If I may ask an off topic question (since you all seem knowledgeable about online movie/music stores): Does anyone know of a service where I can pay a flat fee to try songs to see if I like them? At the iTunes Music store, I can't really browse for new music since the 30sec limit makes it impossible to see if the song is good sounding throughout.
If I may ask an off topic question (since you all seem knowledgeable about online movie/music stores): Does anyone know of a service where I can pay a flat fee to try songs to see if I like them? At the iTunes Music store, I can't really browse for new music since the 30sec limit makes it impossible to see if the song is good sounding throughout.
If I may ask an off topic question (since you all seem knowledgeable about online movie/music stores): Does anyone know of a service where I can pay a flat fee to try songs to see if I like them? At the iTunes Music store, I can't really browse for new music since the 30sec limit makes it impossible to see if the song is good sounding throughout.
Mm. True. I believe most of the other Microsoft DRM solutions let you do that, but its my understanding that its not entirely consistent as to what songs are available per subscription and which for purchase. Probably your best option right now? After SingingFish got swallowed by AOL, things got a little dry.
Here's two: Deezer. Originally a virtual ipod, but now a more rounded service: ( http://www.deezer.com/ ) --And Seeqpod ( http://www.seeqpod.com/ ). It is an excellent way to sample music, even better when you have an iPhone on WiFi, there is a custom interface for it.
I believe other illegal services allow more sampling flexibility (Russian sites). I generally despise them so I'll refrain from mentioning them by name.
Original Message: by M Paquette on 9/1/2007 4:40:16 PM
NBC-U Statement: "In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers."
Translation:
"If you want to buy The Office, it will be available as a bundle with The Singing Bee and Poker After Dark for only $4.99. Only $1.66 a show! Such a deal!"
Bundling of media is done to promote poorly performing content by attaching it to popular content. Viacom does this in the packaging of cable channels for sale to cable and satellite services. (Want MTV? You're going to get Nickelodeon and TV Land, too.)
idannyb response:
M Paquette and Bernoulli: IMO, you both are on the mark in your analysis of the game that NBC-U tried to run on Apple. NBC-U is reeling under a PR nightmare. Apple's Press Release (response to NBC-U non-renewal on iTunes) just passed 4,800 diggs with many hundreds of comments running 9 to 1 negative on NBC-U. NBC-U?s subsequent counter-response claims "we never asked to double the wholesale price of our TV shows."
Just for fun, here is a bit of role-play (conjecture) re the recent NBC-U/Apple iTunes contract negotiations:
NBC-U: Here?s the deal Apple, we want to bundle show offerings on iTunes and bump the price-point to $4.99
Apple: But you?re taking hit shows and packing them with turds. We understand that you?d like more revenue and this is one way to twist the consumer?s arm ? but it?s not pro-consumer and will only cause NBC-U?s share of iTunes revenue to drop. Dramatically we might add.
NBC-U: Our pricing model shows this will not hurt our iTunes share. Quite the contrary.
Apple: Who?d you hire to do your modeling?
NBC-U: The Enderle Group and Forrester Research.
Apple: (collective roll of the eyes) Oh I see. Did Enderle and Forrester also consult on your new Hulu.com venture?
NBC-U: Yes ? But that?s none of your business.
Apple: Okie dokie ? I think we?re getting a better picture now.
Here?s the deal. We?ll offer your proposed bundles with any packaging combo you?d like ? and at any price point you want ? $4.99 or $5.99 or $59.99 for all we care ? BUT regardless of any bundled offering you propose, we are adamant that consumers have a true choice ? So iTunes will keep the individual shows at a stand-alone $1.99 per episode. That way the consumer can compare your bundled offering/pricing and decide whether they want the package for $4.99 or just the one show they are interested in at $1.99 ? Okay, sounds fair and reasonable? Doesn?t it? We?ll let the consumer decide.
NBC-U: Sorry Apple, we don?t see it that way. Our packages are designed to give the consumer an excellent value of content at a discounted ? Blah, blah, blah ? cough ? BS? spin? and more BS. So ?No? we will decide how shows are packaged and that means that some shows will NOT be available unless the consumer buys the full package. Hey, you (iTunes) already do this with selected songs on albums. ?This song is available only with purchase of the album.?
Apple: Not the same thing ? The songs were all part of an original album and by the original artists. You are talking about packaging completely different shows tied by some sort of nebulous theme.
NBC-U: Look, you have our position on this matter. You?ve seen our proposed packaging and pricing ? were not asking for permission ? In fact, we are hereby giving you the requisite 90-day non-renewal notice. As you know we have plans for streaming videos through our own Hulu.com website ? we think it?s going to be a compelling offering and so do our distribution partners. Again Apple, we are not asking for your permission.
I guess the question is: Who is lying, Apple or NBC?
My guess is NBC.
Neither is lying. First, discard the author's bad interpretation of the statement. Then note that NBCU's response to Apple was indirect; it's carefully worded legalese. They didn't refute the 4.99 price. They said "never asked to double" but Apple didn't say NBC asked to double; Apple said "more than double". Read all these press statements very carefully -they're all true, but what's really being said is between the lines.
My conclusion: NBCU asked for flexibility to bundle content and charge a high enough wholesale price so that Apple would charge $4.99 retail. Apple sees bundling in the same way as that of music albums - to get the thing you want, you need to pay for stuff you don't want. So in effect, you get the one thing you want for more than double the previous price.
Also, NBCU asked Apple to crack down on piracy; as Gruber said, this is either that Apple's iPod detect illegal copies and not play them, or having iTunes detect and identify illegal copies. Apple refused to do either, or pay a tax per iPod for that potential illegal content (a la Universal and Microsoft Zune).
In the middle statement, NBCU shows that it simply forgets that without those iPods, tens of millions of people wouldn't pay one cent for the content, since that content can be gotten legally (taped off TV) and illegally for free. NBCU mistakenly thinks that Internet distribution/retailing is so easy that they can treat Apple differently than Wal-Mart, Target, or Best Buy. Maybe because Apple so easily entered into direct retail (Apple Stores and iTunes Store).
And all you Apple fanboys (on this site and others) who say they will "get their NBC content one way or the other (hint hint, wink wink)" should think about the NBC person who says "I will get Leopard one way or the other" too. Pirating Leopard is just as easy, and just as wrong.
Unlike what NBC wants Apple to do, Apple hasn't forced anyone to stop pirating Leopard, nor have they made or asked any sites to check for Leopard.
Even for Tiger, they did so only in the case of breaking NDAs. Once Tiger was released, Apple hasn't stopped anyone. Unlike Microsoft, they have no you-criminal-activation-schemes.
I've read about this on several different sites and after having done so, I believe that it was NBC trying to force Apple to raise rates. Apple refused and decided to drop the publicity bomb on NBC. Apple knew people would be furious at the proposed rate hike from NBC and would voice their opinions loudly. NBC back peddled and tried to save face by using obtuse words like "Attractive" in their statement - being sure never to clarify if their proposal was in fact attractive to the consumer, or attractive to NBC! They could lie to the people and make it sound like Apple got everything wrong.
The trigger for this whole episode was primarily the NYTimes article published on Thursday, and secondarily a CNN article on Friday morning. The leak for the Times article came from NBCU. Why do I say that? Because 1) the article stated NBC's share of video sales at 40% which Apple corrected as 30% in the press release and 2) the article stated that the other networks would be entering the 90-day window and there could be many more defections which Apple corrected with all of the major networks and over 50 cable networks had already signed on again at the same rates. The article would not have had this speculation casting a bad light on Apple if the leak had come from Apple. This latter item basically forced Apple to respond publicly to remove the speculation from influencing its stock price and reputation.
If NBC had simply said on Friday that it was not renewing its iTunes contract due to disagreements with Apple, I don't think Apple would've released a statement. By going public via the leak, and casting aspersions on Apple, Apple had to hit back, and they did with gusto.
But, they are interesting points, and I'd also like to know exactly who said exactly what.
Here they are:
Apple's press release:
"CUPERTINO, California—August 31, 2007—Apple® today announced that it will not be selling NBC television shows for the upcoming television season on its online iTunes® Store (www.itunes.com). The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
“We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”
Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales."
NBC's response: Cory Shields, executive vice president of communications for NBC Universal, disputed these claims in a prepared statement.
“We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers. It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying. In addition, we asked Apple to take concrete steps to protect content from piracy, since it is estimated that the typical iPod contains a significant amount of illegally downloaded material."
strange that in the times of the tapes and walkmans the media industry made money, more more than today...
why is it that companies today think they can force everything they can come up with in terms of DRM on the consumer???
back in the days of self copied mix tapes and VHS copies no one cared... why should they now???
it's the same approach as in iraq somehow... let no one think freely and force their way of thinking on anyone else... the ones that disagree will the the GITMO treatment...
people buy the legit stuff because of ethics, not because they're forced to...
if the industry treats everyone like criminals and goes "big brother" "1984" style... shouldn't we fight back like we do and completely stop consuming the way the big media companies want us to???
@ least i stopped buying as long as DRM is implemented...
i got my HD media player that plays DIVX/Xvid/h264 up to 1080p without DRM...
and my elgato ATSC over the air HD tuner receives and records HDTV for free...
So, are you saying you'd take a cut in salary for the work you do? Say, 1/10th of what you're getting? I agree that the talent has no control over the final pricing most of the time (and almost never get the lion's share of the money), but they still have to get paid.
Why is it that intellectual property is somehow deemed free? Don't the musicians, film makers, etc. need to get paid? It's like saying we should sell cars for $100 dollars. Really, it'll be the factory workers who take the cut, not the company heads. $1 for CD's, DVD's, etc.? How do you pay the people who make them?
I don't know about $1, but when the "cost" of the delivered product amounts to amortizing some servers and buying some bandwidth, there is a price point which will encourage enough volume to optimize sales and royalties to content creators.
When companies first started to release videos for sale instead of just rental the price disparities between movies that cost about the same amount to make was staggering. $29 (or more) for one $14.95 (or less) for another, and eventually a range of points were found, or at least they thought it was found. What WAS clear though, as with today's situation, was that the prices had little to with the costs of physically producing and distributing the tapes, and everything to do with finding out what the market would bear, and at what price discount from that volume would more than make up for the lower per unit profit.
With DVD's we began to get "extras" -- sometimes an extra disc of them, director's cuts, limited editions, sets, and other variants that would generate a higher markup by pandering to the true fans of the material, much more than adding any real value to the sale.
I'm not for regulation, but I am for pushing for companies to make their products available to more people over a greater range of of income so that there's a win-win: Creators and even parasitic suits make more money on volume and more people who want to see the shows and movies get to, and the illegal distributors get squeezed, fewer computers get malwared from P2P sites, less young adults become inured to stealing content with no moral qualms, etc.
The logic is simple, but dinosaurs, e.g., studio execs have difficulty adapting to environmental changes. Where's a metaphorical giant asteroid to wipe 'em out so that warm-blooded mammals can take over??
After Apple and Creative came to an agreement, the concept was that Creative was now free to sue others, with Apple benefitting as company "C". Each company Creative sued that lost, would have resulted in a diminution of Apple's $100 million agreement.
Hey, why are you getting down on the people who are making the content? They're not the ones doing this; in fact, a lot of them are on the side of the angels. And most of the gaffers I know in TV and movies don't make 120K. You must know some really veteran gaffers with major seniority and a great exchange rate.
Not entirely... scale payment for a union gaffer on a feature film is 2078.73 a week. A gaffer wouldn't have to work too far up the ladder to get to $3000.00 a week and work 40 weeks of the year. But I do have to disagree with the original poster that the gaffer doesn't deserve this much... really he is a vital role. An artist if they are good.
-Content providers already make money on the selling of hardware in Europe. France, Germany and others already have a "piracy tax" on DVD-R, iPods, even DVD burners. The excuse of that tax is that it compensates "possible priacy due revenue losses" and people have to pay it regardless whether they will ever use the devices illegaly. This tax (or rip off) goes directly in the pockets of "RIAA-like" associations all over Europe.
- video capable iPod sales are strong in Europe, and this is NOT connected in any way to legal downloadable video content on iTMS (there isn't any here!!)
- quality of video sold on iTunes is "sub DVD". This basically means that prices have to be "in connection" with the benefits (ease of use, portability, flexibility). You can only charge a certain amount for that, not an indefinite, otherwise people will no longer see the benefit and look elswhere.
- NBC will suffer delay, people are not going to be able to watch their seasons from the start on Hulu.com (server crashes, bugs, etc.). Their platform has NOT EVEN BEEN RELEASED IN BETA prior to launch. Think about how many issues they will have! So people will feel cheated and more ripped off.
- Basical Hulu.com will be even more of a lock in for people. They will have stronger DRM, you will only be able to purchase NBC and ABC shows (nothing else, no music, no movies, nothing besides THEIR OWN CONTENT).
- Apple is making a lot of money, their model has proven to be successful. NBC and the others are struggling for their bottom line. Instead of asking themselves the reasons, they look at iTunes like the new cash cow, forgetting that there STILL are the free alternatives.
Apple is not "the good", but it is acting certainly more in favour of customers.
NBC and the other companies also forget that there is a lot of untapped markets (Europe and Asia come to mind) in which, if they break the deal with Apple, they will never be able to make money on iTunes. iTunes will be more than happy to make (if they are smart enough) content deals with European producers in Europe. People will be able to buy all European produced series on iTunes, plus major US series (excluding NBC's). So, at the end of the day, NBC might be in a position to loose huge amounts of money. But that goes beyond what we are talking here.
I remember that, in 2002, I worked at Paramount. Somebody (IN 2002!!!!!!!!!!!!) asked me to check where their TRAILERS where streamed illegaly to have a glimpse of the market.
I went to my boss and told him "why do you bother with tracking trailers when there are plenty of sites that allow you to download entire movies?". They didn't have a clue. And that was 2002. How can such managers be responsible of decisions when they have:
a) fear of innovation
b) no intention whatsoever to act in the long term (stock options last less than 4 years)
c) no idea of what technology is and how it works
They have plenty of "outsourced experts" because smart, tech knoledgeable people seldom work for these jaggernauts in which decisions take ages to be taken and there is always someone high up who has a "friend" that does things better (think Hulu.com, why not iTunes??? WHY HULU????). Smart, knowledgeable tech people work for Apple and the likes (Silicon valley is full of them).
The "outsourced experts" mentioned above always (since they are outsourced) have their own agenda and try to sell these guys stuff...
The movie company mentioned above, didn't even have a single person responsible for overseeing the movies' internet sites, just a dozen or more small companies each in charge of their own site. How can you manage that? Took this company some years to figure out they needed a new internet site because the old one was designed in "Front Page" like style.
I mentioned this, because I worked there, but guess others are the same.
Sorry for the long post.... I'll not write for the next 3 days...
I think you don't get it. If NBC can sour this market, they can make their other venues seem more popular. They set to make more money from endeavors like Hulu, but only if they can attract a large audience. If they can confuse the iTunes market enough, by charging variable pricing and making people hunt for "bargains" they'll come running to Hulu. At least that's the theory.
And its completely in their right to do what is BEST FOR THEM. What, do you think NBC, Apple, or any company, is looking out for YOU'RE best interest?
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Originally Posted by Cleverboy
Quote:
Do you know why they sell those DVDs for $20-$25? Because there are people who will buy it.
Wow, thanks for clearing that up.
Wow, thanks for clearing that up.
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But its up to the people who produce the content to decide what they want to sell it for. Its up to the consumers to decide what to pay for it. If you don't like the price (and you don't), don't buy it. But just because you don't, that doesn't mean there aren't people who will.
Simply brilliant. Here's another scenario. The content industry was engaged in a series of money-losing enterprises, and iTunes came along with a simple format and flat pricing scheme that has won throngs of customers. It's been this way for YEARS now. It's the ONLY format that has been phenomenally successful. iTunes doesn't carry every content under the sun... do you realize this?
You can be sarcastic all you want, but you're original quote on seeing $20 DVDs was something like "Are you HIGH?", implying that the pricing was incredibly stupid and no one would buy it (maybe you were asking that of the people buying it, I don't know). But you seemed utterly confused that someone could charge $20 for a DVD.
As for the content industry being in a series of money losing enterprises, that's just garbage. You make it sound like TV studios were about to go belly up if it weren't for the advent of videos on iTunes. The studios already were raking in tons of money, both from producing content for distribution on TV and in theaters, to, then PPV broadcasts, followed by DVD sales. TV, especially, has seen DVD sales push their profits where they'd never been before (obvious proof of this is just look at how every TV show, no matter how stupid or inane or completely unpopular, still ends up on DVD). On-line video sales is NOT the "ONLY format that's been successful".
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Here's a secret. Not every TV show and existence appears on iTunes. They only list the ones that agree to sell for $1.99 cents per episode. Whether its a tv show, music video, or short movie consumers can count on that $1.99 price point. If you want variable pricing, maybe some content simply isn't available on iTunes... maybe you need to buy it on Amazon. Feel free. I'll stick with using iTunes and their signature stand on value. If someone wants "flexible" pricing and higher fees, they can take their product elsewhere. Chicken and egg. iTunes is popular BECAUSE of its simple value proposition.
So you're philosophy is "If the price isn't the same for everything, I don't want to deal with it!" That's nice, but that doesn't mean people have to follow by your idea of this.
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It is IDIOTIC to think that iTunes is popular and therefore can pour ANYTHING into its store, and let the market decide. Stores like Trader Joe's and Walmart (on the larger scale) are VERY sensitive to the pricing of products they allow in their store. For instance, Walmart is clearly waiting for stand alone HD players to come under a certain price before offering them. Should they let the consumer decide and offer EVERYTHING? No. If presented with unsavory options it would reflect DIRECTLY on the store.
You're using Walmart as an example? OK. The reason Wal-mart won't put more expensive stuff in its stores is because they know their clientele can't afford it! Plain and simple. That's why Macs will never sell in Wal-mart. People go there to buy tube socks and toilet paper. They don't go there to spend a ton of money.
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You're confused already. If Walmart constantly listed high end pricing and low end pricing, people wouldn't go there as often. They go to Walmart for a consistant value proposition. For high-end products, they simply shop at a different store. Like Lord & Taylor or Macy for high end clothes. Right?
What? Are you saying that people would stop going to wal-mart to buy $2 tube socks because they also list a $500 HD player? I'm just amazed how stupid you apparently consider the American consumer.
And if I want to sell something at Wal-mart and they want it for a lower price, I have the option of walking away. Just like NBC. Does that mean, all of a sudden, that my product is crap and I'm going to lose my shirt? No. But you make it sound like its Apple right to force NBC to a pricing scheme they don't want to subjugate to.
In fact, many people will tell you that the reason they charge such low prices is Wal-Mart is so big as to literally be able to twist the arms of its suppliers to lower prices. Who cares how it affects the actual company, its workers (more jobs shipped overseas) or their bottom line. Its all about Wal-Mart wanting lower prices. And why do they want that? For the benefit of the consumer? Ha! Its all to make Wal-Mart more money. Plain and simple.
Now, replace Wal-Mart with Apple. Same story. But people here won't believe it, because they bleed Apple, and can't believe Apple is in business for themselves, not their customers.
Quote:
Hm. Actually in the real world, there are these things called "dollar-stores". You may have heard of them. When you're there, there is a specific break-down of goods that you can by at a consistant price. It's how certain markets are built, based on a simple value proposition for customers.
So what you're saying is that people go to the dollar store because they're too stupid to decide on the price of an object at a Wal-Mart? And if, say, everything in a dollar store is a $1 (yes, I know they're not, I'm trying a simplistic example), do the customers just buy everything they see because the price is $1? No, they still make value judgements. "Is this Slim Jim worth $1" People go there knowing that the price isn't going to exceed a $1, but they're still not just going to accept the price as displayed if they feel its not worth it.
In comparison, I have the same feeling with the iTMS and songs. There are some songs I'll pay a $1 for. Others I will not. Maybe 50 cents. But not a $1.
And so far you've compared the iTMS to Wal-Mart and Dollar stores. Man, who knew Apple appealed to such a low-end crowd. I thought they were a high-class store like Macy's.
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If you don't understand the way movies are priced on iTunes (according to release date), then I won't help you out. You're being very lazy.
OK, now you're just being hard-headed. I do understand the pricing of movies on the iTMS. My point is, and try to follow, all movies are NOT priced $10. New releases are priced higher. Why? Oh, wait, because their new? There might be more demand for them, so they charge a higher price to MAKE MORE MONEY?
But if Apple can variable price movies based on release date, and you are apparently OK with that, what's wrong with variable pricing TV shows? How is last night's episode of Heroes just coming out different then the release of "Cars"? Why not let them charge more for it the first week or two its out? Why are you giving movies the "OK, they can sell for more", but with TV shows its "OMG, how dare they!"
By offering up a TV Show the next day from when it aired, you're basically offering up a service. When anything comes out new, it usually costs more then later on (esp. since those who want it the next day probably are those who really want to see it).
You also give no account to the cost of poducing a show. If Heroes costs twice as much to produce as "The Office", why should each be priced the same? In fact, don't you feel cheated knowing you're paying the same price for a 20 minute sitcom vs. a 45 minute drama? And, as an example, not all shows are $1.99. I was looking at Battlestar Galactica, which costs $1.99 per episode, and went, "Hey, let me go check out that 4 hour pilot". It cost $17. Not $8. Not $6 (since it really was just 3 hours), but $17. For four 'episodes'. Hmmm. Seems like Apple had no problem there charging more for it (BTW, because I have free will, am a semi-intelligent person, and can make decisions on my own without having to rely on stuff like "everything at one price!", I made the decision not to buy it. But it was my decision, not Apple's for refusing to sell it to me).
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A friend of mine considered putting her music on iTunes and went ahead with it, for exposure. She'd been selling her album off of her website for $12.99. iTunes pricing was $9.99. She weighed the benefits, and the clear optimizations of non-physical distributions, and thought it more than made sense for her music.
Maybe you're friend should realize that albums don't cost just $9.99 on iTunes. A lot cost more then that. More of that variable pricing that Apple allows, when it suits them. And 99 cent songs are same-priced, except of course, where Apple doesn't let you buy the song individually (because, say, they have some internal preset limit that says "Any song over 6 minutes can't be purchased separately" or because it would then mean the album couldn't sell for $10 or for many other reasons).
And, if you noticed, Apple has sales. $8 for an album. And some albums are less then $10 because they have less then 11 songs on them. So if you're looking for albums, you do NOT know how much it'll cost. And now with iTunes Plus, you really don't know songs are 99 cents. Some might be $1.29. But no one knows what songs those are, because 99% of the people have no clue what label produces what artists.
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If all song tracks were available for the same price, consumers could make a purchase decision before they even opened the iTunes application. Same way for tv shows. --Ok, I'll help you out... with movies, if its a new release, you can pre-order it for $12.95, or buy it for $14.95 in some cases. Most all other movies are $9.99 (library items, movies that have been in publication for some time).
OK. But you make the assumption the user KNOWS that a movie is just released, and that's why the price is high. They still have to go to the store to see what the price will be. As you say, "you can buy it for $14.95 in some cases". SOME cases. Not all new movies, then, are $14.95? What's the divining line. When does the price lower? You're not going to know this before you go there.
But, I'm sorry if you don't understand this, but there's as much stuff on the ITMS that is already variable pricing as fixed pricing. Very little in the world is fixed price ("Hmm, let me see, for $20000, do I want the Hyundai or the Lexus"). I have no problem with NBC wanting to try something different.
Original Message: by M Paquette on 9/1/2007 4:40:16 PM
NBC-U Statement: "In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers."
Translation:
"If you want to buy The Office, it will be available as a bundle with The Singing Bee and Poker After Dark for only $4.99. Only $1.66 a show! Such a deal!"
Bundling of media is done to promote poorly performing content by attaching it to popular content. Viacom does this in the packaging of cable channels for sale to cable and satellite services. (Want MTV? You're going to get Nickelodeon and TV Land, too.)
idannyb response:
M Paquette and Bernoulli: IMO, you both are on the mark in your analysis of the game that NBC-U tried to run on Apple. NBC-U is reeling under a PR nightmare. Apple's Press Release (response to NBC-U non-renewal on iTunes) just passed 4,800 diggs with many hundreds of comments running 9 to 1 negative on NBC-U. NBC-U?s subsequent counter-response claims "we never asked to double the wholesale price of our TV shows."
Just for fun, here is a bit of role-play (conjecture) re the recent NBC-U/Apple iTunes contract negotiations:
NBC-U: Here?s the deal Apple, we want to bundle show offerings on iTunes and bump the price-point to $4.99
Apple: But you?re taking hit shows and packing them with turds. We understand that you?d like more revenue and this is one way to twist the consumer?s arm ? but it?s not pro-consumer and will only cause NBC-U?s share of iTunes revenue to drop. Dramatically we might add.
NBC-U: Our pricing model shows this will not hurt our iTunes share. Quite the contrary.
Apple: Who?d you hire to do your modeling?
NBC-U: The Enderle Group and Forrester Research.
Apple: (collective roll of the eyes) Oh I see. Did Enderle and Forrester also consult on your new Hulu.com venture?
NBC-U: Yes ? But that?s none of your business.
Apple: Okie dokie ? I think we?re getting a better picture now.
Here?s the deal. We?ll offer your proposed bundles with any packaging combo you?d like ? and at any price point you want ? $4.99 or $5.99 or $59.99 for all we care ? BUT regardless of any bundled offering you propose, we are adamant that consumers have a true choice ? So iTunes will keep the individual shows at a stand-alone $1.99 per episode. That way the consumer can compare your bundled offering/pricing and decide whether they want the package for $4.99 or just the one show they are interested in at $1.99 ? Okay, sounds fair and reasonable? Doesn?t it? We?ll let the consumer decide.
NBC-U: Sorry Apple, we don?t see it that way. Our packages are designed to give the consumer an excellent value of content at a discounted ? Blah, blah, blah ? cough ? BS? spin? and more BS. So ?No? we will decide how shows are packaged and that means that some shows will NOT be available unless the consumer buys the full package. Hey, you (iTunes) already do this with selected songs on albums. ?This song is available only with purchase of the album.?
Apple: Not the same thing ? The songs were all part of an original album and by the original artists. You are talking about packaging completely different shows tied by some sort of nebulous theme.
NBC-U: Look, you have our position on this matter. You?ve seen our proposed packaging and pricing ? were not asking for permission ? In fact, we are hereby giving you the requisite 90-day non-renewal notice. As you know we have plans for streaming videos through our own Hulu.com website ? we think it?s going to be a compelling offering and so do our distribution partners. Again Apple, we are not asking for your permission.
Not entirely... scale payment for a union gaffer on a feature film is 2078.73 a week. A gaffer wouldn't have to work too far up the ladder to get to $3000.00 a week and work 40 weeks of the year. But I do have to disagree with the original poster that the gaffer doesn't deserve this much... really he is a vital role. An artist if they are good.
It was more the 40 weeks per year that's the limiter, generally (and the only union jobs part). And I have nothing but wonderful things to say about my gaffers, but I didn't want to get into how much they and the rest of the crew are worth their weight in gold. Everyone thinks crew are unskilled people that just stand around doing nothing (quite the opposite).
strange that in the times of the tapes and walkmans the media industry made money, more more than today...
why is it that companies today think they can force everything they can come up with in terms of DRM on the consumer???
back in the days of self copied mix tapes and VHS copies no one cared... why should they now???
It seems to me that only a retarded person would compare "mix tapes" and "VHS copies" to the ease, quality and choice that BitTorrent (and its ilk) provide.
Personally I don't see how this paints Apple as anything but vindicated. To try and shift the blame on iPod sales vs. paying more than you do for a better quality DVD is ridiculous. We are talking about free programming, and they still want to charge more than $1.99. They could eat my ass, and I'd still not pay a dime for a free show. What TF do iPods have to do with charging more for a digital download than it does for a better quality DVD anyway? Not a damn thing. NBC is totally unrealistic about the value of what is actually free programming. They are lucky anybody is buying that shit at all, and now they decide that it may be the opportune time to rape you for it. ?u¢k them!
There's no such thing as free programming. Each half-hour program, at least here in the Us, and I imagine Canada, has only 22 minutes of actual program. You can see this very well by looking at the actual times of the shows in iTunes. That's what is left after the commercials are removed.
When I was a kid, I had to run to the bathroom, and back again, to not miss the show as it came back after the ad. Now, you take a stroll around the block.
Don't be so quick to agree. Notice what we're talking about. Until iTunes, you could NOT buy a single track of music unless the company had published the song in the format called, aptly... a "single". The single died for a number of reasons, mostly, it wasn't financially viable from the manufacturing end.
Prior to iTunes, you couldn't purchase a single episode of a TV Show, or a single music video. These are NEW products that have only previously been available in aggregate. Apple still has provisions for variable pricing on "seasons" or "albums". It's still there. Most music albums are $9.99, but some aren't. What Apple doesn't practice variable pricing on, are the smallest increments of their sales. These are things that represent "impulse buys" for most people.
iTunes enjoys many thousands of impulse buys every hour of every day. They regularly have sales on music albums and audiobooks, further creating "attractive" values for consumers. The idea of futzing with the pricing on their "impulse buy" products, is fairly silly if you think about it. It's like McDonald's having a dollar menu with $1.30 items speckled throughout it. Also, its important to note, that uniformity of pricing works for and against. It means that while you can get most all library title movies for $9.99, some movies that are clearly not popular, ALSO cost $9.99, where they might otherwise go at 2 for $9.99. I think the trade-off is perfectly fine though. Sometimes, simply NOT BUYING something, doesn't really send a specific message. That's where popular retailers come in to encourage better value from their sales experience and customer feedback.
If iTunes has strict pricing requirements in specific sections of its product catalog, its their prerogative. Some items to a business structure aren't negotiable. This just means that we won't see certain products on iTunes. I think that's perfectly fine. The comments people make that this is "wrong" strike me as really strange though. It's like getting mad at Walmart because they won't carry Bose sound systems. Or criticizing McDonald's for not carrying shrimp or caviar. If a certain movie is determined by a studio to cost $20, and it can't stomach EVER selling it for $9.99, *even if* they aren't paying physical costs, that's fine. Don't sign with iTunes. More than a few people laugh at Amazon for listing new movies at $21.99 digital downloads, when the DVDs cost exactly the same, and allow much more playback flexibility, content and value. --But the studios are very scared of undermining their soundscan numbers and need to be strongly encouraged to embrace the new realties in the marketplace. That's my opinion. I don't blame them, but no one said transitioning to the future would be easy.
Exactly.
~ CB
I understand what you're saying. It's been written about in all the financial papers, and music magazines, as well as every website, including this one, for years now.
But, I'm old enough to remember singles very well. singles died out for several reasons. Economics was just one of them.
The main reason had nothing to do with that. It was that music was changing. Where before, an album was just a collection of songs, in the late sixties, it became a message. Bob Dylan, the Beatles, and others made albums that really needed to be bought as a unit.
In addition, the songs, which before were rated on the Tv rock and roll shows as better because "You can dance to it", became popular more because you could listen to it. Themed albums became the norm. Breaking them up didn't work as well, and people simply stopped buying singles.
In fact, the CD helped to destroy singles as well. But, that was inadvertent. You apparently don't remember them, or perhaps you were too young, but the industry bemoaned to loss of the single as an instrument of sales. Several times they attempted to bring back the single with the CD Single, often, a 3.5", or so, product, but the public wasn't interested. I have a number of those.
Then the industry forgot about the single, and began to rely on CD album sales.
Now, they aren't happy about the return of the download single. Things go around. Apple is trying to encourage the purchase of albums, and indeed, in the past 18 months, or so, the sales rise of whole albums has exceeded the sales rise of singles.
I would suppose that with themed albums, which artists often like to make, breaking them up to sell individually, would be like selling a book by the chapter.
So, I do think that going to Barnes & Noble is similar to buying from iTunes, if you think of a song as you would a book, and an album as you wood a themed series of books. Of course, books cost more.
Unlike what NBC wants Apple to do, Apple hasn't forced anyone to stop pirating Leopard, nor have they made or asked any sites to check for Leopard.
Even for Tiger, they did so only in the case of breaking NDAs. Once Tiger was released, Apple hasn't stopped anyone. Unlike Microsoft, they have no you-criminal-activation-schemes.
It isn't quite the same thing. I remember when Apple used to give away their OS upgrades. That stopped with System 7, I believe, when Apple realized they could make money from it just the way MS did.
But, with Apple, the hardware is the thing. If you do pirate the OS, where are you going to use it other than a machine that was purchased from Apple at some point, for far more money than the OS goes for?
I guarantee you that if Apple ever did license the OS to the public at large, as so many want Apple to do, they would be just as restrictive as MS is now, possible more.
They are in business to make money, not give their product away.
Comments
If I may ask an off topic question (since you all seem knowledgeable about online movie/music stores): Does anyone know of a service where I can pay a flat fee to try songs to see if I like them? At the iTunes Music store, I can't really browse for new music since the 30sec limit makes it impossible to see if the song is good sounding throughout.
try bittorrent , LOL....
stuff you like you buy @ iTS afterwards...
If I may ask an off topic question (since you all seem knowledgeable about online movie/music stores): Does anyone know of a service where I can pay a flat fee to try songs to see if I like them? At the iTunes Music store, I can't really browse for new music since the 30sec limit makes it impossible to see if the song is good sounding throughout.
Mm. True. I believe most of the other Microsoft DRM solutions let you do that, but its my understanding that its not entirely consistent as to what songs are available per subscription and which for purchase. Probably your best option right now? After SingingFish got swallowed by AOL, things got a little dry.
Here's two: Deezer. Originally a virtual ipod, but now a more rounded service: ( http://www.deezer.com/ ) --And Seeqpod ( http://www.seeqpod.com/ ). It is an excellent way to sample music, even better when you have an iPhone on WiFi, there is a custom interface for it.
I believe other illegal services allow more sampling flexibility (Russian sites). I generally despise them so I'll refrain from mentioning them by name.
~ CB
Original Message: by M Paquette on 9/1/2007 4:40:16 PM
NBC-U Statement: "In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers."
Translation:
"If you want to buy The Office, it will be available as a bundle with The Singing Bee and Poker After Dark for only $4.99. Only $1.66 a show! Such a deal!"
Bundling of media is done to promote poorly performing content by attaching it to popular content. Viacom does this in the packaging of cable channels for sale to cable and satellite services. (Want MTV? You're going to get Nickelodeon and TV Land, too.)
idannyb response:
M Paquette and Bernoulli: IMO, you both are on the mark in your analysis of the game that NBC-U tried to run on Apple. NBC-U is reeling under a PR nightmare. Apple's Press Release (response to NBC-U non-renewal on iTunes) just passed 4,800 diggs with many hundreds of comments running 9 to 1 negative on NBC-U. NBC-U?s subsequent counter-response claims "we never asked to double the wholesale price of our TV shows."
Just for fun, here is a bit of role-play (conjecture) re the recent NBC-U/Apple iTunes contract negotiations:
NBC-U: Here?s the deal Apple, we want to bundle show offerings on iTunes and bump the price-point to $4.99
Apple: But you?re taking hit shows and packing them with turds. We understand that you?d like more revenue and this is one way to twist the consumer?s arm ? but it?s not pro-consumer and will only cause NBC-U?s share of iTunes revenue to drop. Dramatically we might add.
NBC-U: Our pricing model shows this will not hurt our iTunes share. Quite the contrary.
Apple: Who?d you hire to do your modeling?
NBC-U: The Enderle Group and Forrester Research.
Apple: (collective roll of the eyes)
NBC-U: Yes ? But that?s none of your business.
Apple: Okie dokie ?
Here?s the deal. We?ll offer your proposed bundles with any packaging combo you?d like ? and at any price point you want ? $4.99 or $5.99 or $59.99 for all we care ? BUT regardless of any bundled offering you propose, we are adamant that consumers have a true choice ? So iTunes will keep the individual shows at a stand-alone $1.99 per episode. That way the consumer can compare your bundled offering/pricing and decide whether they want the package for $4.99 or just the one show they are interested in at $1.99 ? Okay, sounds fair and reasonable? Doesn?t it? We?ll let the consumer decide.
NBC-U: Sorry Apple, we don?t see it that way. Our packages are designed to give the consumer an excellent value of content at a discounted ? Blah, blah, blah ?
Apple: Not the same thing ? The songs were all part of an original album and by the original artists. You are talking about packaging completely different shows tied by some sort of nebulous theme.
NBC-U: Look, you have our position on this matter. You?ve seen our proposed packaging and pricing ? were not asking for permission ? In fact, we are hereby giving you the requisite 90-day non-renewal notice. As you know we have plans for streaming videos through our own Hulu.com website ? we think it?s going to be a compelling offering and so do our distribution partners. Again Apple, we are not asking for your permission.
Apple:
NBC-U: What?s ?triple-B?
Apple: BitTorrent. Boom. Buh-Bye!
I guess the question is: Who is lying, Apple or NBC?
My guess is NBC.
Neither is lying. First, discard the author's bad interpretation of the statement. Then note that NBCU's response to Apple was indirect; it's carefully worded legalese. They didn't refute the 4.99 price. They said "never asked to double" but Apple didn't say NBC asked to double; Apple said "more than double". Read all these press statements very carefully -they're all true, but what's really being said is between the lines.
My conclusion: NBCU asked for flexibility to bundle content and charge a high enough wholesale price so that Apple would charge $4.99 retail. Apple sees bundling in the same way as that of music albums - to get the thing you want, you need to pay for stuff you don't want. So in effect, you get the one thing you want for more than double the previous price.
Also, NBCU asked Apple to crack down on piracy; as Gruber said, this is either that Apple's iPod detect illegal copies and not play them, or having iTunes detect and identify illegal copies. Apple refused to do either, or pay a tax per iPod for that potential illegal content (a la Universal and Microsoft Zune).
In the middle statement, NBCU shows that it simply forgets that without those iPods, tens of millions of people wouldn't pay one cent for the content, since that content can be gotten legally (taped off TV) and illegally for free. NBCU mistakenly thinks that Internet distribution/retailing is so easy that they can treat Apple differently than Wal-Mart, Target, or Best Buy. Maybe because Apple so easily entered into direct retail (Apple Stores and iTunes Store).
And all you Apple fanboys (on this site and others) who say they will "get their NBC content one way or the other (hint hint, wink wink)" should think about the NBC person who says "I will get Leopard one way or the other" too. Pirating Leopard is just as easy, and just as wrong.
Unlike what NBC wants Apple to do, Apple hasn't forced anyone to stop pirating Leopard, nor have they made or asked any sites to check for Leopard.
Even for Tiger, they did so only in the case of breaking NDAs. Once Tiger was released, Apple hasn't stopped anyone. Unlike Microsoft, they have no you-criminal-activation-schemes.
I've read about this on several different sites and after having done so, I believe that it was NBC trying to force Apple to raise rates. Apple refused and decided to drop the publicity bomb on NBC. Apple knew people would be furious at the proposed rate hike from NBC and would voice their opinions loudly. NBC back peddled and tried to save face by using obtuse words like "Attractive" in their statement - being sure never to clarify if their proposal was in fact attractive to the consumer, or attractive to NBC! They could lie to the people and make it sound like Apple got everything wrong.
The trigger for this whole episode was primarily the NYTimes article published on Thursday, and secondarily a CNN article on Friday morning. The leak for the Times article came from NBCU. Why do I say that? Because 1) the article stated NBC's share of video sales at 40% which Apple corrected as 30% in the press release and 2) the article stated that the other networks would be entering the 90-day window and there could be many more defections which Apple corrected with all of the major networks and over 50 cable networks had already signed on again at the same rates. The article would not have had this speculation casting a bad light on Apple if the leak had come from Apple. This latter item basically forced Apple to respond publicly to remove the speculation from influencing its stock price and reputation.
If NBC had simply said on Friday that it was not renewing its iTunes contract due to disagreements with Apple, I don't think Apple would've released a statement. By going public via the leak, and casting aspersions on Apple, Apple had to hit back, and they did with gusto.
But, they are interesting points, and I'd also like to know exactly who said exactly what.
Here they are:
Apple's press release:
"CUPERTINO, California—August 31, 2007—Apple® today announced that it will not be selling NBC television shows for the upcoming television season on its online iTunes® Store (www.itunes.com). The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
“We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”
Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales."
NBC's response: Cory Shields, executive vice president of communications for NBC Universal, disputed these claims in a prepared statement.
“We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers. It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying. In addition, we asked Apple to take concrete steps to protect content from piracy, since it is estimated that the typical iPod contains a significant amount of illegally downloaded material."
why is it that companies today think they can force everything they can come up with in terms of DRM on the consumer???
back in the days of self copied mix tapes and VHS copies no one cared... why should they now???
it's the same approach as in iraq somehow... let no one think freely and force their way of thinking on anyone else... the ones that disagree will the the GITMO treatment...
people buy the legit stuff because of ethics, not because they're forced to...
if the industry treats everyone like criminals and goes "big brother" "1984" style... shouldn't we fight back like we do and completely stop consuming the way the big media companies want us to???
@ least i stopped buying as long as DRM is implemented...
i got my HD media player that plays DIVX/Xvid/h264 up to 1080p without DRM...
and my elgato ATSC over the air HD tuner receives and records HDTV for free...
So, are you saying you'd take a cut in salary for the work you do? Say, 1/10th of what you're getting? I agree that the talent has no control over the final pricing most of the time (and almost never get the lion's share of the money), but they still have to get paid.
Why is it that intellectual property is somehow deemed free? Don't the musicians, film makers, etc. need to get paid? It's like saying we should sell cars for $100 dollars. Really, it'll be the factory workers who take the cut, not the company heads. $1 for CD's, DVD's, etc.? How do you pay the people who make them?
I don't know about $1, but when the "cost" of the delivered product amounts to amortizing some servers and buying some bandwidth, there is a price point which will encourage enough volume to optimize sales and royalties to content creators.
When companies first started to release videos for sale instead of just rental the price disparities between movies that cost about the same amount to make was staggering. $29 (or more) for one $14.95 (or less) for another, and eventually a range of points were found, or at least they thought it was found. What WAS clear though, as with today's situation, was that the prices had little to with the costs of physically producing and distributing the tapes, and everything to do with finding out what the market would bear, and at what price discount from that volume would more than make up for the lower per unit profit.
With DVD's we began to get "extras" -- sometimes an extra disc of them, director's cuts, limited editions, sets, and other variants that would generate a higher markup by pandering to the true fans of the material, much more than adding any real value to the sale.
I'm not for regulation, but I am for pushing for companies to make their products available to more people over a greater range of of income so that there's a win-win: Creators and even parasitic suits make more money on volume and more people who want to see the shows and movies get to, and the illegal distributors get squeezed, fewer computers get malwared from P2P sites, less young adults become inured to stealing content with no moral qualms, etc.
The logic is simple, but dinosaurs, e.g., studio execs have difficulty adapting to environmental changes. Where's a metaphorical giant asteroid to wipe 'em out so that warm-blooded mammals can take over??
After Apple and Creative came to an agreement, the concept was that Creative was now free to sue others, with Apple benefitting as company "C". Each company Creative sued that lost, would have resulted in a diminution of Apple's $100 million agreement.
Interesting. And not entirely uplifting, if true.
Hey, why are you getting down on the people who are making the content? They're not the ones doing this; in fact, a lot of them are on the side of the angels. And most of the gaffers I know in TV and movies don't make 120K. You must know some really veteran gaffers with major seniority and a great exchange rate.
Not entirely... scale payment for a union gaffer on a feature film is 2078.73 a week. A gaffer wouldn't have to work too far up the ladder to get to $3000.00 a week and work 40 weeks of the year. But I do have to disagree with the original poster that the gaffer doesn't deserve this much... really he is a vital role. An artist if they are good.
- video capable iPod sales are strong in Europe, and this is NOT connected in any way to legal downloadable video content on iTMS (there isn't any here!!)
- quality of video sold on iTunes is "sub DVD". This basically means that prices have to be "in connection" with the benefits (ease of use, portability, flexibility). You can only charge a certain amount for that, not an indefinite, otherwise people will no longer see the benefit and look elswhere.
- NBC will suffer delay, people are not going to be able to watch their seasons from the start on Hulu.com (server crashes, bugs, etc.). Their platform has NOT EVEN BEEN RELEASED IN BETA prior to launch. Think about how many issues they will have! So people will feel cheated and more ripped off.
- Basical Hulu.com will be even more of a lock in for people. They will have stronger DRM, you will only be able to purchase NBC and ABC shows (nothing else, no music, no movies, nothing besides THEIR OWN CONTENT).
- Apple is making a lot of money, their model has proven to be successful. NBC and the others are struggling for their bottom line. Instead of asking themselves the reasons, they look at iTunes like the new cash cow, forgetting that there STILL are the free alternatives.
Apple is not "the good", but it is acting certainly more in favour of customers.
NBC and the other companies also forget that there is a lot of untapped markets (Europe and Asia come to mind) in which, if they break the deal with Apple, they will never be able to make money on iTunes. iTunes will be more than happy to make (if they are smart enough) content deals with European producers in Europe. People will be able to buy all European produced series on iTunes, plus major US series (excluding NBC's). So, at the end of the day, NBC might be in a position to loose huge amounts of money. But that goes beyond what we are talking here.
I remember that, in 2002, I worked at Paramount. Somebody (IN 2002!!!!!!!!!!!!) asked me to check where their TRAILERS where streamed illegaly to have a glimpse of the market.
I went to my boss and told him "why do you bother with tracking trailers when there are plenty of sites that allow you to download entire movies?". They didn't have a clue. And that was 2002. How can such managers be responsible of decisions when they have:
a) fear of innovation
b) no intention whatsoever to act in the long term (stock options last less than 4 years)
c) no idea of what technology is and how it works
They have plenty of "outsourced experts" because smart, tech knoledgeable people seldom work for these jaggernauts in which decisions take ages to be taken and there is always someone high up who has a "friend" that does things better (think Hulu.com, why not iTunes??? WHY HULU????). Smart, knowledgeable tech people work for Apple and the likes (Silicon valley is full of them).
The "outsourced experts" mentioned above always (since they are outsourced) have their own agenda and try to sell these guys stuff...
The movie company mentioned above, didn't even have a single person responsible for overseeing the movies' internet sites, just a dozen or more small companies each in charge of their own site. How can you manage that? Took this company some years to figure out they needed a new internet site because the old one was designed in "Front Page" like style.
I mentioned this, because I worked there, but guess others are the same.
Sorry for the long post.... I'll not write for the next 3 days...
I think you don't get it. If NBC can sour this market, they can make their other venues seem more popular. They set to make more money from endeavors like Hulu, but only if they can attract a large audience. If they can confuse the iTunes market enough, by charging variable pricing and making people hunt for "bargains" they'll come running to Hulu. At least that's the theory.
And its completely in their right to do what is BEST FOR THEM. What, do you think NBC, Apple, or any company, is looking out for YOU'RE best interest?
Do you know why they sell those DVDs for $20-$25? Because there are people who will buy it.
Wow, thanks for clearing that up.
Wow, thanks for clearing that up.
But its up to the people who produce the content to decide what they want to sell it for. Its up to the consumers to decide what to pay for it. If you don't like the price (and you don't), don't buy it. But just because you don't, that doesn't mean there aren't people who will.
Simply brilliant. Here's another scenario. The content industry was engaged in a series of money-losing enterprises, and iTunes came along with a simple format and flat pricing scheme that has won throngs of customers. It's been this way for YEARS now. It's the ONLY format that has been phenomenally successful. iTunes doesn't carry every content under the sun... do you realize this?
You can be sarcastic all you want, but you're original quote on seeing $20 DVDs was something like "Are you HIGH?", implying that the pricing was incredibly stupid and no one would buy it (maybe you were asking that of the people buying it, I don't know). But you seemed utterly confused that someone could charge $20 for a DVD.
As for the content industry being in a series of money losing enterprises, that's just garbage. You make it sound like TV studios were about to go belly up if it weren't for the advent of videos on iTunes. The studios already were raking in tons of money, both from producing content for distribution on TV and in theaters, to, then PPV broadcasts, followed by DVD sales. TV, especially, has seen DVD sales push their profits where they'd never been before (obvious proof of this is just look at how every TV show, no matter how stupid or inane or completely unpopular, still ends up on DVD). On-line video sales is NOT the "ONLY format that's been successful".
Here's a secret. Not every TV show and existence appears on iTunes. They only list the ones that agree to sell for $1.99 cents per episode. Whether its a tv show, music video, or short movie consumers can count on that $1.99 price point. If you want variable pricing, maybe some content simply isn't available on iTunes... maybe you need to buy it on Amazon. Feel free. I'll stick with using iTunes and their signature stand on value. If someone wants "flexible" pricing and higher fees, they can take their product elsewhere. Chicken and egg. iTunes is popular BECAUSE of its simple value proposition.
So you're philosophy is "If the price isn't the same for everything, I don't want to deal with it!" That's nice, but that doesn't mean people have to follow by your idea of this.
It is IDIOTIC to think that iTunes is popular and therefore can pour ANYTHING into its store, and let the market decide. Stores like Trader Joe's and Walmart (on the larger scale) are VERY sensitive to the pricing of products they allow in their store. For instance, Walmart is clearly waiting for stand alone HD players to come under a certain price before offering them. Should they let the consumer decide and offer EVERYTHING? No. If presented with unsavory options it would reflect DIRECTLY on the store.
You're using Walmart as an example? OK. The reason Wal-mart won't put more expensive stuff in its stores is because they know their clientele can't afford it! Plain and simple. That's why Macs will never sell in Wal-mart. People go there to buy tube socks and toilet paper. They don't go there to spend a ton of money.
You're confused already. If Walmart constantly listed high end pricing and low end pricing, people wouldn't go there as often. They go to Walmart for a consistant value proposition. For high-end products, they simply shop at a different store. Like Lord & Taylor or Macy for high end clothes. Right?
What? Are you saying that people would stop going to wal-mart to buy $2 tube socks because they also list a $500 HD player? I'm just amazed how stupid you apparently consider the American consumer.
And if I want to sell something at Wal-mart and they want it for a lower price, I have the option of walking away. Just like NBC. Does that mean, all of a sudden, that my product is crap and I'm going to lose my shirt? No. But you make it sound like its Apple right to force NBC to a pricing scheme they don't want to subjugate to.
In fact, many people will tell you that the reason they charge such low prices is Wal-Mart is so big as to literally be able to twist the arms of its suppliers to lower prices. Who cares how it affects the actual company, its workers (more jobs shipped overseas) or their bottom line. Its all about Wal-Mart wanting lower prices. And why do they want that? For the benefit of the consumer? Ha! Its all to make Wal-Mart more money. Plain and simple.
Now, replace Wal-Mart with Apple. Same story. But people here won't believe it, because they bleed Apple, and can't believe Apple is in business for themselves, not their customers.
Hm. Actually in the real world, there are these things called "dollar-stores". You may have heard of them. When you're there, there is a specific break-down of goods that you can by at a consistant price. It's how certain markets are built, based on a simple value proposition for customers.
So what you're saying is that people go to the dollar store because they're too stupid to decide on the price of an object at a Wal-Mart? And if, say, everything in a dollar store is a $1 (yes, I know they're not, I'm trying a simplistic example), do the customers just buy everything they see because the price is $1? No, they still make value judgements. "Is this Slim Jim worth $1" People go there knowing that the price isn't going to exceed a $1, but they're still not just going to accept the price as displayed if they feel its not worth it.
In comparison, I have the same feeling with the iTMS and songs. There are some songs I'll pay a $1 for. Others I will not. Maybe 50 cents. But not a $1.
And so far you've compared the iTMS to Wal-Mart and Dollar stores. Man, who knew Apple appealed to such a low-end crowd. I thought they were a high-class store like Macy's.
If you don't understand the way movies are priced on iTunes (according to release date), then I won't help you out. You're being very lazy.
OK, now you're just being hard-headed. I do understand the pricing of movies on the iTMS. My point is, and try to follow, all movies are NOT priced $10. New releases are priced higher. Why? Oh, wait, because their new? There might be more demand for them, so they charge a higher price to MAKE MORE MONEY?
But if Apple can variable price movies based on release date, and you are apparently OK with that, what's wrong with variable pricing TV shows? How is last night's episode of Heroes just coming out different then the release of "Cars"? Why not let them charge more for it the first week or two its out? Why are you giving movies the "OK, they can sell for more", but with TV shows its "OMG, how dare they!"
By offering up a TV Show the next day from when it aired, you're basically offering up a service. When anything comes out new, it usually costs more then later on (esp. since those who want it the next day probably are those who really want to see it).
You also give no account to the cost of poducing a show. If Heroes costs twice as much to produce as "The Office", why should each be priced the same? In fact, don't you feel cheated knowing you're paying the same price for a 20 minute sitcom vs. a 45 minute drama? And, as an example, not all shows are $1.99. I was looking at Battlestar Galactica, which costs $1.99 per episode, and went, "Hey, let me go check out that 4 hour pilot". It cost $17. Not $8. Not $6 (since it really was just 3 hours), but $17. For four 'episodes'. Hmmm. Seems like Apple had no problem there charging more for it (BTW, because I have free will, am a semi-intelligent person, and can make decisions on my own without having to rely on stuff like "everything at one price!", I made the decision not to buy it. But it was my decision, not Apple's for refusing to sell it to me).
A friend of mine considered putting her music on iTunes and went ahead with it, for exposure. She'd been selling her album off of her website for $12.99. iTunes pricing was $9.99. She weighed the benefits, and the clear optimizations of non-physical distributions, and thought it more than made sense for her music.
Maybe you're friend should realize that albums don't cost just $9.99 on iTunes. A lot cost more then that. More of that variable pricing that Apple allows, when it suits them. And 99 cent songs are same-priced, except of course, where Apple doesn't let you buy the song individually (because, say, they have some internal preset limit that says "Any song over 6 minutes can't be purchased separately" or because it would then mean the album couldn't sell for $10 or for many other reasons).
And, if you noticed, Apple has sales. $8 for an album. And some albums are less then $10 because they have less then 11 songs on them. So if you're looking for albums, you do NOT know how much it'll cost. And now with iTunes Plus, you really don't know songs are 99 cents. Some might be $1.29. But no one knows what songs those are, because 99% of the people have no clue what label produces what artists.
If all song tracks were available for the same price, consumers could make a purchase decision before they even opened the iTunes application. Same way for tv shows. --Ok, I'll help you out... with movies, if its a new release, you can pre-order it for $12.95, or buy it for $14.95 in some cases. Most all other movies are $9.99 (library items, movies that have been in publication for some time).
OK. But you make the assumption the user KNOWS that a movie is just released, and that's why the price is high. They still have to go to the store to see what the price will be. As you say, "you can buy it for $14.95 in some cases". SOME cases. Not all new movies, then, are $14.95? What's the divining line. When does the price lower? You're not going to know this before you go there.
But, I'm sorry if you don't understand this, but there's as much stuff on the ITMS that is already variable pricing as fixed pricing. Very little in the world is fixed price ("Hmm, let me see, for $20000, do I want the Hyundai or the Lexus"). I have no problem with NBC wanting to try something different.
From another board
Original Message: by M Paquette on 9/1/2007 4:40:16 PM
NBC-U Statement: "In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers."
Translation:
"If you want to buy The Office, it will be available as a bundle with The Singing Bee and Poker After Dark for only $4.99. Only $1.66 a show! Such a deal!"
Bundling of media is done to promote poorly performing content by attaching it to popular content. Viacom does this in the packaging of cable channels for sale to cable and satellite services. (Want MTV? You're going to get Nickelodeon and TV Land, too.)
idannyb response:
M Paquette and Bernoulli: IMO, you both are on the mark in your analysis of the game that NBC-U tried to run on Apple. NBC-U is reeling under a PR nightmare. Apple's Press Release (response to NBC-U non-renewal on iTunes) just passed 4,800 diggs with many hundreds of comments running 9 to 1 negative on NBC-U. NBC-U?s subsequent counter-response claims "we never asked to double the wholesale price of our TV shows."
Just for fun, here is a bit of role-play (conjecture) re the recent NBC-U/Apple iTunes contract negotiations:
NBC-U: Here?s the deal Apple, we want to bundle show offerings on iTunes and bump the price-point to $4.99
Apple: But you?re taking hit shows and packing them with turds. We understand that you?d like more revenue and this is one way to twist the consumer?s arm ? but it?s not pro-consumer and will only cause NBC-U?s share of iTunes revenue to drop. Dramatically we might add.
NBC-U: Our pricing model shows this will not hurt our iTunes share. Quite the contrary.
Apple: Who?d you hire to do your modeling?
NBC-U: The Enderle Group and Forrester Research.
Apple: (collective roll of the eyes)
NBC-U: Yes ? But that?s none of your business.
Apple: Okie dokie ?
Here?s the deal. We?ll offer your proposed bundles with any packaging combo you?d like ? and at any price point you want ? $4.99 or $5.99 or $59.99 for all we care ? BUT regardless of any bundled offering you propose, we are adamant that consumers have a true choice ? So iTunes will keep the individual shows at a stand-alone $1.99 per episode. That way the consumer can compare your bundled offering/pricing and decide whether they want the package for $4.99 or just the one show they are interested in at $1.99 ? Okay, sounds fair and reasonable? Doesn?t it? We?ll let the consumer decide.
NBC-U: Sorry Apple, we don?t see it that way. Our packages are designed to give the consumer an excellent value of content at a discounted ? Blah, blah, blah ?
Apple: Not the same thing ? The songs were all part of an original album and by the original artists. You are talking about packaging completely different shows tied by some sort of nebulous theme.
NBC-U: Look, you have our position on this matter. You?ve seen our proposed packaging and pricing ? were not asking for permission ? In fact, we are hereby giving you the requisite 90-day non-renewal notice. As you know we have plans for streaming videos through our own Hulu.com website ? we think it?s going to be a compelling offering and so do our distribution partners. Again Apple, we are not asking for your permission.
Apple:
NBC-U: What?s ?triple-B?
Apple: BitTorrent. Boom. Buh-Bye!
zzzzzzzzzzzzzzzz
Not entirely... scale payment for a union gaffer on a feature film is 2078.73 a week. A gaffer wouldn't have to work too far up the ladder to get to $3000.00 a week and work 40 weeks of the year. But I do have to disagree with the original poster that the gaffer doesn't deserve this much... really he is a vital role. An artist if they are good.
It was more the 40 weeks per year that's the limiter, generally (and the only union jobs part). And I have nothing but wonderful things to say about my gaffers, but I didn't want to get into how much they and the rest of the crew are worth their weight in gold. Everyone thinks crew are unskilled people that just stand around doing nothing (quite the opposite).
strange that in the times of the tapes and walkmans the media industry made money, more more than today...
why is it that companies today think they can force everything they can come up with in terms of DRM on the consumer???
back in the days of self copied mix tapes and VHS copies no one cared... why should they now???
It seems to me that only a retarded person would compare "mix tapes" and "VHS copies" to the ease, quality and choice that BitTorrent (and its ilk) provide.
So, my question to you is this: Are you retarded?
Personally I don't see how this paints Apple as anything but vindicated. To try and shift the blame on iPod sales vs. paying more than you do for a better quality DVD is ridiculous. We are talking about free programming, and they still want to charge more than $1.99. They could eat my ass, and I'd still not pay a dime for a free show. What TF do iPods have to do with charging more for a digital download than it does for a better quality DVD anyway? Not a damn thing. NBC is totally unrealistic about the value of what is actually free programming. They are lucky anybody is buying that shit at all, and now they decide that it may be the opportune time to rape you for it. ?u¢k them!
There's no such thing as free programming. Each half-hour program, at least here in the Us, and I imagine Canada, has only 22 minutes of actual program. You can see this very well by looking at the actual times of the shows in iTunes. That's what is left after the commercials are removed.
When I was a kid, I had to run to the bathroom, and back again, to not miss the show as it came back after the ad. Now, you take a stroll around the block.
Don't be so quick to agree. Notice what we're talking about. Until iTunes, you could NOT buy a single track of music unless the company had published the song in the format called, aptly... a "single". The single died for a number of reasons, mostly, it wasn't financially viable from the manufacturing end.
Prior to iTunes, you couldn't purchase a single episode of a TV Show, or a single music video. These are NEW products that have only previously been available in aggregate. Apple still has provisions for variable pricing on "seasons" or "albums". It's still there. Most music albums are $9.99, but some aren't. What Apple doesn't practice variable pricing on, are the smallest increments of their sales. These are things that represent "impulse buys" for most people.
iTunes enjoys many thousands of impulse buys every hour of every day. They regularly have sales on music albums and audiobooks, further creating "attractive" values for consumers. The idea of futzing with the pricing on their "impulse buy" products, is fairly silly if you think about it. It's like McDonald's having a dollar menu with $1.30 items speckled throughout it. Also, its important to note, that uniformity of pricing works for and against. It means that while you can get most all library title movies for $9.99, some movies that are clearly not popular, ALSO cost $9.99, where they might otherwise go at 2 for $9.99. I think the trade-off is perfectly fine though. Sometimes, simply NOT BUYING something, doesn't really send a specific message. That's where popular retailers come in to encourage better value from their sales experience and customer feedback.
If iTunes has strict pricing requirements in specific sections of its product catalog, its their prerogative. Some items to a business structure aren't negotiable. This just means that we won't see certain products on iTunes. I think that's perfectly fine. The comments people make that this is "wrong" strike me as really strange though. It's like getting mad at Walmart because they won't carry Bose sound systems. Or criticizing McDonald's for not carrying shrimp or caviar. If a certain movie is determined by a studio to cost $20, and it can't stomach EVER selling it for $9.99, *even if* they aren't paying physical costs, that's fine. Don't sign with iTunes. More than a few people laugh at Amazon for listing new movies at $21.99 digital downloads, when the DVDs cost exactly the same, and allow much more playback flexibility, content and value. --But the studios are very scared of undermining their soundscan numbers and need to be strongly encouraged to embrace the new realties in the marketplace. That's my opinion. I don't blame them, but no one said transitioning to the future would be easy.
Exactly.
~ CB
I understand what you're saying. It's been written about in all the financial papers, and music magazines, as well as every website, including this one, for years now.
But, I'm old enough to remember singles very well. singles died out for several reasons. Economics was just one of them.
The main reason had nothing to do with that. It was that music was changing. Where before, an album was just a collection of songs, in the late sixties, it became a message. Bob Dylan, the Beatles, and others made albums that really needed to be bought as a unit.
In addition, the songs, which before were rated on the Tv rock and roll shows as better because "You can dance to it", became popular more because you could listen to it. Themed albums became the norm. Breaking them up didn't work as well, and people simply stopped buying singles.
In fact, the CD helped to destroy singles as well. But, that was inadvertent. You apparently don't remember them, or perhaps you were too young, but the industry bemoaned to loss of the single as an instrument of sales. Several times they attempted to bring back the single with the CD Single, often, a 3.5", or so, product, but the public wasn't interested. I have a number of those.
Then the industry forgot about the single, and began to rely on CD album sales.
Now, they aren't happy about the return of the download single. Things go around. Apple is trying to encourage the purchase of albums, and indeed, in the past 18 months, or so, the sales rise of whole albums has exceeded the sales rise of singles.
I would suppose that with themed albums, which artists often like to make, breaking them up to sell individually, would be like selling a book by the chapter.
So, I do think that going to Barnes & Noble is similar to buying from iTunes, if you think of a song as you would a book, and an album as you wood a themed series of books. Of course, books cost more.
Unlike what NBC wants Apple to do, Apple hasn't forced anyone to stop pirating Leopard, nor have they made or asked any sites to check for Leopard.
Even for Tiger, they did so only in the case of breaking NDAs. Once Tiger was released, Apple hasn't stopped anyone. Unlike Microsoft, they have no you-criminal-activation-schemes.
It isn't quite the same thing. I remember when Apple used to give away their OS upgrades. That stopped with System 7, I believe, when Apple realized they could make money from it just the way MS did.
But, with Apple, the hardware is the thing. If you do pirate the OS, where are you going to use it other than a machine that was purchased from Apple at some point, for far more money than the OS goes for?
I guarantee you that if Apple ever did license the OS to the public at large, as so many want Apple to do, they would be just as restrictive as MS is now, possible more.
They are in business to make money, not give their product away.