"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."
Yes, I read all that. What I meant was what they had said to each other in private.
What did NBC actually ask Apple to do, and exactly what was Apple's response.
These public statements are just spin, as we all know. They aren't the actual positions made to each other behind closed doors, which are likely still being discussed, and modified.
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...
One reason they made more money then was because there was actually very little copying going on, and most of that was pretty bad quality.
I remember the fear the industry had when the first CD's came out. But, it was ameliorated by the fact that CD writers cost $9,000, and the disks cost $100 apiece.
When the price of the writers came to the public, they still cost $1,000, or more, and the disks cost over $25 each. It still didn't pay to make copies.
But once the prices started falling, that changed. The popular use of the internet made the cost in dollars, and time, almost zero.
The fact that more people are buying DVD's for home theaters caused less people to spend on music, as most people feel that $15 to $20 for a movie for their home theater, where friends and family can watch, and listen, is a better buy than a music CD, where it's much more an individual taste.
Of course, even DVD sales have been suffering a decline, partly due to bit torrents, and partly due to HD Tv becoming more popular.
But, the public at large doesn't care in the least about DRM.
It's like McDonald's having a dollar menu with $1.30 items speckled throughout it.
Sounds like you're talking about the Dollar and A Little More menu.
I just looked at their web site and couldn't find it, but every ad I see for it these days now calls the Dollar Menu, but the voiceover talks about how it has great products for a dollar or a little more. I'd have to go into a McD's to see for sure, but I'm not willing to risk falling off the wagon and do that
Those unbelievable greedy bastards at NBC! Apple spoon feeds NBC a new revenue source, over and above their usual commercial contracts, and now they want even more.
They are too stupid to realize that they will sell more shows and make more money if they keep the price low.
They will not make more money, apple will sell more video ipods while NBC gets no say in how their assets are sold, is what you meant to say.
It is true. It was in the agreement, and discussed freely over the internet and the NY Times and WSJ.
I'm not quite getting this.
Are you saying that as part of the settlement with Creative, Apple somehow stipulated that Creative would be free to sue other parties? How does that work?
My impression was that it was considered shrewd for Apple to have settled, since it meant they would have clear rights to iPod UI elements going forward, and if anyone else ran afoul of Creative's lawyers, all the better for Apple (which, AFAIK, hasn't happened).
But that's not really the same as the the scenario being described, wherein party C encourages the behavior of party A, by clandestine means, in order to enjoy collateral benefits. It's just Apple making the best of the existing situation.
Unless we are theorizing that Apple actually paid Creative to sue them, or that settling a lawsuit out of court is now considered manipulative and Machiavellian?
They will not make more money, apple will sell more video ipods while NBC gets no say in how their assets are sold, is what you meant to say.
It's really hard to say, but generally, lower prices do mean more sales. Often enough, though not always, the increased sales nets more than they would have if the prices were high. Movies used to cost $80 or more to buy outright. It turns out that selling them at $20 or less basically enabled a huge industry to explode out of what was once practically nothing.
iPods seem to sell well enough even in places where iTunes doesn't offer videos.
Are you saying that as part of the settlement with Creative, Apple somehow stipulated that Creative would be free to sue other parties? How does that work?
My impression was that it was considered shrewd for Apple to have settled, since it meant they would have clear rights to iPod UI elements going forward, and if anyone else ran afoul of Creative's lawyers, all the better for Apple (which, AFAIK, hasn't happened).
But that's not really the same as the the scenario being described, wherein party C encourages the behavior of party A, by clandestine means, in order to enjoy collateral benefits. It's just Apple making the best of the existing situation.
Unless we are theorizing that Apple actually paid Creative to sue them, or that settling a lawsuit out of court is now considered manipulative and Machiavellian?
No, I'm saying that Apple doesn't have to give permission to Creative, but that the $100 million gave them the money to do so. The contract stipulates that if Creative sues others, and wins settlements, Apple is entitled to a certain amount back from Creative, which would, of course, be less than Creative would get from the other settlements.
The assumption here, coming from that agreement, was that Apple settled for such a large amount, because it meant little to them these days, but could stand as a mark against which other agreements would have to be judged, and would also be enough, not to only help finance Creative's possible other lawsuits, but to help them stay around to initiate them.
While we don't know what was agreed to other than what was made public, the agreement where Apple gets money back in those situations was considered to be very odd, as that's not a normal procedure.
While this was a public settlement, to be sure, it certainly is clandestine in its intent.
There is no difference here than MS investing in SCO with the intent of giving them the financing to sue others, which they were already doing.
Your saying that if Apple paid Creative to sue them, that would have been equivalent, is wrong. MS didn't pay SCO to sue them.
i don't believe that. Show me i'm wrong if you can.
I think you are right. For me, the base cost of the transaction is $0.10, and then it's an additional 2.5% to 5%, a bit higher for AMEX, ~6% (do they accept that?), depending on the card, transaction volume and other factors, so you can figure maybe $0.12 to $0.16. It's possible Apple has special deals.
I really don't feel like posting a copy of the statements, it's somewhat sensitive paperwork.
Of course, even DVD sales have been suffering a decline, partly due to bit torrents, and partly due to HD Tv becoming more popular.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART. Like several posters said previously in this thread, it's a free market economy. If the price is too high, people won't buy. Guess what? They're not buying.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART.
It sounds like maybe you dug up the high def version. I doubt WalMart would only take $2 off the list price on a movie. It might be a misprice, but I don't remember any new release other than HD or super deluxe with physical goodies edition selling for more than $20 US.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART. Like several posters said previously in this thread, it's a free market economy. If the price is too high, people won't buy. Guess what? They're not buying.
That sounds high to me, but it's possible. Often there are two versions, the regular one, and a special with more extras, for more. I often buy those editions.
I think you are right. For me, the base cost of the transaction is $0.10, and then it's an additional 2.5% to 5%, a bit higher for AMEX, ~6% (do they accept that?), depending on the card, transaction volume and other factors, so you can figure maybe $0.12 to $0.16. It's possible Apple has special deals.
I really don't feel like posting a copy of the statements, it's somewhat sensitive paperwork.
Typically MC/VISA will take roughly 2.0-2.5% of a transaction depending on volume. Your middle man merchant API provider (Autorize.net, Payflow Pro, etc) that is providing the interface will also take another 1-2% again depending on volume and the contract. So a range of 4-5% will go to the provider.
Music labels like Universal (UMG) take 50% of the sale and for the independent and lesser knowns will take anywhere from 25%-40% of the sale.
What really happened: NBC wanted to raise prices, Apple did not. Apple 'leaks' the news that nbc is threatening dropping their content from the iTMS for the above reason. NBC craps their pants and the next day releases to the press that this is not the case and they will still offer it at the same price. Their stock-holders are happy as there was little damage done since the markets were closed. Everyone else says 'eh'.
It's really hard to say, but generally, lower prices do mean more sales. Often enough, though not always, the increased sales nets more than they would have if the prices were high. Movies used to cost $80 or more to buy outright. It turns out that selling them at $20 or less basically enabled a huge industry to explode out of what was once practically nothing.
iPods seem to sell well enough even in places where iTunes doesn't offer videos.
Jeff. I agree with you. Lower prices can lead to more sales.. what I am saying is that there is no way to find out what the correct price point for videos are if apple insist on 1.99 per video. It probably sure ain't 4.99 but it aint 1.99 either. Apple is asking NBC and every other studio to leave money on the table. Why should they agree to this in perpetuity?. Also, yes ipods sell well where itunes does not offer videos but you do understand why apple offered vidoes in thr first place right?. It's to increase the value of ipods (ie, now my ipod can do lot more stuff).. They can then charge more for an ipod or keep it the same price even though component cost is lower. I know what Apple is getting out of this arrangement.. what exactly NBC is getting out of the arrangement, i am not sure. They may contend (rightly too) that they could make more money if they raised the prices of some of the most sought after videos.
Think about it. If you owned something and then went on ebay to sell it but ebay restricted how much you can sell it for, would u continue to use ebay?. What if you had lots and lots of this something (unlimited amount).. would you still want to sell on ebay if they stated you can only sell for a specific price?. of course not!!. Would you not want to find out on your own exactly how much consumes are willing to pay instead of having ebay tell you?.
Imagine further that you have a hot in demand red, convertible and i have some old beat-up 1995 car but ebay insisted we both sell at the same price. Obviously, i am making out on that deal but you are getting robbed. Sure, more people would want to buy your hot red car (everyone likes to get something for nothing..) but that is not the point.. now imagine you have tons of hot red car.. sure more people would buy them if you sold them at the same price as my beat up old car but is that your goal?. Don't you already know if you sold your hot new red car at twice the price of my old beat up car, you'd still get customers?.
I know this is not a perfect analogy but new hot in demand music by definition is worth more than old, who gives a damn, unpopular music (The higher the demand, the higher the price the market will bear).
Apple is asking NBC and every other studio to leave money on the table. Why should they agree to this in perpetuity?...
Think about it. If you owned something and then went on ebay to sell it but ebay restricted how much you can sell it for, would u continue to use ebay?. What if you had lots and lots of this something (unlimited amount).. would you still want to sell on ebay if they stated you can only sell for a specific price?. of course not!!...
Problem with that analogy is that ebay is the market. Sure, you can leave ebay. And NBC can leave iTMS. But they won't because leaving money on the table is better than not having a seat.
We're in an era when content has been crappy for so long, and people don't want to pay anymore. Sure, Heroes was good, but for every Heroes, Office and 30 Rock, there are a dozen bad bets that only last 5 weeks. And whats worse, we dont know what the bad bes are at the beginning of the season! So rather than sitting and Tivo-ing everything, folks are shifting away from being able to get all content on demand (tivo) to being able to select and buy limited content. Apple broke ground in this area, and hence has the power.
If NBC was truly confident that they were producing 'hot red corvettes' then they would leave and distribute their electronic media without iTMS. But they WONT, because right now delivery method matters more than content (which is why even the worse garbage sells on iTMS). Some will follow, but most will say 'eh... oh well.' and watch it on TV.
I personally LOVE to see Apple flexing its little baby muscles. Its a shrimp compared to the evil empire GE, but when it comes to digital media, (to quote MC Hammer) GE/NBC 'can't touch this'. They're getting us on the front end (via inflated ipod pricing) but saving us $$ on the back end at the expense of NBC. YES!
Problem with that analogy is that ebay is the market. Sure, you can leave ebay. And NBC can leave iTMS. But they won't because leaving money on the table is better than not having a seat.
We're in an era when content has been crappy for so long, and people don't want to pay anymore. Sure, Heroes was good, but for every Heroes, Office and 30 Rock, there are a dozen bad bets that only last 5 weeks. And whats worse, we dont know what the bad bes are at the beginning of the season! So rather than sitting and Tivo-ing everything, folks are shifting away from being able to get all content on demand (tivo) to being able to select and buy limited content. Apple broke ground in this area, and hence has the power.
If NBC was truly confident that they were producing 'hot red corvettes' then they would leave and distribute their electronic media without iTMS. But they WONT, because right now delivery method matters more than content (which is why even the worse garbage sells on iTMS). Some will follow, but most will say 'eh... oh well.' and watch it on TV.
I personally LOVE to see Apple flexing its little baby muscles. Its a shrimp compared to the evil empire GE, but when it comes to digital media, (to quote MC Hammer) GE/NBC 'can't touch this'. They're getting us on the front end (via inflated ipod pricing) but saving us $$ on the back end at the expense of NBC. YES!
You haven't been paying attention. NBC does plan to leave. They cannot create a service overnight. Yes, they wanted to stay with Apple because apple already had the distribution channel but that does not mean they can't and won't develop their own distribution channel. If you read the original article, you would see that they plan to.
NBC will soon find out who needs who more. Apple needs them or they need apple but I think they are right in attempting to find this out. To cede your assets to another company without a fight seems kinda stupid to me. If they discover apple is the best way to go, they will return, if not, apple will have to change cause other media companies will follow suit if they see NBC successful without Apple. Either way, we will learn shall we not?.
You haven't been paying attention. NBC does plan to leave. They cannot create a service overnight. Yes, they wanted to stay with Apple because apple already had the distribution channel but that does not mean they can't and won't develop their own distribution channel. If you read the original article, you would see that they plan to.
They plan to leave? When? I didn't read that. I saw this:
Quote:
Originally Posted by AppleInsider
"We want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December," said Shields. "Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com."
Hmmm.. I dont think they're going anywhere any time soon. It looks to me like they tested the waters, Apple held firmly, and now they are retracting.
I do realize that they have a right to test the waters, but my point is that they are feeling the result of 1) years of crappy programming, and 2) a distribution network in iTMS that is more powerful than they could have imagined at the onset. They want a bigger peice of the pie. Thats ok, but you ain't gonna get it easy.
Sure, test the waters and experiment with pricing. Build and maintain a new distribution channel. Find that perfect price that maximizes profits. In the meanwhile, lose a viable earnings stream in the iTMS. Create bad vibes with your fans who like purchasing the content at iTMS at 1.99 per episode. Thats bad advice if you ask me.
Heres another idea... give low-quality versions out for free on google video. Sell Standard Def versions on iTMS. See how many people care about quality. If iTMS sales don't suffer, then offer HD versions on a proprietary channel at a slighlty higher price. If that works, then you've succeeded in differentiating your product from iTMS. You've also proved that people are not buying these episodes just because its just really easy to click 'buy', which is probably the real answer here!
Its obvious people feel strongly about this (as evident from the name-calling and long posts above). I think just the mere fact that we are all on this forum means that we are all interested in this. I personally vote for cheap, high-quality, DRM-free content. If i need to choose 2, i'll go with high-quality and cheap. So if NBC is up for raising prices, bundling, whatever, i say go to heck. Where's that link to EyeTV?!
Comments
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."
Yes, I read all that. What I meant was what they had said to each other in private.
What did NBC actually ask Apple to do, and exactly what was Apple's response.
These public statements are just spin, as we all know. They aren't the actual positions made to each other behind closed doors, which are likely still being discussed, and modified.
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...
One reason they made more money then was because there was actually very little copying going on, and most of that was pretty bad quality.
I remember the fear the industry had when the first CD's came out. But, it was ameliorated by the fact that CD writers cost $9,000, and the disks cost $100 apiece.
When the price of the writers came to the public, they still cost $1,000, or more, and the disks cost over $25 each. It still didn't pay to make copies.
But once the prices started falling, that changed. The popular use of the internet made the cost in dollars, and time, almost zero.
The fact that more people are buying DVD's for home theaters caused less people to spend on music, as most people feel that $15 to $20 for a movie for their home theater, where friends and family can watch, and listen, is a better buy than a music CD, where it's much more an individual taste.
Of course, even DVD sales have been suffering a decline, partly due to bit torrents, and partly due to HD Tv becoming more popular.
But, the public at large doesn't care in the least about DRM.
Please don't bring Iraq into this.
Interesting. And not entirely uplifting, if true.
It is true. It was in the agreement, and discussed freely over the internet and the NY Times and WSJ.
zzzzzzzzzzzzzzzz
I was going to comment on that post, but you've said it all!
It's like McDonald's having a dollar menu with $1.30 items speckled throughout it.
Sounds like you're talking about the Dollar and A Little More menu.
I just looked at their web site and couldn't find it, but every ad I see for it these days now calls the Dollar Menu, but the voiceover talks about how it has great products for a dollar or a little more. I'd have to go into a McD's to see for sure, but I'm not willing to risk falling off the wagon and do that
Those unbelievable greedy bastards at NBC! Apple spoon feeds NBC a new revenue source, over and above their usual commercial contracts, and now they want even more.
They are too stupid to realize that they will sell more shows and make more money if they keep the price low.
They will not make more money, apple will sell more video ipods while NBC gets no say in how their assets are sold, is what you meant to say.
common guy, i thought you knew this.
It is true. It was in the agreement, and discussed freely over the internet and the NY Times and WSJ.
I'm not quite getting this.
Are you saying that as part of the settlement with Creative, Apple somehow stipulated that Creative would be free to sue other parties? How does that work?
My impression was that it was considered shrewd for Apple to have settled, since it meant they would have clear rights to iPod UI elements going forward, and if anyone else ran afoul of Creative's lawyers, all the better for Apple (which, AFAIK, hasn't happened).
But that's not really the same as the the scenario being described, wherein party C encourages the behavior of party A, by clandestine means, in order to enjoy collateral benefits. It's just Apple making the best of the existing situation.
Unless we are theorizing that Apple actually paid Creative to sue them, or that settling a lawsuit out of court is now considered manipulative and Machiavellian?
They will not make more money, apple will sell more video ipods while NBC gets no say in how their assets are sold, is what you meant to say.
It's really hard to say, but generally, lower prices do mean more sales. Often enough, though not always, the increased sales nets more than they would have if the prices were high. Movies used to cost $80 or more to buy outright. It turns out that selling them at $20 or less basically enabled a huge industry to explode out of what was once practically nothing.
iPods seem to sell well enough even in places where iTunes doesn't offer videos.
I'm not quite getting this.
Are you saying that as part of the settlement with Creative, Apple somehow stipulated that Creative would be free to sue other parties? How does that work?
My impression was that it was considered shrewd for Apple to have settled, since it meant they would have clear rights to iPod UI elements going forward, and if anyone else ran afoul of Creative's lawyers, all the better for Apple (which, AFAIK, hasn't happened).
But that's not really the same as the the scenario being described, wherein party C encourages the behavior of party A, by clandestine means, in order to enjoy collateral benefits. It's just Apple making the best of the existing situation.
Unless we are theorizing that Apple actually paid Creative to sue them, or that settling a lawsuit out of court is now considered manipulative and Machiavellian?
No, I'm saying that Apple doesn't have to give permission to Creative, but that the $100 million gave them the money to do so. The contract stipulates that if Creative sues others, and wins settlements, Apple is entitled to a certain amount back from Creative, which would, of course, be less than Creative would get from the other settlements.
The assumption here, coming from that agreement, was that Apple settled for such a large amount, because it meant little to them these days, but could stand as a mark against which other agreements would have to be judged, and would also be enough, not to only help finance Creative's possible other lawsuits, but to help them stay around to initiate them.
While we don't know what was agreed to other than what was made public, the agreement where Apple gets money back in those situations was considered to be very odd, as that's not a normal procedure.
While this was a public settlement, to be sure, it certainly is clandestine in its intent.
There is no difference here than MS investing in SCO with the intent of giving them the financing to sue others, which they were already doing.
Your saying that if Apple paid Creative to sue them, that would have been equivalent, is wrong. MS didn't pay SCO to sue them.
...On a .99 cent song, the credit card takes a quarter per transaction....
i don't believe that. Show me i'm wrong if you can.
i don't believe that. Show me i'm wrong if you can.
I think you are right. For me, the base cost of the transaction is $0.10, and then it's an additional 2.5% to 5%, a bit higher for AMEX, ~6% (do they accept that?), depending on the card, transaction volume and other factors, so you can figure maybe $0.12 to $0.16. It's possible Apple has special deals.
I really don't feel like posting a copy of the statements, it's somewhat sensitive paperwork.
Of course, even DVD sales have been suffering a decline, partly due to bit torrents, and partly due to HD Tv becoming more popular.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART. Like several posters said previously in this thread, it's a free market economy. If the price is too high, people won't buy. Guess what? They're not buying.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART.
It sounds like maybe you dug up the high def version. I doubt WalMart would only take $2 off the list price on a movie. It might be a misprice, but I don't remember any new release other than HD or super deluxe with physical goodies edition selling for more than $20 US.
Partly due to pricing too. Not long ago, I could find just about any DVD movie for $16 or less. I went to buy Casino Royale in DVD last week, and it was $26. At WALMART. Like several posters said previously in this thread, it's a free market economy. If the price is too high, people won't buy. Guess what? They're not buying.
That sounds high to me, but it's possible. Often there are two versions, the regular one, and a special with more extras, for more. I often buy those editions.
I think you are right. For me, the base cost of the transaction is $0.10, and then it's an additional 2.5% to 5%, a bit higher for AMEX, ~6% (do they accept that?), depending on the card, transaction volume and other factors, so you can figure maybe $0.12 to $0.16. It's possible Apple has special deals.
I really don't feel like posting a copy of the statements, it's somewhat sensitive paperwork.
Typically MC/VISA will take roughly 2.0-2.5% of a transaction depending on volume. Your middle man merchant API provider (Autorize.net, Payflow Pro, etc) that is providing the interface will also take another 1-2% again depending on volume and the contract. So a range of 4-5% will go to the provider.
Music labels like Universal (UMG) take 50% of the sale and for the independent and lesser knowns will take anywhere from 25%-40% of the sale.
So a .99 breakdown per audio track becomes:
.99 sale price
- .50 for the label
-* .05 (.99) for CC provider
= .44 for Apple per track
What really happened: NBC wanted to raise prices, Apple did not. Apple 'leaks' the news that nbc is threatening dropping their content from the iTMS for the above reason. NBC craps their pants and the next day releases to the press that this is not the case and they will still offer it at the same price. Their stock-holders are happy as there was little damage done since the markets were closed. Everyone else says 'eh'.
Ha! Exactly!!!
It's really hard to say, but generally, lower prices do mean more sales. Often enough, though not always, the increased sales nets more than they would have if the prices were high. Movies used to cost $80 or more to buy outright. It turns out that selling them at $20 or less basically enabled a huge industry to explode out of what was once practically nothing.
iPods seem to sell well enough even in places where iTunes doesn't offer videos.
Jeff. I agree with you. Lower prices can lead to more sales.. what I am saying is that there is no way to find out what the correct price point for videos are if apple insist on 1.99 per video. It probably sure ain't 4.99 but it aint 1.99 either. Apple is asking NBC and every other studio to leave money on the table. Why should they agree to this in perpetuity?. Also, yes ipods sell well where itunes does not offer videos but you do understand why apple offered vidoes in thr first place right?. It's to increase the value of ipods (ie, now my ipod can do lot more stuff).. They can then charge more for an ipod or keep it the same price even though component cost is lower. I know what Apple is getting out of this arrangement.. what exactly NBC is getting out of the arrangement, i am not sure. They may contend (rightly too) that they could make more money if they raised the prices of some of the most sought after videos.
Think about it. If you owned something and then went on ebay to sell it but ebay restricted how much you can sell it for, would u continue to use ebay?. What if you had lots and lots of this something (unlimited amount).. would you still want to sell on ebay if they stated you can only sell for a specific price?. of course not!!. Would you not want to find out on your own exactly how much consumes are willing to pay instead of having ebay tell you?.
Imagine further that you have a hot in demand red, convertible and i have some old beat-up 1995 car but ebay insisted we both sell at the same price. Obviously, i am making out on that deal but you are getting robbed. Sure, more people would want to buy your hot red car (everyone likes to get something for nothing..) but that is not the point.. now imagine you have tons of hot red car.. sure more people would buy them if you sold them at the same price as my beat up old car but is that your goal?. Don't you already know if you sold your hot new red car at twice the price of my old beat up car, you'd still get customers?.
I know this is not a perfect analogy but new hot in demand music by definition is worth more than old, who gives a damn, unpopular music (The higher the demand, the higher the price the market will bear).
Apple is asking NBC and every other studio to leave money on the table. Why should they agree to this in perpetuity?...
Think about it. If you owned something and then went on ebay to sell it but ebay restricted how much you can sell it for, would u continue to use ebay?. What if you had lots and lots of this something (unlimited amount).. would you still want to sell on ebay if they stated you can only sell for a specific price?. of course not!!...
Problem with that analogy is that ebay is the market. Sure, you can leave ebay. And NBC can leave iTMS. But they won't because leaving money on the table is better than not having a seat.
We're in an era when content has been crappy for so long, and people don't want to pay anymore. Sure, Heroes was good, but for every Heroes, Office and 30 Rock, there are a dozen bad bets that only last 5 weeks. And whats worse, we dont know what the bad bes are at the beginning of the season! So rather than sitting and Tivo-ing everything, folks are shifting away from being able to get all content on demand (tivo) to being able to select and buy limited content. Apple broke ground in this area, and hence has the power.
If NBC was truly confident that they were producing 'hot red corvettes' then they would leave and distribute their electronic media without iTMS. But they WONT, because right now delivery method matters more than content (which is why even the worse garbage sells on iTMS). Some will follow, but most will say 'eh... oh well.' and watch it on TV.
I personally LOVE to see Apple flexing its little baby muscles. Its a shrimp compared to the evil empire GE, but when it comes to digital media, (to quote MC Hammer) GE/NBC 'can't touch this'. They're getting us on the front end (via inflated ipod pricing) but saving us $$ on the back end at the expense of NBC. YES!
Problem with that analogy is that ebay is the market. Sure, you can leave ebay. And NBC can leave iTMS. But they won't because leaving money on the table is better than not having a seat.
We're in an era when content has been crappy for so long, and people don't want to pay anymore. Sure, Heroes was good, but for every Heroes, Office and 30 Rock, there are a dozen bad bets that only last 5 weeks. And whats worse, we dont know what the bad bes are at the beginning of the season! So rather than sitting and Tivo-ing everything, folks are shifting away from being able to get all content on demand (tivo) to being able to select and buy limited content. Apple broke ground in this area, and hence has the power.
If NBC was truly confident that they were producing 'hot red corvettes' then they would leave and distribute their electronic media without iTMS. But they WONT, because right now delivery method matters more than content (which is why even the worse garbage sells on iTMS). Some will follow, but most will say 'eh... oh well.' and watch it on TV.
I personally LOVE to see Apple flexing its little baby muscles. Its a shrimp compared to the evil empire GE, but when it comes to digital media, (to quote MC Hammer) GE/NBC 'can't touch this'. They're getting us on the front end (via inflated ipod pricing) but saving us $$ on the back end at the expense of NBC. YES!
You haven't been paying attention. NBC does plan to leave. They cannot create a service overnight. Yes, they wanted to stay with Apple because apple already had the distribution channel but that does not mean they can't and won't develop their own distribution channel. If you read the original article, you would see that they plan to.
NBC will soon find out who needs who more. Apple needs them or they need apple but I think they are right in attempting to find this out. To cede your assets to another company without a fight seems kinda stupid to me. If they discover apple is the best way to go, they will return, if not, apple will have to change cause other media companies will follow suit if they see NBC successful without Apple. Either way, we will learn shall we not?.
You haven't been paying attention. NBC does plan to leave. They cannot create a service overnight. Yes, they wanted to stay with Apple because apple already had the distribution channel but that does not mean they can't and won't develop their own distribution channel. If you read the original article, you would see that they plan to.
They plan to leave? When? I didn't read that. I saw this:
"We want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December," said Shields. "Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com."
Hmmm.. I dont think they're going anywhere any time soon. It looks to me like they tested the waters, Apple held firmly, and now they are retracting.
I do realize that they have a right to test the waters, but my point is that they are feeling the result of 1) years of crappy programming, and 2) a distribution network in iTMS that is more powerful than they could have imagined at the onset. They want a bigger peice of the pie. Thats ok, but you ain't gonna get it easy.
Sure, test the waters and experiment with pricing. Build and maintain a new distribution channel. Find that perfect price that maximizes profits. In the meanwhile, lose a viable earnings stream in the iTMS. Create bad vibes with your fans who like purchasing the content at iTMS at 1.99 per episode. Thats bad advice if you ask me.
Heres another idea... give low-quality versions out for free on google video. Sell Standard Def versions on iTMS. See how many people care about quality. If iTMS sales don't suffer, then offer HD versions on a proprietary channel at a slighlty higher price. If that works, then you've succeeded in differentiating your product from iTMS. You've also proved that people are not buying these episodes just because its just really easy to click 'buy', which is probably the real answer here!
Its obvious people feel strongly about this (as evident from the name-calling and long posts above). I think just the mere fact that we are all on this forum means that we are all interested in this. I personally vote for cheap, high-quality, DRM-free content. If i need to choose 2, i'll go with high-quality and cheap. So if NBC is up for raising prices, bundling, whatever, i say go to heck. Where's that link to EyeTV?!