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.
Everyone in Hollywood thinks everyone in Hollywood is BRILLIANT. If they are, why are the big 3 losing obtainable business to virtually anyone else that creates content. Our press (the American Press) needs to call these guys to task instead of continuing rewarding lack of vision.
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...
Of course that blurb is from an article that is almost 5 years old (2003) and the industry has changed a lot in that time. iTMS was just a baby and there were no shows available for download on it back then.
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.
Well, keep in mind that NBC had signed a contract when they originally put their content on iTunes. So at one time they did think it was profitable.
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.
What? NBC is in the business of making money, not be a charity. It's their job to try to make money where they legally can. I don't know where your Billions of dollars figure comes from, Apple's video service probably hasn't grossed half a billion.
Quote:
Originally Posted by rtdunham
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.
From a recent interview with a European Universal exec, we do know the number for music is roughly 70%. And that's not enough to him. I really don't think it's unrealistic to expect that videos are sold at similar margins.
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.
We know for music from multiple sources that Apple gets 30% of the price to pay the costs of the site, distribution, credit card costs, marketing (affiliate payments), etc. So Akamai distribution costs comes out of Apple's share.
Even if we assume that Apple gets 50% (though I think it's the same 30%) of the 1.99, then there was $100M going back to the studios. If NBCU is 35% of sales (Apple says over 30%, NBC says 40%), then NBCU should've collected 35M. So does it make sense that it costs NBCU 20M to prepare the shows and manage distribution? Maybe they needed to have a one-time buy of special equipment to take its digital masters and convert them to MP4. Maybe they needed to pay huge bonuses to startup an organization to deal with the Internet. Who knows, but I'd assume its more likely that NBCU just burns through the revenue from iTunes.
This is a war apparently. --Worse, other executives are certainly listening.
~ CB
...they'll almost certainly realise Zucker can't see his hand in front of his face. Will they rally together to delay the inevitable or will they see his failure to embrace the future of TV as their best opportunity to increase market share?
Lets hope it's the latter or "AppleTV" will be off the air for good - until the next thing replaces it.
At $1 per episode, I'd be buying a lot of shows, AND, an AppleTV or maybe even two AppleTV's.
$2 each is too much. I'm not in that big of a hurry to watch the stuff. At $2 per episode, I'll just buy the dvd's when they come out, watch them, then dump them on eBay, thereby costing me very little.
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.
Thank you for attempting to include a dose of sobriety to the issue. However, we do know precisely what percentage Apple gives to major labels for each $0.99 song sale. They get $0.70. Which seems more than a fair share.
Where the guess work begins is figuring out, given the recent track records of Apple and NBC, what terms seem most likely for a video download contract. Apple walks up to the networks with a product that despite its wild success, had already been publically identified as a threat to their business model. Apple therefore has to find a way to not only make the proposition favorable to NBC, but immediately profitable. I think it's fair to assume Apple presented terms that were comparable to their iTunes music model, if not even more favorable to the networks than to Apple.
In addition it seems clear that the Apple model for iTunes is centered on taking a loss in the percentage of iTunes sales, while reaping the far greater benefit of claiming a bigger stake in what was a barren technology landscape, and expanding their brand recognition and loyalty. All of which supports (not "boosts") hardware sales.
Wow. It takes some creative effort to spin Apple's success as a "destruction." Why can't these executives channel that energy into creating some actually innovative ideas? I bet everyone at NBC is happy he let their hardware profit desire slip out.
This is like Armani calling me up and saying that since I've worn his clothes to work, he'd like a cut of the "millions" I've made. No, that's not a good analogy--because he's way too classy for that.
After this, I can hear Zucker talking about Mother Theresa, "Man, like she's way so arrogant, wearing all white all the time and everything..."
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?
I'll answer that one - zero! Having destroyed the revenue model that supports their production you won't have any BLU-RAY discs to rip (sorry but HD-DVD was never going to win) & isn't 802.11n 200Mbps+ already?
Quote:
Originally Posted by nicky g
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.
You'll probably be able to put the whole library on a current device, see argument above
Quote:
Originally Posted by nicky g
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.
Is that why eMusic (not iTunes) is the largest online retailer in the world?
Quote:
Originally Posted by nicky g
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.)
Whilst I empathise with where you're coming from, be careful Nicky. When the revolution has come and the music industry looks sooo different from now you may find some of the old structures creeping back in but by then you'll be out of school and will know this. "Revolutions" have a habit of ending up back where they started that's why they are so named and that's only if we're lucky sometimes we get to remove the "R" but others we get to replace it with a "D"
Since I don't have cable or even own a tv, iTunes was perfect for me. I love "Heroes" and bought it every week off iTunes. Now? I just download it off The Pirate Bat torrent site. So, as far as i'm concerned, NBC lost that revenue by leaving iTunes.
I'm viewing all this as a bemused outsider but I'm wondering what's so wrong with the concept of variable pricing? It doesn't seem an unreasonable thing to ask for. After all, we're all used to DVDs for feature films or successful TV shoes costing more when they first come out and then falling over time. Is this a problem?
-Rolf
"Variable" pricing is code for more expensive. Period. Watch the Amazon store. They start with a bunch of tunes at 89 cents, but once it becomes successful, watch the prices go up and up and up. The same thing happened with CDs.
This NBC guy just proved my point by admitting that NBC was pressuring Apple to up the price on Heroes, its most popular show. What would have stopped them from making it $4.99 the following year? or $5.99 the year after that?
These companies are pissed at Apple because they don't like to relinquish control. That's all there is to it. Jobs had the same issues with Disney and Pixar. Until Pixar kicked the crap out of Disney year after year. And then Jobs and Pixar effectively took over Disney Animation altogether. (Disney "bought" Pixar, but Jobs became top stock holder, and The Pixar executive staff all took top positions at the Animation studio.) With any luck, Apple will buy some prominent indie studios and make its own content. Let the big networks go gently into that good night. I can live without another season of Heroes.
Anyone remember Zucker's roots? Yes, he's the poobah of NBC now, but he used to be telling Katie Couric when to smile on the Today Show. Once a cheesy huxster, always one.
"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."
Ah what cruel people Apple are!?! I'd have to agree with NBC, Apple should pay a portion of their hardware profit, but only the same portion as every TV maker pays NBC now, and every DVD player manufacturer is required to pay.
:-)
Quote:
Originally Posted by rhowarth
what's so wrong with the concept of variable pricing? It doesn't seem an unreasonable thing to ask for. After all, we're all used to DVDs for feature films or successful TV shoes costing more when they first come out and then falling over time. Is this a problem?
Good question. I think it's mainly that Apple thinks they see a new model for TV that works for everyone, and is trying to kick start this model. For instance, the local station makes about 50c per viewer when you watch Lost on them (via advertising), and NBC only gets a portion of that. So if you assume 2 viewers of an iTunes purchase, for $1, NBC would be ahead of the TV model. However, NBC doesn't want to replace the TV model, they want to add a new model (or maybe upgrade the DVD model). It involves higher profits per show but far fewer buyers per show. Not Apple's desire.
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%!
Fantastic analysis!
I think that JZ is, well, stretching the truth (to say the least).
AppleTV2 needs to add torrent capability and DVR. That'll show 'em.
I doubt they'll do pirate torrents, but they are probably seriously considering their DVR options. NBC's moves could be great for us!
Just making up an example that might work VERY well for Apple, and encourage deals with Disney/NBC/Fox/etc.
They could offer a DVR AppleTV with multiple options
1) record & watch a live/delayed TV show just like TiVo does, skip ads etc.
2) download for free a TV show with only TWO ads per ad break (google video ads?), customised to your own interests, and NOT skippable
3) pay $1 to download & watch a TV show (without ads) multiple times in a one month period.
4) pay $2 to own a TV show.
So for NBC, your AppleTV would only have option #1. And we'd be able to skip through the ads entirely.
And for Disney/ABC, your AppleTV might remove option #1 - just have options #2 and #4. ABC gets $2 per show, or FORCES you to watch a couple of customised ads. This is good for Disney/ABC.... much better than following NBC's decision and having you skip ads.
(Note: It would save Apple money if ABC viewers record FTA instead of downloading, but I don't think this is crucial to them)
What do you think? Could Apple legally do this? Technically do this? Would it encourage NBC?
Actually it would be 199M in sales not profit. There is a cost involved to the shows.
NBC says it profited 15 million not 15 million in Revenue. There is a difference.
How much did they have to pay the production company, ads, who know what else they throw in there.
In theory NBC could have reaped all the the 199M in revenue and still claimed 15 million in profit.
As some music artist and old school TV people about the studios "accounting". Example... the networks claimed that some of James Garners old shows never made money even thought they were hits and were on the air for a number of years. He had to sue them to get the books opened.
Quote:
Originally Posted by karlfranz
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%!
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%!
Like most of the show biz entities, NBC Universal is probably using "creative accounting". They're all hiding the true amounts. Be interesting if Jobs came out and refuted that number.
Comments
do you mean 2 fold or 2x
2 fold is 4x
fold a piece of paper in half twice and count the layers
seems logical, but my widget dictionary says twofold means twice as many...
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.
more here: http://www.islandconnections.com/edit/zucker.htm
Everyone in Hollywood thinks everyone in Hollywood is BRILLIANT. If they are, why are the big 3 losing obtainable business to virtually anyone else that creates content. Our press (the American Press) needs to call these guys to task instead of continuing rewarding lack of vision.
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...
Of course that blurb is from an article that is almost 5 years old (2003) and the industry has changed a lot in that time. iTMS was just a baby and there were no shows available for download on it back then.
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.
Well, keep in mind that NBC had signed a contract when they originally put their content on iTunes. So at one time they did think it was profitable.
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.
What? NBC is in the business of making money, not be a charity. It's their job to try to make money where they legally can. I don't know where your Billions of dollars figure comes from, Apple's video service probably hasn't grossed half a billion.
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.
From a recent interview with a European Universal exec, we do know the number for music is roughly 70%. And that's not enough to him. I really don't think it's unrealistic to expect that videos are sold at similar margins.
Many say he's brilliant. Others say he's a self-confident and decisive leader. Whatever he is, he's broken the mold.
Wow... that line read like it was written by Zucker himself! Isn't the intent of a comparison to offer two sides to a story?
I think that line should have read: "Many say he's brilliant. Others say he is a self-absorbed and combative leader..."
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.
We know for music from multiple sources that Apple gets 30% of the price to pay the costs of the site, distribution, credit card costs, marketing (affiliate payments), etc. So Akamai distribution costs comes out of Apple's share.
Even if we assume that Apple gets 50% (though I think it's the same 30%) of the 1.99, then there was $100M going back to the studios. If NBCU is 35% of sales (Apple says over 30%, NBC says 40%), then NBCU should've collected 35M. So does it make sense that it costs NBCU 20M to prepare the shows and manage distribution? Maybe they needed to have a one-time buy of special equipment to take its digital masters and convert them to MP4. Maybe they needed to pay huge bonuses to startup an organization to deal with the Internet. Who knows, but I'd assume its more likely that NBCU just burns through the revenue from iTunes.
This is a war apparently. --Worse, other executives are certainly listening.
~ CB
...they'll almost certainly realise Zucker can't see his hand in front of his face. Will they rally together to delay the inevitable or will they see his failure to embrace the future of TV as their best opportunity to increase market share?
Lets hope it's the latter or "AppleTV" will be off the air for good - until the next thing replaces it.
McD
$2 each is too much. I'm not in that big of a hurry to watch the stuff. At $2 per episode, I'll just buy the dvd's when they come out, watch them, then dump them on eBay, thereby costing me very little.
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.
Thank you for attempting to include a dose of sobriety to the issue. However, we do know precisely what percentage Apple gives to major labels for each $0.99 song sale. They get $0.70. Which seems more than a fair share.
Where the guess work begins is figuring out, given the recent track records of Apple and NBC, what terms seem most likely for a video download contract. Apple walks up to the networks with a product that despite its wild success, had already been publically identified as a threat to their business model. Apple therefore has to find a way to not only make the proposition favorable to NBC, but immediately profitable. I think it's fair to assume Apple presented terms that were comparable to their iTunes music model, if not even more favorable to the networks than to Apple.
In addition it seems clear that the Apple model for iTunes is centered on taking a loss in the percentage of iTunes sales, while reaping the far greater benefit of claiming a bigger stake in what was a barren technology landscape, and expanding their brand recognition and loyalty. All of which supports (not "boosts") hardware sales.
This is like Armani calling me up and saying that since I've worn his clothes to work, he'd like a cut of the "millions" I've made. No, that's not a good analogy--because he's way too classy for that.
After this, I can hear Zucker talking about Mother Theresa, "Man, like she's way so arrogant, wearing all white all the time and everything..."
Ok, somebody stop me.
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?
I'll answer that one - zero! Having destroyed the revenue model that supports their production you won't have any BLU-RAY discs to rip (sorry but HD-DVD was never going to win) & isn't 802.11n 200Mbps+ already?
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.
You'll probably be able to put the whole library on a current device, see argument above
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.
Is that why eMusic (not iTunes) is the largest online retailer in the world?
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.)
Whilst I empathise with where you're coming from, be careful Nicky. When the revolution has come and the music industry looks sooo different from now you may find some of the old structures creeping back in but by then you'll be out of school and will know this. "Revolutions" have a habit of ending up back where they started that's why they are so named and that's only if we're lucky sometimes we get to remove the "R" but others we get to replace it with a "D"
McD
I'm viewing all this as a bemused outsider but I'm wondering what's so wrong with the concept of variable pricing? It doesn't seem an unreasonable thing to ask for. After all, we're all used to DVDs for feature films or successful TV shoes costing more when they first come out and then falling over time. Is this a problem?
-Rolf
"Variable" pricing is code for more expensive. Period. Watch the Amazon store. They start with a bunch of tunes at 89 cents, but once it becomes successful, watch the prices go up and up and up. The same thing happened with CDs.
This NBC guy just proved my point by admitting that NBC was pressuring Apple to up the price on Heroes, its most popular show. What would have stopped them from making it $4.99 the following year? or $5.99 the year after that?
These companies are pissed at Apple because they don't like to relinquish control. That's all there is to it. Jobs had the same issues with Disney and Pixar. Until Pixar kicked the crap out of Disney year after year. And then Jobs and Pixar effectively took over Disney Animation altogether. (Disney "bought" Pixar, but Jobs became top stock holder, and The Pixar executive staff all took top positions at the Animation studio.) With any luck, Apple will buy some prominent indie studios and make its own content. Let the big networks go gently into that good night. I can live without another season of Heroes.
"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."
Ah what cruel people Apple are!?! I'd have to agree with NBC, Apple should pay a portion of their hardware profit, but only the same portion as every TV maker pays NBC now, and every DVD player manufacturer is required to pay.
:-)
what's so wrong with the concept of variable pricing? It doesn't seem an unreasonable thing to ask for. After all, we're all used to DVDs for feature films or successful TV shoes costing more when they first come out and then falling over time. Is this a problem?
Good question. I think it's mainly that Apple thinks they see a new model for TV that works for everyone, and is trying to kick start this model. For instance, the local station makes about 50c per viewer when you watch Lost on them (via advertising), and NBC only gets a portion of that. So if you assume 2 viewers of an iTunes purchase, for $1, NBC would be ahead of the TV model. However, NBC doesn't want to replace the TV model, they want to add a new model (or maybe upgrade the DVD model). It involves higher profits per show but far fewer buyers per show. Not Apple's desire.
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%!
Fantastic analysis!
I think that JZ is, well, stretching the truth (to say the least).
AppleTV2 needs to add torrent capability and DVR. That'll show 'em.
I doubt they'll do pirate torrents, but they are probably seriously considering their DVR options. NBC's moves could be great for us!
Just making up an example that might work VERY well for Apple, and encourage deals with Disney/NBC/Fox/etc.
They could offer a DVR AppleTV with multiple options
1) record & watch a live/delayed TV show just like TiVo does, skip ads etc.
2) download for free a TV show with only TWO ads per ad break (google video ads?), customised to your own interests, and NOT skippable
3) pay $1 to download & watch a TV show (without ads) multiple times in a one month period.
4) pay $2 to own a TV show.
So for NBC, your AppleTV would only have option #1. And we'd be able to skip through the ads entirely.
And for Disney/ABC, your AppleTV might remove option #1 - just have options #2 and #4. ABC gets $2 per show, or FORCES you to watch a couple of customised ads. This is good for Disney/ABC.... much better than following NBC's decision and having you skip ads.
(Note: It would save Apple money if ABC viewers record FTA instead of downloading, but I don't think this is crucial to them)
What do you think? Could Apple legally do this? Technically do this? Would it encourage NBC?
NBC says it profited 15 million not 15 million in Revenue. There is a difference.
How much did they have to pay the production company, ads, who know what else they throw in there.
In theory NBC could have reaped all the the 199M in revenue and still claimed 15 million in profit.
As some music artist and old school TV people about the studios "accounting". Example... the networks claimed that some of James Garners old shows never made money even thought they were hits and were on the air for a number of years. He had to sue them to get the books opened.
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%!
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%!
Like most of the show biz entities, NBC Universal is probably using "creative accounting". They're all hiding the true amounts. Be interesting if Jobs came out and refuted that number.