. The way NBC has been doing, it should be important to them.

In this particular case, NBC wanted episodes at $4.99 each. Do you think Jobs should have cooperated by giving in to that? Right now, apple is looking like the good guy and NBC the greedy ones with the hubris.
post #55 of 82
Well, Apple has called NBC's bluff (?) and announced that it is canceling NBC's shows starting in September, so customers won't have to stop watching a show on their iPod in mid-season:

http://playlistmag.com/news/2007/08/...snbc/index.php

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post #56 of 82
Quote:
Originally Posted by minderbinder View Post

That's the NYT's opinion. The way NBC has been doing, it should be important to them.

In this particular case, NBC wanted episodes at $4.99 each. Do you think Jobs should have cooperated by giving in to that? Right now, apple is looking like the good guy and NBC the greedy ones with the hubris.

That's what you would like to think. I'm pretty sure that the Times has much better sources than any of us here.
post #57 of 82
Quote:
Originally Posted by melgross View Post

Not true at all. That is a fanboy perception. None of the Tv or movie companies are selling enough over iTunes to make even the slightest dent in their sales.

If it's insignificant, then why did NBC credit iTunes with saving The Office, which otherwise would have been cancelled due to low ratings? I guess Angela Bromstead, president of NBC Universal Television Studio, is a "fanboy"?

And why do you consider apple unsuccessful at getting tv content? They have a large number of shows including many of the top rated ones like CSI, Grey's, Housewives, Lost, 24, etc. Who has been more successful at making money on TV content online than apple/itunes?

And while NBC pulling this off could inspire others to follow, NBC doing this and failing could inspire others to stick with iTunes.

Quote:
Originally Posted by melgross View Post

That's what you would like to think. I'm pretty sure that the Times has much better sources than any of us here.

The NYT has been wrong before and will be wrong again. You didn't answer my question - if you were Jobs and NBC demanded $4.99 an episode, would you give in to that?
post #58 of 82
Quote:
Originally Posted by Dave Marsh View Post

Well, Apple has called NBC's bluff (?) and announced that it is canceling NBC's shows starting in September, so customers won't have to stop watching a show on their iPod in mid-season:

http://playlistmag.com/news/2007/08/...snbc/index.php

Awesome, in one fell swoop Apple turned the situation around. NBC is now the bad guy, and all they other networks know that Apple will dump them if they don't play ball (if they can afford to dump NBC, which is 30% of the TV downloads, then they can dump anybody).
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post #59 of 82
Quote:
Originally Posted by minderbinder View Post

That's the NYT's opinion. The way NBC has been doing, it should be important to them.

In this particular case, NBC wanted episodes at $4.99 each. Do you think Jobs should have cooperated by giving in to that? Right now, apple is looking like the good guy and NBC the greedy ones with the hubris.

I wish that you would take your uninformed opinion and relate it to some facts. I have far more regard for what the Times, and the WSJ says. Nothing personal, but you are doing no more than hopefully guessing that Apple will have its way.

Jobs has shown NO nterest in compromising at all, as you well know.

Those numbers are very likely just a starting negotiation point. Jobs starts at $1.99 and they start at $4.99. That's the way it works.

I'm not saying that higher prices are good, but you can't totally dictate what you content providers should get. They have to have a say in it.

If prices went up, and sales went down, then that would be information they would need to consider.

But, it's more than that. There is the bundling, and security issuse brought up.

Again, they have to be negotiated.

I can see Universal giving its requirements across the table, and Jobs sitting with his arms crossed, saying "I don't care".
post #60 of 82
Quote:
Originally Posted by melgross View Post

Nope! The other way around.

Tv sales are very small right now. They hardly count to the media companies.

Don't forget that, so far, Apple has managed to get only a small fraction of Tv shows, and an even tinier fraction of movies.

Those companies are moving very slowly. They don't want to be in the bind others are in with music.

Tv shows and movies are finding other outlets over the net right now. Apple could be bypassed entirely if they aren't careful.

We will see who's got stronger hand in time.

BitTorrent and 100 million iPods say Apple have the stronger hand.

ITunes isn't a major profit center for Apple. It only helps to drive iPod sales.

It makes September 5th a little more interesting IMO. If Apple release nice video iPods I think that only increases the pressure on NBC.
post #61 of 82
Quote:
Originally Posted by minderbinder View Post

If it's insignificant, then why did NBC credit iTunes with saving The Office, which otherwise would have been cancelled due to low ratings? I guess Angela Bromstead, president of NBC Universal Television Studio, is a "fanboy"?

Because that was when selling Tv shows over iTunes was new, and exciting. Apple sold thousands of them. But, that's not very much, by itself. As internet sales become more common, that kind of thing will lesson, as it always does.

{quote}
And why do you consider apple unsuccessful at getting tv content? They have a large number of shows including many of the top rated ones like CSI, Grey's, Housewives, Lost, 24, etc. Who has been more successful at making money on TV content online than apple/itunes?[/quote]

The estimate is that Apple has but a fraction of the Tv shows that are offered on DVD, and a much smaller fraction of shows produced from the cable networks.

Quote:
And while NBC pulling this off could inspire others to follow, NBC doing this and failing could inspire others to stick with iTunes.

Thre is no such thing as a sure thing, of course. But, sales of Tv shows are very small, not enough to affect any companies bottom line.

The fight isn't over what is available now, but what will be available in the future, and that is very much in doubt.

They want to get these issues straightened out before sales do rise much. They don't want to be in the situation they are in with music sales, where itunes forced the companies to offer their songs for %99 to everyone. It would become a defacto pricing scheme.

Quote:
The NYT has been wrong before and will be wrong again. You didn't answer my question - if you were Jobs and NBC demanded $4.99 an episode, would you give in to that?

Of course, they are wrong sometimes, but not about these kinds of things. and what is your recoed here?

I would negotiate. That's what I did with my businesses.
post #62 of 82
Quote:
Originally Posted by e1618978 View Post

Awesome, in one fell swoop Apple turned the situation around. NBC is now the bad guy, and all they other networks know that Apple will dump them if they don't play ball (if they can afford to dump NBC, which is 30% of the TV downloads, then they can dump anybody).

The problem with this war of words is that all of these companies have other ways of getting content online.

Apple has no way of getting that content EXCEPT from them.
post #63 of 82
Quote:
Originally Posted by melgross View Post

I wish that you would take your uninformed opinion and relate it to some facts. I have far more regard for what the Times, and the WSJ says. Nothing personal, but you are doing no more than hopefully guessing that Apple will have its way.

Jobs has shown NO nterest in compromising at all, as you well know.

Those numbers are very likely just a starting negotiation point. Jobs starts at $1.99 and they start at $4.99. That's the way it works.

I'm not saying that higher prices are good, but you can't totally dictate what you content providers should get. They have to have a say in it.

If prices went up, and sales went down, then that would be information they would need to consider.

But, it's more than that. There is the bundling, and security issuse brought up.

Again, they have to be negotiated.

I can see Universal giving its requirements across the table, and Jobs sitting with his arms crossed, saying "I don't care".

Perhaps it is Apple "fanboism". Or perhaps it's perhaps it's good old fashioned self interest that makes me side with Apple on this one.

Let me see if I got this straight.
1) The studios want to increase the prices to $4.99
2) They want to bundle episodes, perhaps forcing me to buy episodes I don't want or need.
3) They want to increase the DRM.

Why would you be on NBCs side on this? Nothing they want benefits consumers. Am I missing something?
post #64 of 82
Quote:
Originally Posted by melgross View Post

The problem with this war of words is that all of these companies have other ways of getting content online.

Apple has no way of getting that content EXCEPT from them.

If the content producers dump Apple, then we are back to a "Rip, Mix, Burn" type situation, where Apple adds in a lot of convenience features to iTunes (like drag and drop of all the various bittorrented video formats into iTunes, which would have a built in converter to turn them into mp4s).
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post #65 of 82
DVD of Heroes Season, retail price $47.98
iTunes Season Pass, 23 epasodes $42.99
Download price @ $4.99/epasode $114.77

I don't think that this will fly for NBC, even if they were to offer 1080p files without commercials at that price it is still double the cost of a full season DVD.
post #66 of 82
What if every major studio pulled it's content from iTunes Store? How could Apple possibly increase iPod sales if content wasn't easily accessible via the the iTunes Store?

One possibility is to include a TV Tuner in the AppleTV (and even the Mac line) that uses a H.264 encoder chip to create iPod/iPhone compatible videos in realtime.This would be the DVR that people have been so desperately wanting from Apple, but Apple would still maintain it's monopoly and help prop up its 4th-leg "hobby" the AppleTV with DVR finctionality

I really don't think this will happen has NBC will see that it's other options are going to fail and no one is going to pay $5 for a TV episode. Hell, the only reason people pay $2 is for the convenience.
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post #67 of 82
Mel, you really are speculating "I can see Jobs sitting with his arms crossed......" just as much as anyone else.
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post #68 of 82
Quote:
Originally Posted by melgross View Post

The problem with this war of words is that all of these companies have other ways of getting content online.

Apple has no way of getting that content EXCEPT from them.

Well, except Disney (ABC, ESPN, etc.) I would think.

Opening to discussion: Is "online" the end result? Is that good enough to be successful? Others have tried with music and failed with the same content as the iTMS (and Wal-Mart with better pricing). Why did they fail (and regroup and, perhaps, fail again)?

Not that any can answer this but does having ABC.com stream its shows with commercials hurt iTMS sales of those shows?

I'm trying to understand why NBC thinks it can do better with hulu or charge more with iTunes. It's like pulling your merchandise from Target and selling it from a shack at the side of the road.

post #69 of 82
Quote:
Originally Posted by britwithgoodteeth View Post

The iTMS isn't going to be steamrolling anything without any content to sell.

It's amazing how some people just don't get it. "Content", as it has been seen, means bugger all. Those who own content will sell to anyone who wants content. That's the only way it's ever been. Distributors have always had the power. Until recently, the distributors have been the networks (for TV, the music labels for music).

They have never really created "content", they've just bought it. They had an exclusive ability to distribute, and they abused that ability to screw the real producers of content, and the consumers.

Now, the model of distribution is changing. The content producers will still be there, and so will the consumers. Narrow-minded media executives failed to see the opportunity provided by the internet, they saw it as a threat. They, and their shareholders, are now going to pay the price.

Others, such as Google and Apple, saw the opportunity, and will reap the rewards. That much of the game is already played. There is nothing they can do to reverse the trend, whether we, they, or anyone else likes it.

There is still a great deal to be won or lost, who knows who will come out top. But one thing is for sure, the longer 20th century companies use 20th century methods to achieve 20th century goals, the sooner they will find themselves back in the stone ages...
post #70 of 82
Quote:
Originally Posted by cutemartin View Post

It's amazing how some people just don't get it. "Content", as it has been seen, means bugger all. Those who own content will sell to anyone who wants content. That's the only way it's ever been. Distributors have always had the power. Until recently, the distributors have been the networks (for TV, the music labels for music).

They have never really created "content", they've just bought it. They had an exclusive ability to distribute, and they abused that ability to screw the real producers of content, and the consumers.

Now, the model of distribution is changing. The content producers will still be there, and so will the consumers. Narrow-minded media executives failed to see the opportunity provided by the internet, they saw it as a threat. They, and their shareholders, are now going to pay the price.

Others, such as Google and Apple, saw the opportunity, and will reap the rewards. That much of the game is already played. There is nothing they can do to reverse the trend, whether we, they, or anyone else likes it.

There is still a great deal to be won or lost, who knows who will come out top. But one thing is for sure, the longer 20th century companies use 20th century methods to achieve 20th century goals, the sooner they will find themselves back in the stone ages...


Look, you may well be right, i do share some of your feelings. But NBC and other broadcasters have a big problem and no-one seems to know what the answer is.

NBC do not make any money from iTunes sales, certainly not enough to even be a significant revenue stream to the business. They probably make more money selling West Wing merchandise!! NBC need the advertisers, there business would collapse without them. There is not a market yet for revenue for downloaded shows to replace advertising revenue and i doubt there ever will be. The advertisers do not want to see more and more viewers switch to other means of watching shows, they will walk away from broadcast TV altogether if more content is viewed this way. This will kill NBC, they are under far too much pressure to not let this happen.

The future of internet broadcasting will include the advertisers, it will be sites like iTunes that make shows available for download free of charge but with advertising cut into the video files. iTunes may well have a place however, i still feel there is a market for a premium ad-free product but NBC will need to get the model right for them before anything like iTunes is seriously considered.
post #71 of 82
Quote:
Originally Posted by melgross View Post


Those companies are moving very slowly. They don't want to be in the bind others are in with music.
.

It's precisely because they're moving so slow that they are getting themselves into exactly the same position as the music industry. They have spent so long now failing to keep up with the game that they've already lost.

It is no longer a question of whether Apple will come out on top of the music/TV industry (as was), it is now a question of whether Apple or Google or Amazon or another party new to the game comes out on top.

The traditional powers have missed the boat and they're so busy trying to fight yesterday's game they can't even perceive tomorrow's. FFS they're still trying to impose DRM, bundling etc....!

The days of companies controlling both content and distribution are over. For better or for worse. The sooner the media industry accept this, the better their chances of survival.
post #72 of 82
Whoever said that NBC might change its mind after seeing the new 6G iPod video is probably close to the truth. Considering that with the (likely) fullscreen display, videos will become much clearer to view; this will actually increase video sales through the iTunes Music Store.

NBC Universal's arrogance is going to come back to bite them in the *** for lots of obvious reasons, even if NBC Universal signs a deal to offer downloadable TV episodes for future versions of the Microsoft Zune player.
post #73 of 82
Quote:
Originally Posted by backtomac View Post

Perhaps it is Apple "fanboism". Or perhaps it's perhaps it's good old fashioned self interest that makes me side with Apple on this one.

Let me see if I got this straight.
1) The studios want to increase the prices to $4.99
2) They want to bundle episodes, perhaps forcing me to buy episodes I don't want or need.
3) They want to increase the DRM.

Why would you be on NBCs side on this? Nothing they want benefits consumers. Am I missing something?

I'm not on anyone's side.

What I'm saying here is that Apple does not have the power in this relationship. Some here seem to think they have(or simply want to believe it), but they don't.

I'm saying that everyone has a negotiating position. That's where one begins.

Where it ends up is not known until it ends.

The problem is that if Apple holds fast, and there is a mass withdrawal of media from itunes, then Apple is the one stuck.

While those companies can offer their content elsewhere, Apple can only obtain it from them.

You might have noticed that Universal is already testing DRM-free music, but not with Apple. We don't know how that will go. But, we can't assume it to be a flop.

I'm just saying that Apple should go to the table with a real intent to compromise.

If they do, and prices rise, then we will see what happens. If sales drop too much, then the companies will realize that they made a mistake. If they don't drop too much, but they are making bigger profits, then they will have been right.

I've never bought more than just few compressed songs or video's, so I'm not a typical user, and I know that. But, even so, I don't want prices to rise any more than they really must. however, the market will tell everyone what to do.

My thoughts are that perhaps Apple should give them some of what they want, and then come back to the table once things get sorted out. At that time, they can evaluate everything, and see what should be done next.
post #74 of 82
Quote:
Originally Posted by e1618978 View Post

If the content producers dump Apple, then we are back to a "Rip, Mix, Burn" type situation, where Apple adds in a lot of convenience features to iTunes (like drag and drop of all the various bittorrented video formats into iTunes, which would have a built in converter to turn them into mp4s).

s most stuff is that now, it won't mke much of a difference.

But, i'd like to see songs stay at either $99 or $1.29, videos at $1.99, and movies at $9.99, but it may not be possible.

There is absolutely no way that Apple would do that. Apple is not in the illegal download business, and they will never be in it. That's just an absurd idea.
post #75 of 82
Quote:
Originally Posted by Flounder View Post

Mel, you really are speculating "I can see Jobs sitting with his arms crossed......" just as much as anyone else.

Well, maybe he doesn't have his arms crossed. Maybe he's picking his nose.

The point is that he's at least thumbing his nose at them.

I'm not siding with the content producers as far as their current asking pricing goes. But, they do have a right to demand that Apple at least sit down at the table with them in good faith. That doesn't seem to be happening
post #76 of 82
Quote:
Originally Posted by scottiB View Post

Well, except Disney (ABC, ESPN, etc.) I would think.

Opening to discussion: Is "online" the end result? Is that good enough to be successful? Others have tried with music and failed with the same content as the iTMS (and Wal-Mart with better pricing). Why did they fail (and regroup and, perhaps, fail again)?

Not that any can answer this but does having ABC.com stream its shows with commercials hurt iTMS sales of those shows?

I'm trying to understand why NBC thinks it can do better with hulu or charge more with iTunes. It's like pulling your merchandise from Target and selling it from a shack at the side of the road.


We all know about Disney, but what isn't appreciated here is that even Disney doesn't offer all of its products on iTunes, just part of it.

And do you seriously think that ITunes can survive with just part of the Disney catalog?

Right now, Apple doesn't have much more than about 400 movies, last I checked, though it could be a bit more now.

There are many thousands of movies out there. so far, the studios that haven't offered their content on iTunes don't seem to be hurt. They are all waiting.

There is no doubt that streaming shows with commercials does hurt iTunes. As people are downloading those shows, they are not buying them from Apple.

We don't know, streaming with commercials may indeed be the future. Or perhaps streaming for a small fee for a single use, like pay Tv (though for less).

It's been said that in the future, music will be free, and concerts will be the way artists make their money. That could be true.

What then for iTunes?
post #77 of 82
Quote:
Originally Posted by cutemartin View Post

It's precisely because they're moving so slow that they are getting themselves into exactly the same position as the music industry. They have spent so long now failing to keep up with the game that they've already lost.

It is no longer a question of whether Apple will come out on top of the music/TV industry (as was), it is now a question of whether Apple or Google or Amazon or another party new to the game comes out on top.

The traditional powers have missed the boat and they're so busy trying to fight yesterday's game they can't even perceive tomorrow's. FFS they're still trying to impose DRM, bundling etc....!

The days of companies controlling both content and distribution are over. For better or for worse. The sooner the media industry accept this, the better their chances of survival.

Every company has the right to choose the method of distribution.

As far as pricing goes, they have that right as well.

We have the right to not buy their product.

It's a matter of balance. Everyone who has taken economics 101 knows that there is a sweet spot for sales and prices. Raise prices and sales go down. But, profits go up. Keep raising prices, and at some point you hit that sweet spot, where profits are the highest.

Keep raising prices, and sales will go down faster than profit goes up, and total profits begin to go down again.

It's the old Gaussian curve.

That's the game being played now. Apple argues that current pricing is the sweet spot, and the content companies say it's at a higher point on the curve.

Often, the only way to find out is to do it.

I say: Let 'em".

If it fails, they can always go back.
post #78 of 82
Let's not forget the reason the iTunes store succeeded where others failed. The iTunes store didn't have to be profitable to succeed at first. It could rely on iPod sales to fund it. Other online stores didn't have this revenue stream. If prices rise enough for other online stores to operate in the black, the iTunes store loses that edge. The question remaining is whether the iTunes store is now entrenched enough with enough features to keep its customer base.

Apple will lose its edge if prices rise enough to allow other stores to survive to compete against it. What incentive does Apple have to permit that to occur without a fight?

- Dave Marsh
iMac Intel 27" 3.4GHz, iPad Air 64GB, iPhone 5 32GB

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- Dave Marsh
iMac Intel 27" 3.4GHz, iPad Air 64GB, iPhone 5 32GB

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post #79 of 82
Quote:
Originally Posted by melgross View Post

I'm not on anyone's side.

What I'm saying here is that Apple does not have the power in this relationship. Some here seem to think they have(or simply want to believe it), but they don't.

I'm saying that everyone has a negotiating position. That's where one begins.

Where it ends up is not known until it ends.

The problem is that if Apple holds fast, and there is a mass withdrawal of media from itunes, then Apple is the one stuck.

While those companies can offer their content elsewhere, Apple can only obtain it from them.

You might have noticed that Universal is already testing DRM-free music, but not with Apple. We don't know how that will go. But, we can't assume it to be a flop.

I'm just saying that Apple should go to the table with a real intent to compromise.

If they do, and prices rise, then we will see what happens. If sales drop too much, then the companies will realize that they made a mistake. If they don't drop too much, but they are making bigger profits, then they will have been right.

I've never bought more than just few compressed songs or video's, so I'm not a typical user, and I know that. But, even so, I don't want prices to rise any more than they really must. however, the market will tell everyone what to do.

My thoughts are that perhaps Apple should give them some of what they want, and then come back to the table once things get sorted out. At that time, they can evaluate everything, and see what should be done next.

Fair enough. You make some nice points.

I still feel Apple have a fairly strong hand in this as they have the iPod installed base. As well BitTorrent is the 800 lb gorilla no one is talking about. If the studios overplay their hand they could just push users right into the hands of p2p.
post #80 of 82
Quote:
Originally Posted by melgross View Post


You might have noticed that Universal is already testing DRM-free music, but not with Apple. We don't know how that will go. But, we can't assume it to be a flop.

Melgross, you make a good point. Universal is already testing DRM-free music, but not with Apple. And you know what, I bet Apple doesn't care. Why? Because it's DRM free, so it plays on the iPod! It's a victory for Apple when ANY company decides to experiment with something thats DRM free. Even if it is in a format that doesn't natively play on the iPod (say WMV, or WMA), with it being DRM free, it can be converted (even in iTunes) and played on Apple hardware.

The problem for distribution companies is that the market is saturated with iPods at the moment. Now the iPhone is coming on the market as a product that also plays music and videos. No matter how much they try, they cannot just decide to stop distributing their content and ignoring an entire segment of the market. It would be like deciding to restrict broadcast their programming to only one brand of television. They already tried this with all that Windows Media DRM garbage. How successful was that? So much so that the Zune doesn't even use Microsoft's own Plays4Sure format that was licensed to other hardware manufacturers (and content stores) Here's what will happen over the next few years:

1.) Various networks and media companies will attempt to negotiate/re-negotiate with distribution rights for their content on the iTMS. Some will sign on, while others leave the store.

2.) Distribution companies that don't go with the iTMS will try to build their own "exclusive" stores with DRM will fail miserably. They will also setup free web streams, but receive complaints from consumers that they can't download their streams to their iPod.

3.) Distribution companies that stick with iTMS see a modest rise in downloads and revenue, but advertisers are upset with not being included in download purchases.

4.) Distribution companies finally see the light (YES FINALLY!) and decide just one method of digital distribution isn't the best way to make a profit and keep content creators, advertisers, and consumers happy. Content distributors begin to offer several ways to get their programming by posting DRM based versions with no advertising for purchase (iTMS/Windows Media/Rhapsody), DRM free based downloads that include advertising as either a reduced price or free download from their own website, and a free, lower quality stream from their website.

They WILL get it at some point. Just like they are starting to get the music sales right now, with the experimentation with DRM free content in various places (both iTMS and others). Maybe a company goes bankrupt, or gets bought out, or a couple of high powered executives get fired, but they WILL get it. Right now they are just trying to manipulate the market to its breaking point to see how much control they can actually have and still make money. Hopefully, they will get it sooner with the video content rather than later.

Remember, Apple is, and always will be, a hardware company. They play the content. The only reason the iTMS exists is because Apple had the vision to see that if they didn't provide the content in a format for the iPod, no one would. I'm sure Apple won't mind a hit in video or audio sales at the iTMS as long as iPod compatible content can be found elsewhere on the Internet.
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