What a joke! He admits that they wanted to raise prices. And they wanted a cut of hardware sales!!! For what! They're beggars looking for money from rich Apple. Hey, how about my cut. They're making money on the backs of consumers. We should get money back.
The NBC chief also revealed that in addition to more pricing flexibility, his firm was also seeking a cut of Apple hardware sales -- such as the iPod and iPhone -- which were capable of viewing content downloaded from the iTunes Store.
"Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money," he said. "They did not want to share in what they were making off the hardware or allow us to adjust pricing."
in a related event, NBC's vp of inanity admitted that for the past 22 years NBC has been pursuing unsuccessfully a plan to claim "our fair share" of revenue from new television sales. Michael J. Buffoon said the major television manufacturers had stopped returning his calls, "but that doesn't mean we're wrong: They've made a lot of money off our content."
I think the recording industry is getting a little payback for the way it has ripped off the very same musical talent that gave them all their billions for years. I mean come on charging over $20.00 for 35 year old soundtracks is ridiculous! I haven't bought a new CD in over nine years, and I don't plan to ever buy one again. You get what you deserve! Go Apple!
To expect cuts for the sale of iPods and iPhones is retarded. Should TV manufacturers also pay NBC royalties? I bet SJ got a really good chuckle at the idiotic suggestion. Let NBC hang themselves.
According to Apple's data here Apple has sold over 100 Million TV Shows. At $1.99US per show, that is a gross profit of $199M. If NBC claims that they were responsible for 40% of all video sales, that would mean 40 Million shows or $79.6M gross. If NBC claims they only made $15M in revenue that would mean that Apple pocketed the remaining $64.6M.
Do you really believe for one minute that NBC agreed to a business deal with Apple where they only get approx 19% of the revenue and Apple gets the remaining 81%!
Well, I think NBC pocketed $15 Million after they paid everyone off. Apple pays Akamai to deliver the content from my understanding, so Akamai gets a chunk of the pie. So do the people that are in the TV show.
I think that NBC is getting nervous. Isn't NBC getting sold off from GE? Aren't there discussions of that happening? I think they are just trying put Apple down for trying to make LEGAL content somewhat affordable. Hey, if they raised the pricing, then they might not sell as much. I have an iPod and I don't have any TV shows because they haven't posted any that are worth paying for.
"...undermining the ability of traditional media companies to set profitable rates..."
Uhhh, THAT WAS THE IDEA Mr. Zucker!
My message to NBC:
You shouldn't be getting rich off of a lesser quality format of content that already brings in billions of dollars for you. The Internet is a new model of marketplace. It's not for profitting billions of dollars, it's for providing people a service they need and want. It's supposed to be your way of saying "thank you" to the customers that have provided you loyal viewership and BMWs and mansions for luxury condos for a century. If it makes you a lot of money (or any money at all), you should see it as a bonus. If you want more money go and make some real technology yourself - which Hulu is a small step in the right direction of doing.
Last time I checked, it was supposed to be the consumer determining what your profit should be by our purchasing decisions. If you have a better option than Apple, then stop crying and do it yourself, and see what consumers prefer.
And before you go on whining about Apple being so inflexible - remember - you signed a contract with them. Remember that? Contracts are those little thingies that say you agree to certain terms with someone. You remember - like the contracts you make musicians and recording artists sign giving them practically "pennies" compared to the money you make off of their content.
I only wish I worked for NBC-Universal, just so I could walk into your office and tell you-off and quit. C'mon people, all you people with NBCUNI on the end of your email address; where are all of you? All of you that know your company CEO is making ridiculous statements on your behalf. Statements that in theory and practice have no basis in anything good for you as a consumer.
For its part in the bitter feud, Apple responded by saying NBC was asking for a twofold increase in the wholesale price of its TV show content, which would have resulted in the retail price to iTunes customers increasing to $4.99 per episode from $1.99.
And you wonder why NBC has dropped from #1! It's because of arrogant idiots like him ruining their standing by forgetting their client base and focusing on the almighty dollar! Perhaps he needs to take a page from Apple's playbook, it's relatively simple but does contain that most forgotten thing in the business world. Common Sense. Give the customer what they want at a fair price and they will return!
Zucker - Thanks for helping me make my mind up as to which network to watch.
Apple I want more Food Network!
Absolutely right! These guys have a consistent history of producing POOR quality entertainment , news that is no longer news (it's poor quality entertainment), movies that suck, and TV that has customers running to cable and the Internet to find relief. And if that was not enough, they want us to continue maintaining them in a life style they haven't earned. If it wasn't for Apple we would all be torrent freaks instead of paying. They should be listening to Jobs instead of drinking their own stale Kool=aid.
The "entertainment" industry is trying to force Apple join their swirl around the drain.
Enjoy it when I use fair-use to record your content, remove ads, and encode it for digital use on the Apple hardware I purchase without paying you a cent.
iTunes store sound so bad now?
Exactly! You want to see how powerful the consumer can become? The aforementioned post has it dead to rights.
I see Zucker taking a bath and losing his job within 2 years.
"We know that Apple has destroyed the music distribution cartel -- and if we don?t take control, they?ll do the same thing on the video side," Zucker should have said...
According to Apple's data here Apple has sold over 100 Million TV Shows. At $1.99US per show, that is a gross profit of $199M. If NBC claims that they were responsible for 40% of all video sales, that would mean 40 Million shows or $79.6M gross. If NBC claims they only made $15M in revenue that would mean that Apple pocketed the remaining $64.6M.
Do you really believe for one minute that NBC agreed to a business deal with Apple where they only get approx 19% of the revenue and Apple gets the remaining 81%!
Actually, no. 100 million shows at $1.99 per show is $199 M REVENUE, not gross profit. You have to subtract the cost of distribution to get the gross profit. This would include what Apple pays Akamai and a few other distribution costs.
And NBC didn't say that they made $15 M in revenue. They said $15 M in profit - which is revenue minus expenses. Granted, their expenses should have been small (cost of conversion to iTunes format and some advertising expense), but they need to be counted.
...I could understand if $15 million was actually less than the cost of the packaging, shipping, ... But it's not. To put 1 TV show on iTunes costs how much?? NOTHING!!
NBC is just throwing away profit.
I think your comment exposes a point that's been generally overlooked on this forum a misconception, even: the cost to the network of selling a tv show on iTunes is not "nothing": it's whatever apple is charging for that service. That's a number we don't know, right? What if it's 49 cents: Is $1.50 enough for NBC to net from a $1.99 sale? What if Apple's share is 99 cents? $1.49? Is 50 cents per episode sufficient?
What about music: What if apple's share of a 99 cent song sale is 25 cents? Is 74 cents net to NBC sufficient? What if apple's take is 50 cents? 75? If it's 75 cents, should NBC be content with netting 24 cents on a song sale? That's 2.88 for a 12-song album. What if it sells that album for $14.99 in a store instead, and the cost of manufacturing the CD is 75 cents and the artist's take is $1 and the store's take is $7.50? In that example, NBC's net would be $5.74, compared to $2.88 from a sale on the iTMS, given the hypotheticals above.
Changes the discussion, doesn't it?! The problem is, to the best of my knowledge we don't know what real (or even generally accurate) numbers are. Without those numbers, it seems to me these discussions are pointless.
I'd like to believe Apple's set up a pricing scheme that to an outsider would seem fair, would convince us NBC's stance is wacko. But I'm not willing to leap to that conclusion.
I know most of you will not agree with me, but $15 milion per ONE WHOLE YEAR is really not that much... I think it's suprisingly little.
I agree... $15 mil really isn't too large in the grand scheme. Bottom line: people don't want to purchase big 42 minute television shows that they only watch once. Where I think Apple and Content Providers can really make "BANK" is by offering a rental service for movies/television, (not music).
Wasn't there some kind of rumor that said a TV/Movie rental service would be out in the fall. Like a movie would be $4.99 to rent for thirty days or something like that. This would be better the DVR.
? No way they only made $15 Million revenue off of iTunes sales, I call BS.
? Do they ask every TV manufacturer, DVD recorder, DVR manufacturer, set-top box manufacturer, TV antenna manufacturer, etc. for a slice of profits? Give me a break.
? Apple did not "kill the music industry in terms of pricing," because if you remember, before iTunes, ALL music available online was FREE. Does he really not remember reality from only a few years ago? What an a-hole, Apple CREATED the online digital music industry and gave studios a revenue stream (and a big one at that) compared to the ZERO-dollar revenue stream it had been before iTunes came along.
As far as I can tell, there are several facts that are driving most of the motivations of traditional media right now, and let me tell you, they are scared to the point of insanity:
? In another 5-10 years, broadband speeds will likely be quite a bit faster than today, allowing for vast amounts of high-quality digital media to be distributed online trivially. This includes wireless connectivity well in excess of 50Mbit/sec -- even approaching Gigabit/sec speeds. Think about how much music you could grab with a 100Mbit/second connection. WHat about a 500Mbit/sec connection? How many HD-DVDs is that per hour?
? In another 5-10 years, a small hard drive or flash drive device will be able to store many, many Terabytes worth of data -- say, a huge chunk of a studio's entire library of content. Without DRM, it would be pretty easy to creative an archive of a studio's entire library, and transfer it to your friend's iPod with no effort.
? Niche content providers and alternative forms of electronic entertainment (such as video games) will continue to attract more viewers/users, so the main studios will have way more competition than today. Youtube and its ilk represent the future of hundreds-of-thousands "micro-broadcasters" who with minimal resources and an instant distribution system (the InterTron) can get their content out cheaply and easily.
Hahahah welcome to the New World Order of 21st Century Media, old-skool losers! You will actually need to compete in terms of quality above all else, and ALSO need to show creativity in your approach to attracting viewers, distributing your content, and generating revenue streams. VERY FEW of these folks "get it" right now. Dare I say Starbucks understands a lot more about 21st century music distribution than any of the big labels (Song of the Day, in-store iTunes WiFi Music Store, etc.)
JEFF ZUCKER ? NBC's Superstar Entertainment Chief by Kaya Morgan
All that glitters may just be the peacock. It's no secret that NBC is, by far, the most successful of all the broadcast networks. According to the Nielsen ratings, out of the top 10 shows in prime time, NBC racked up 6 including Friends, E.R., Law & Order, Will & Grace, Scrubs and Law & Order ? Special Victims Unit. During the upcoming season, NBC is expecting to generate more than $700 million in profits from prime time alone, not including the additional revenues from reruns sold to cable and other TV stations. A single hit show can generate more than $100 million in annual profits. So, there are serious chips on the line.
But the top dog doesn't stay the top dog without protecting his territory. In this case, FOX is yapping at NBC's heels. Always jockeying for position, the networks fiercely compete, hoping to hit the jackpot with that special show that will drive the majority of viewers to their network. Consequently, NBC has brought out the biggest gun and brightest talent they have ? Jeff Zucker. Many say he's brilliant. Others say he's a self-confident and decisive leader. Whatever he is, he's broken the mold.
If you piss off Internet savvy people, they just might go out of their way to make sure NBC's new shows are immediately available as torrents. And they'll keep Transmission on all the time to help seed them.
Comments
Cries from a dying industry.
The NBC chief also revealed that in addition to more pricing flexibility, his firm was also seeking a cut of Apple hardware sales -- such as the iPod and iPhone -- which were capable of viewing content downloaded from the iTunes Store.
"Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money," he said. "They did not want to share in what they were making off the hardware or allow us to adjust pricing."
in a related event, NBC's vp of inanity admitted that for the past 22 years NBC has been pursuing unsuccessfully a plan to claim "our fair share" of revenue from new television sales. Michael J. Buffoon said the major television manufacturers had stopped returning his calls, "but that doesn't mean we're wrong: They've made a lot of money off our content."
As I stated on MacRumors:
According to Apple's data here Apple has sold over 100 Million TV Shows. At $1.99US per show, that is a gross profit of $199M. If NBC claims that they were responsible for 40% of all video sales, that would mean 40 Million shows or $79.6M gross. If NBC claims they only made $15M in revenue that would mean that Apple pocketed the remaining $64.6M.
Do you really believe for one minute that NBC agreed to a business deal with Apple where they only get approx 19% of the revenue and Apple gets the remaining 81%!
Well, I think NBC pocketed $15 Million after they paid everyone off. Apple pays Akamai to deliver the content from my understanding, so Akamai gets a chunk of the pie. So do the people that are in the TV show.
I think that NBC is getting nervous. Isn't NBC getting sold off from GE? Aren't there discussions of that happening? I think they are just trying put Apple down for trying to make LEGAL content somewhat affordable. Hey, if they raised the pricing, then they might not sell as much. I have an iPod and I don't have any TV shows because they haven't posted any that are worth paying for.
Uhhh, THAT WAS THE IDEA Mr. Zucker!
My message to NBC:
You shouldn't be getting rich off of a lesser quality format of content that already brings in billions of dollars for you. The Internet is a new model of marketplace. It's not for profitting billions of dollars, it's for providing people a service they need and want. It's supposed to be your way of saying "thank you" to the customers that have provided you loyal viewership and BMWs and mansions for luxury condos for a century. If it makes you a lot of money (or any money at all), you should see it as a bonus. If you want more money go and make some real technology yourself - which Hulu is a small step in the right direction of doing.
Last time I checked, it was supposed to be the consumer determining what your profit should be by our purchasing decisions. If you have a better option than Apple, then stop crying and do it yourself, and see what consumers prefer.
And before you go on whining about Apple being so inflexible - remember - you signed a contract with them. Remember that? Contracts are those little thingies that say you agree to certain terms with someone. You remember - like the contracts you make musicians and recording artists sign giving them practically "pennies" compared to the money you make off of their content.
I only wish I worked for NBC-Universal, just so I could walk into your office and tell you-off and quit. C'mon people, all you people with NBCUNI on the end of your email address; where are all of you? All of you that know your company CEO is making ridiculous statements on your behalf. Statements that in theory and practice have no basis in anything good for you as a consumer.
For its part in the bitter feud, Apple responded by saying NBC was asking for a twofold increase in the wholesale price of its TV show content, which would have resulted in the retail price to iTunes customers increasing to $4.99 per episode from $1.99.
[ View this article at AppleInsider.com ]
do you mean 2 fold or 2x
2 fold is 4x
fold a piece of paper in half twice and count the layers
And you wonder why NBC has dropped from #1! It's because of arrogant idiots like him ruining their standing by forgetting their client base and focusing on the almighty dollar! Perhaps he needs to take a page from Apple's playbook, it's relatively simple but does contain that most forgotten thing in the business world. Common Sense. Give the customer what they want at a fair price and they will return!
Zucker - Thanks for helping me make my mind up as to which network to watch.
Apple I want more Food Network!
Absolutely right! These guys have a consistent history of producing POOR quality entertainment , news that is no longer news (it's poor quality entertainment), movies that suck, and TV that has customers running to cable and the Internet to find relief. And if that was not enough, they want us to continue maintaining them in a life style they haven't earned. If it wasn't for Apple we would all be torrent freaks instead of paying. They should be listening to Jobs instead of drinking their own stale Kool=aid.
The "entertainment" industry is trying to force Apple join their swirl around the drain.
I will continue to shop with Apple.
Enjoy it when I use fair-use to record your content, remove ads, and encode it for digital use on the Apple hardware I purchase without paying you a cent.
iTunes store sound so bad now?
Exactly! You want to see how powerful the consumer can become? The aforementioned post has it dead to rights.
I see Zucker taking a bath and losing his job within 2 years.
do you mean 2 fold or 2x
2 fold is 4x
fold a piece of paper in half twice and count the layers
How about, nearly two fold.
As I stated on MacRumors:
According to Apple's data here Apple has sold over 100 Million TV Shows. At $1.99US per show, that is a gross profit of $199M. If NBC claims that they were responsible for 40% of all video sales, that would mean 40 Million shows or $79.6M gross. If NBC claims they only made $15M in revenue that would mean that Apple pocketed the remaining $64.6M.
Do you really believe for one minute that NBC agreed to a business deal with Apple where they only get approx 19% of the revenue and Apple gets the remaining 81%!
Actually, no. 100 million shows at $1.99 per show is $199 M REVENUE, not gross profit. You have to subtract the cost of distribution to get the gross profit. This would include what Apple pays Akamai and a few other distribution costs.
And NBC didn't say that they made $15 M in revenue. They said $15 M in profit - which is revenue minus expenses. Granted, their expenses should have been small (cost of conversion to iTunes format and some advertising expense), but they need to be counted.
do you mean 2 fold or 2x
2 fold is 4x
fold a piece of paper in half twice and count the layers
No, twofold is double - same as 2x:
http://dictionary.reference.com/browse/twofold
...I could understand if $15 million was actually less than the cost of the packaging, shipping, ... But it's not. To put 1 TV show on iTunes costs how much?? NOTHING!!
NBC is just throwing away profit.
I think your comment exposes a point that's been generally overlooked on this forum a misconception, even: the cost to the network of selling a tv show on iTunes is not "nothing": it's whatever apple is charging for that service. That's a number we don't know, right? What if it's 49 cents: Is $1.50 enough for NBC to net from a $1.99 sale? What if Apple's share is 99 cents? $1.49? Is 50 cents per episode sufficient?
What about music: What if apple's share of a 99 cent song sale is 25 cents? Is 74 cents net to NBC sufficient? What if apple's take is 50 cents? 75? If it's 75 cents, should NBC be content with netting 24 cents on a song sale? That's 2.88 for a 12-song album. What if it sells that album for $14.99 in a store instead, and the cost of manufacturing the CD is 75 cents and the artist's take is $1 and the store's take is $7.50? In that example, NBC's net would be $5.74, compared to $2.88 from a sale on the iTMS, given the hypotheticals above.
Changes the discussion, doesn't it?! The problem is, to the best of my knowledge we don't know what real (or even generally accurate) numbers are. Without those numbers, it seems to me these discussions are pointless.
I'd like to believe Apple's set up a pricing scheme that to an outsider would seem fair, would convince us NBC's stance is wacko. But I'm not willing to leap to that conclusion.
I know most of you will not agree with me, but $15 milion per ONE WHOLE YEAR is really not that much... I think it's suprisingly little.
I agree... $15 mil really isn't too large in the grand scheme. Bottom line: people don't want to purchase big 42 minute television shows that they only watch once. Where I think Apple and Content Providers can really make "BANK" is by offering a rental service for movies/television, (not music).
Wasn't there some kind of rumor that said a TV/Movie rental service would be out in the fall. Like a movie would be $4.99 to rent for thirty days or something like that. This would be better the DVR.
Yeah, or a cellphone manufacturer wanting a cut from the mobile provider - that would be absurd, I tell you, ABSURD!
While on the surface it may sound similar, Apple's relationship with AT&T is quite different.
Many people left their current carrier and switched to AT&T so they could get an iPhone.
No one is switching to the iPod so they can watch NBC content on the go.
AT&T just sells the customer the phone - no sign up - no technical support
Apple handles the sign up, technical support, advertising, etc.
NBC gives Apple digitized files, Apple does pretty much everything else and sends them a check.
? Do they ask every TV manufacturer, DVD recorder, DVR manufacturer, set-top box manufacturer, TV antenna manufacturer, etc. for a slice of profits? Give me a break.
? Apple did not "kill the music industry in terms of pricing," because if you remember, before iTunes, ALL music available online was FREE. Does he really not remember reality from only a few years ago? What an a-hole, Apple CREATED the online digital music industry and gave studios a revenue stream (and a big one at that) compared to the ZERO-dollar revenue stream it had been before iTunes came along.
As far as I can tell, there are several facts that are driving most of the motivations of traditional media right now, and let me tell you, they are scared to the point of insanity:
? In another 5-10 years, broadband speeds will likely be quite a bit faster than today, allowing for vast amounts of high-quality digital media to be distributed online trivially. This includes wireless connectivity well in excess of 50Mbit/sec -- even approaching Gigabit/sec speeds. Think about how much music you could grab with a 100Mbit/second connection. WHat about a 500Mbit/sec connection? How many HD-DVDs is that per hour?
? In another 5-10 years, a small hard drive or flash drive device will be able to store many, many Terabytes worth of data -- say, a huge chunk of a studio's entire library of content. Without DRM, it would be pretty easy to creative an archive of a studio's entire library, and transfer it to your friend's iPod with no effort.
? Niche content providers and alternative forms of electronic entertainment (such as video games) will continue to attract more viewers/users, so the main studios will have way more competition than today. Youtube and its ilk represent the future of hundreds-of-thousands "micro-broadcasters" who with minimal resources and an instant distribution system (the InterTron) can get their content out cheaply and easily.
Hahahah welcome to the New World Order of 21st Century Media, old-skool losers! You will actually need to compete in terms of quality above all else, and ALSO need to show creativity in your approach to attracting viewers, distributing your content, and generating revenue streams. VERY FEW of these folks "get it" right now. Dare I say Starbucks understands a lot more about 21st century music distribution than any of the big labels (Song of the Day, in-store iTunes WiFi Music Store, etc.)
All that glitters may just be the peacock. It's no secret that NBC is, by far, the most successful of all the broadcast networks. According to the Nielsen ratings, out of the top 10 shows in prime time, NBC racked up 6 including Friends, E.R., Law & Order, Will & Grace, Scrubs and Law & Order ? Special Victims Unit. During the upcoming season, NBC is expecting to generate more than $700 million in profits from prime time alone, not including the additional revenues from reruns sold to cable and other TV stations. A single hit show can generate more than $100 million in annual profits. So, there are serious chips on the line.
But the top dog doesn't stay the top dog without protecting his territory. In this case, FOX is yapping at NBC's heels. Always jockeying for position, the networks fiercely compete, hoping to hit the jackpot with that special show that will drive the majority of viewers to their network. Consequently, NBC has brought out the biggest gun and brightest talent they have ? Jeff Zucker. Many say he's brilliant. Others say he's a self-confident and decisive leader. Whatever he is, he's broken the mold.
more here: http://www.islandconnections.com/edit/zucker.htm