NBC chief says Apple 'destroyed' music pricing - Page 3

Like most of the show biz entities, NBC Universal is probably using "creative accounting". They're all hiding the true amounts. Be interesting if Jobs came out and refuted that number.

Factoring in inflation, the originally promised cost of CDs did meet the target.


Keep in mind that the $4.99 figure was put out by the same PR people that said that Leopard wasn't going to be delayed and AppleTV will ship on time. We don't know what the real figure they wanted was going to be.

The sad thing is, as much as I appreciate Apple's success in coming up with a business model for sellling content online, Jeff Zucker is in the right. Apple prices content so as to minimize profits for the producers and to maximize the sale of its hardware. I understand Apple's desire to keep pricing simple but $2.99 is no more difficult than $1.99. And yeah, Apple should be paying a royalty from its iPod sales.

However, 50 million streams at NBC.com implies that NBC should stop dealing with its writers like Apple deals with NBC and start paying some royalties.

Ridiculous! NBC already made their money when they sold the ads for these shows. Utter baloney!

Last time i checked Heroes is cheaper on Amazon then itunes. So why is Apple to blame and why even tell the press that you left Itunes cause you wanted more money.

My guess is that the companies are holding out for more money for HD content but Apple doesn't want to play that game. The producers are used to getting premium $ for new media sales, look at CD vs. tape, DVD vs. VCR, and HD DVD/Blue Ray vs. DVD. There may have been justification in the past, but I don't think that follows with digital content. To the consumer they technically get less for their money than they do with DVD both in quality and content at today's prices. For the production companies it costs less, they have the digital file and I would bet that Apple encodes it to MP4 and adds in the DRM for them. Besides it is a moot point, Apple has set the price and for anyone else to be successful they will have to beat Apple's price. Look at Amazon's new store, I haven't but the news stories claim $0.89 for most songs. The competition is only going to bring lower prices not higher ones. If Amazon is successful then a year from now the price for a song will be $0.79 and a TV show will be $1.49.

On the plus side, Apple has DVR software already in their FW development kit. They also have a plugin environment with QT. I'm sure that it would not take much to arm Apple's hardware/software arsenal with the legal tools for the consumer to take advantage of recording OTA/cable transmissions as well as tap into the other freely available codecs which are used for video sales and rentals on the internet today. The only thing that they don't have is a full version of the latest WMP which supports rental models. Given half a reason I'm sure that Apple would pull a RIP/Play/Burn campaign, or as close to it as they legally could, with videos as they did in the beginning with music.

I think you're almost right.

In theory:
3 years ago:
- NBC sells the shows to the network &/or individual stations.
- NBC sells DVDs of the shows

1 year ago
- NBC makes money per sale on iTunes
- NBC sells the shows to the network &/or individual stations for a slightly smaller amount (less viewers due to iTunes)
- NBC sells less DVDs of the shows

So iTunes sales are not all Gravy, they take away revenue from elsewhere.
Still .... I think we can be confident that NBC will be doctoring their figures to make the strongest case they can (as any company does)

Why should Apple be the only company forced to do so? Shouldn't every company that sells a portable media player be forced to? Don't forget the cellphones. What about all the cheap Chinese knock-offs that are sold on eBay? How do you collect royalties from them? What happens when you have dozens if not hundreds of content providers demanding a cut as well? Bye bye profit. Bye bye product.

With all due respect, based on your bottom-line tone concerning charity vs. making money, I'm surprised that you misunderstood my comment about "billions of dollars". I was referring to the billions of dollars Universal makes from THEIR OWN broadcasted content and distribution channels.

They were already creating, producing, distributing (analog and digital) the content before iTunes came along. Whining about how much money they get from iTunes and twisting the reality of Apple hardware success as justification is certainly legal, but bespeaks a certain lack of business integrity or sanity that I'm sure will come back around to their detriment.

Explain to me why Apple should pay a royalty to the content producers from their hardware sales when the record companies (and video) are not contributing to the technology and R&D to develop the new technology? If they did agree to this how much would an iPod sell for when you count in all the record companies and video producers? And should all other hardware companies, be it digital or analog (ie record) companies pay a similar profit, because surely they are benefiting just as much, or more, from the content then Apple is with their iPod/iPhone/AppleTV sales.

Yeah, the term probably dates back to Olde English, i.e., before paper was known in the West..... it probably is short hand for "two sides folded" rather than "two folds."

But I have to admit that the original surmise was quite clever.

Demanding a portion of hardware sales is a stupid thing, but I have no idea how else to interpret your previous comment. It almost sounded like you didn't think that NBC should make money from Internet sales at all.

My prediction (worth all of 2¢): December 31 will see a pink slip from GE for JZ. That is, if NBC is not sold off by then.

The guy is an embarrassing throw-back, and probably goes against the grain of how the "new" GE is trying position itself.

At that price, it's definitely not my primary source. I only buy from iTunes if my recorder messes up.

I mean, I pay $13/yr for all of Comedy Central through my (legal) satellite arrangement, so even the multi-pass of the Daily Show is a bit much. I like that the iTunes doesn't have ads but it's a trade-off I can make.

Jeff Zucker is a lazy, greedy bastard.

Hulu.com? The name itself kind of reminds me of the Microsoft Turd Brick.

Get real.

So Zucker wanted to increase the price of a program over 150% plus gain more control over the iTunes Music Store... IN YOUR DREAMS, PAL!!! What an ego!!!!!!!!

Jobs an Apple pulled it off when you guys were still charging too much for CD's and now you want to whine about destroying an industry??? The technology was there and you knew it... but instead of coming up with a business plan for it... you sat on your butts and kept being greedy. No sympathy here and I hope Apple and the iPod financially put you under for good you greedy little man!!! Go and create something worthwhile or get out of the way!

4.99 an episode? Wont that make it much more expensive than just buying the complete season on DVD?

What the hell are they smoking?

Actually not every company does.

I think that's part of why this is turning into a mini-war. Under the surface there's a sub-plot playing out of the type of behavior consumers expect and are beginning to demand from companies in a digital era. A whole good-company vs. bad-company plot. Pro-consumer vs. Pro-conglomerate.

For a while, companies have been able to get away with doctoring the numbers when it comes to digital profit. Our parents' generation looked at digital life as a complicated expensive black box that companies could charge whatever they wanted for (which it was, a long time ago). Generation X and beyond isn't so easily daunted. Companies like Google and Apple understand that shift. They've been key to removing a lot of the mystery and intimidation of digital stuff, making it fun. They're now dictating that the real cost and value should lie in the quality, simplicity, innovation, and fun-factor of a product - not in the ubiquity or mere existence of it.

Apple has sold zillions of dollars of hardware off our backs..............is precious! I and everyone I know purchased our computers either PC or Macs in order to watch all of the fine television programming that they provide via the purchasing abilities of media thru iTunes. To hell with the friggin' television that is sitting in the living room already. Perhaps instead of trying to blame someone else for their 3rd place woes, perhaps they might try to get some shows that people want to watch! Save the show and save the world!!!LOL

If NBC is worried about Apple gaining from iPod sales due to the purchase of NBC content from the iTunes store .... then why aren't they pissed at Sony, Panasonic, and Hitachi for benefitting from TV sales? Of course the answer is that they get a bigger piece of the pie ... our cash ... from TV ads.

Business models that are out of touch with their customers are doomed to fail.

You're right. It could seem like I was implying NBC should be letting people download their content for free. Which I don't think is reasonable. But obviously iTunes was making money for them.

In my book, making more money is not a good enough reason to inconvenience loyal paying customers. If they were losing money, that would be different, but I doubt they were. I'm their customer, I was willing to pay them to download their shows so I could watch them on my computer or iPod when or wherever I want. But in December it'll be gone. And it won't be replaced with anything that adds quality or benefit to my life in anyway. Not to mention that their current online video is incompatible with Macs. That type of profit seeking makes absolutely no sense.

Only other greedy companies will be able to feel your pain. I'm sure your continued partnership with Microsoft has no bearing on this. We would all love to see Zune make a pathway into TV shows that cost $4.99 or more.

If this is true...wouldn't it be classic if Apple bought NBC.

Gold I tell ya, pure gold.

Here's the thing - Apple and the content cartels have always been natural enemies. It's astonishing to me that the cartels have taken this long to figure it out, Apple's known it from the beginning.

The big media companies do not create anything. In one of their business practices, they do enable the creation of content by providing the up-front capital. But because of their lock on distribution, they can extract completely unreasonable terms from anybody who wants to get paid for producing that content. With the way that the business is structured, there's only one game in town - it just has many faces. It's highway robbery in the classic sense - they control a critical piece of the road from creation to the consumer and get to take away as much as they can carry.

That is, there was only one game in town. Now comes the Internet - you don't need a network of affiliates all over the country, you don't need to buy into a basic cable distribution package, you don't need to grovel at whatever deals the incompetent cartel executives tell you are in your best interests and ultimately you don't have to just swallow it when they tell you to dumb it down and add more tits and action. If you can get it created, the Internet will take care of the distribution for what is essentially free (at least, if you can figure out a way to make money, it'll be a tiny fraction of what people will pay).

The content cartels' days are numbered, and they're going to blame everybody they can for the extinction of their business model when it's really just the march of technology that has finally obsoleted their highway robbery.

We're not there yet but Apple, and anybody else who can figure out how to cut the cartels out of the decision making process while still allowing content creators to make money, is going to put these dinosaurs in the ground. And not a minute too soon.

Score One For Jazzman. Point!

Explains why that shit-hole network has been in LAST place for years! What a jackass! Most of NBC's shows aren't worth paying for. Heroes is the only thing they have now.

He actually thinks sales of NBC shows increased iPod sales? Where has this moron been since 2001? NBC shows had nothing to do with hardware sales.

Wow! I couldn't have said it better myself!

They could have if the majority of iTMS video sales was made up of music videos and films, making NBC's $15m a 40% cut of a small slice of the pie.

Of course, that theory makes the idea of raising prices even more ridiculous...

until they start charging! Oh, dear dot-bomb2!!

McD

Idiot. The music industry had no successful download model until iTunes came along. Until then the rate of illegal downloads was growing steadily. If not for a successful download model the music industry today would be devastated. He's got the whole thing backwards: Apple saved the music industry.

It would be interesting to see what some random poll research tells us concerning the feelings of American or International customers. I personally want to know how people feel about Apple and music and the music conglomerates...as well as Apple and TV/Movies and the Studios. These forums, as well as myself, are generally biased towards Apple, but what does the average consumer think and feel regarding this? Just a curiosity.

Hahahaha, as if NBC were selling highly desirable shows that are exclusively available at the iTunes Store.

Oh I'm sure the average consumer would support NBC's plan: Higher prices for TV shows, higher prices for iPods. Who wouldn't want that?

As a head of a corporation, this Zucker guy should be ousted. This is some seriously harsh mudslinging that is embarassing and in bad taste. This is no way for a CEO to act!!!

I don't watch a lot of TV but this kind of BS Crap will encourage me to NEVER watch any programs of theirs!

Idiot who should be ousted!

I paid US$120 (shipped to Hong Kong) for all 7 seasons of Buffy on DVD. That works out to $0.83 per episode. Plus art. Archived format. Full quality. Commentaries. Interviews. Extras. Multiple languages. Fully convertible to play on my iPod (or Apple TV if I had one) with free software.

Now how much do you expect people to pay for no art, no physical archive, no extras and limited quality?

Exactly. He's using creative accounting, by restructuring the categories in which he is calculating revenue streams.

Excluding Advertising : Made :
Including Advertising : Made :
etc.

Reminds me of the days when the Hollywood Studios had the actors/actresses by the collar and entrenched them in grueling hours of labor for pennies on the dollar.

Actress Ruth Elizabeth ``Bette'' Davis went to Court over the slave labor wages they were under. She lost but soon followed another case by Olivia de Havilland who won and these two women became two of the most revered actresses in their time.

Hollywood Studios changed their business model.

It appears that this time Technology companies are going to change the business model, but this time forever.

The Media Companies will either adopt and adapt or sell off the divisions that once were cash cows.

Time Warner is a prime example of a ship sinking rapidly.

If there is anyone to blame, you have to blame the destruction of the music business on Britney Spears and Paris Hilton. They've taken music towards where only a porn star can become a real singer. And then on that note, one does not even have to be a real singer anymore. Just a porn star who can shake it with a microphone instead of a dildo.

NBC should consider making porn their new business. Then proudly brand their rainbow colored cock all over the place.

Sure the scale is very different, but the principle is the same. Are you 'sure' not a single ipod owner bought an ipod just so they could watch their favorite show on their work/school commute? In the long run, Apple needs the movie/music industry just as much as the industry need a distribution network. If ripping cds for some reason was made illegal, and the content producers stopped working with Apple and partnered with someone else(e.g microsoft), apple would bend over backwards to get them on board again, and that would include giving them a cut of the hardware sales. Apple is just not willing to go along with this at the moment because they have the most successful platform for digital distribution and loosing NBC is probably a lot cheaper than opening the gates for paying hardware revenues to the content creators.

Who maintains AT&T's huge and expensive GSM infrastructure? Who paid for the gsm spectrum lisence? Sign up and technical support are relative minor costs when running a teleco company, surely nothing close to the $600/user Apple is earning atm.

I'm in no way against the at&t/apple deal, great that apple found a partner willing to go along with their terms - I'm sure at&t also makes good money from this partnership. There is however no reason to think apples deals on the iphone are any better/worse than what the music industry wants wants in regards to the ipod.

Apple is getting that from AT&T because of the exclusivity AT&T get on the iPhone. That is a completely different deal that the one between Apple and NBC.