Federal rules ensure Apple's iTunes has right to Comcast's NBC content
Comcast agreed to continue licensing of NBC content to online video services like Apple's iTunes in order to receive government approval of its acquisition of broadcast network NBC.
In the terms of the acquisition approved by the U.S. government, cable provider Comcast has agreed to let online rivals that compete with its own cable subscriptions and online "Fancast" product license NBC programming, according to The Associated Press. Though NBC's shows are already available on the iTunes Store, NBC has not participated in Apple's 99-cent iTunes TV show rental model for the new Apple TV.
"We do not think 99 cents is the right price point for our content," former NBC Universal Chief Executive Jeff Zucker said last year. Zucker was fired by Comcast in September. "We though it would devalue our content."
But now it's also possible Comcast could allow NBC content to become available for rent on the Apple TV and iTunes in order to appease the federal government, based on the terms the company agreed to. Regulators scrutinizing Comcast's acquisition of NBC showed concern that online media services like iTunes would suffer from a cable provider owning a broadcast network.
Products like iTunes are sometimes used by customers to "cut the cord" and cancel their cable subscription. There's also the possibility that Comcast could "throttle" bandwidth for services like Netflix and iTunes, making downloads slower or streaming content stutter and become unwatchable.
Federal officials reportedly attached dozens of conditions to the government's approval of the Comcast-NBC deal. Specifically, Comcast must sell its content to online video services, though no specific provisions were made related to 99-cent Apple TV rentals.
In addition, Comcast may not interfere with video traffic for other, competing services over its broadband network, and it must sell standalone Internet services with 6 megabit download speeds for about $50 per month, without being tied to a cable TV package.
"Although these requirements offer no guarantees of success for new online video services, they aim to ensure that Comcast cannot impede the online businesses," the report said. "They also break new ground by giving Internet rivals some of the same protections that have long been available to satellite companies and other subscription TV competitors."
NBC has had a tumultuous relationship with Apple and its iTunes service in the past, before the Comcast acquisition. In August of 2007, NBC abruptly pulled its content from iTunes after Apple wouldn't agree to doubling the wholesale price of each TV episode.
NBC eventually returned to the iTunes Store in September 2008, when Apple began offering high-definition content for $2.99 per episode, compared with the standard-definition pricing of $1.99 for an episode. The new requirements from federal regulators would make it more difficult for Comcast to pull NBC content from iTunes again.
And while NBC has continued to hold out from offering content for the new streaming-centric Apple TV, rival networks Fox and ABC both agreed to be launch partners by offering 99-cent TV episode rentals. TV executives were said to be "uncomfortable" with Apple's pricing model, but some were willing to go forward with what they consider to be an "experiment."
In the terms of the acquisition approved by the U.S. government, cable provider Comcast has agreed to let online rivals that compete with its own cable subscriptions and online "Fancast" product license NBC programming, according to The Associated Press. Though NBC's shows are already available on the iTunes Store, NBC has not participated in Apple's 99-cent iTunes TV show rental model for the new Apple TV.
"We do not think 99 cents is the right price point for our content," former NBC Universal Chief Executive Jeff Zucker said last year. Zucker was fired by Comcast in September. "We though it would devalue our content."
But now it's also possible Comcast could allow NBC content to become available for rent on the Apple TV and iTunes in order to appease the federal government, based on the terms the company agreed to. Regulators scrutinizing Comcast's acquisition of NBC showed concern that online media services like iTunes would suffer from a cable provider owning a broadcast network.
Products like iTunes are sometimes used by customers to "cut the cord" and cancel their cable subscription. There's also the possibility that Comcast could "throttle" bandwidth for services like Netflix and iTunes, making downloads slower or streaming content stutter and become unwatchable.
Federal officials reportedly attached dozens of conditions to the government's approval of the Comcast-NBC deal. Specifically, Comcast must sell its content to online video services, though no specific provisions were made related to 99-cent Apple TV rentals.
In addition, Comcast may not interfere with video traffic for other, competing services over its broadband network, and it must sell standalone Internet services with 6 megabit download speeds for about $50 per month, without being tied to a cable TV package.
"Although these requirements offer no guarantees of success for new online video services, they aim to ensure that Comcast cannot impede the online businesses," the report said. "They also break new ground by giving Internet rivals some of the same protections that have long been available to satellite companies and other subscription TV competitors."
NBC has had a tumultuous relationship with Apple and its iTunes service in the past, before the Comcast acquisition. In August of 2007, NBC abruptly pulled its content from iTunes after Apple wouldn't agree to doubling the wholesale price of each TV episode.
NBC eventually returned to the iTunes Store in September 2008, when Apple began offering high-definition content for $2.99 per episode, compared with the standard-definition pricing of $1.99 for an episode. The new requirements from federal regulators would make it more difficult for Comcast to pull NBC content from iTunes again.
And while NBC has continued to hold out from offering content for the new streaming-centric Apple TV, rival networks Fox and ABC both agreed to be launch partners by offering 99-cent TV episode rentals. TV executives were said to be "uncomfortable" with Apple's pricing model, but some were willing to go forward with what they consider to be an "experiment."
Comments
Try 25¢, and I'll think about it.
Ha! 99¢ for an episode of ANYTHING on TV is way over-priced.
Try 25¢, and I'll think about it.
Well, if I watch it on TV, there's no incremental cost. Seems to me that $0.99 is free money for them.
Bottom line, though, is that the market will eventually determine the price. If demand is sky high, Apple can raise the price and the network will get more. If demand is low, then the price is probably too high.
Network execs can whine about the price all they want, but there's no way to know what the market will actually pay without trying it. Personally, I'm guessing that $0.99 is about right, but only time will tell.
Now all NBC has to do is allow apple to rent episodes for $17 each and the feds are happy. Perfect.
Ultimately though, this Apple TV will prove to be an everlasting-hobby until the day Apple can work out some sort of iTunes subscription model.
I have Sky+ here in Ireland and I can tell you they provide some of the worst service I have ever come across. You can't even opt-out of their monthly magazine. You can choose to get it by e-mail, but my understanding is that takes "a few months" to go through. They never respond to e-mail help and their telephone help costs "a small fortune". I'm talking a minimum of €15 per call, and sometimes much more. My brother paid over €40 for a call to Sky a couple of years back. And their website where you manage your Sky account? Holy crap it's the slowest most confusing "manipulative" website ever conceived. When you try to sign up you have to opt-out of them "sharing" your personal information. And rest assured they don't want you too. The form is design specifically so you miss that part. I don't trust them and I detest them. Murdock is a slime-ball.
You need someone like Apple to come along and clean up this MESS. Apple is clever because they know deep down it's good business and good for their brand if they actually care about users privacy and their experience(s). I complained the other night about the Zynga app to iTunes and they gave me two free movie rentals. I had an issue with a product sold on the App Store and I came away smiling. This is the kind of service we need in the TV space, and that won't happen until we have a monthly subscription.
Sure nobody watches 24/7, but no matter how you work it out $0.99/show is higher than what cable charges.
While I'm happy that this happens to work out in consumers' favor, it's still sad that the Feds can tell a company what to do. Actual competition works so much better, and we don't even need to consider the long run.
I find it fascinating whenever I hear say this, or something like this. Mainly because I've always thought the opposite entirely and so when I find someone who thinks so differently it always makes me double take. I'm not stating an opinion on who is correct here, please understand this is not an attack just an observation.
I never really thought about how differently people talk until I heard a journalist from BBC Radio 4 talking about guns and how US citizens felt about them, what images it conjured up, and now! Fantastic.
My point of view is that intervention in businesses will always be required because the people running them have one goal, dominate their industry and absolutely grind everyone else down into the ground and then lift the price once no one else can give the consumer leverage (competition) to keep things low. Which would also mean effort, talent, productivity and class going out of that area of business as they can no longer be bothered to hire people with talent, just accountants who know something about TV shows.
For my part I see this as self evident and inevitable. Once the famous Henry Ford vs the Shareholders came down on the side of the shareholders it's said that, to run a business on behalf of shareholders requires a psychopath or at best, a sociopath to do 'hard' business requires.
Assuming you're renting an hour long show, and you watch 24/7, $0.99/show works out to over $700/month. This is far higher than what cable is charging
Sure nobody watches 24/7, but no matter how you work it out $0.99/show is higher than what cable charges.
I think in order to find the true value of iTunes content you'd need to do something like this.
$0.99 x number of shows you watch in a week.
minus how much you'd be willing to pay for no advertising.
minus what you believe been able to watch it on any of your devices is worth.
minus what you believe been able to watch it at a time of your choosing, without adverts is worth.
compare to cable cost per month.
If you want to be picky, try this.
When you buy an episode of a TV show on iTunes you are directly telling the shows producers and whoever else runs it that you paid for it. That's just not money, it's a vote which TV doesn't give you (I don't think). Might be worth something to some people.
Assuming you're renting an hour long show, and you watch 24/7, $0.99/show works out to over $700/month. This is far higher than what cable is charging.
This, for a start, assumes you don't work or sleep. I have to assume you do. That's your argument's first flaw.
sure, i hate ads and try to ignore them, but i'd rather watch ads than pay a dollar per episode.
Why not free with ads??? its the way they've been doing it since the beginning of television history.
Free? So you pay no monthly fee for TV then?
Free? So you pay no monthly fee for TV then?
yes...
I think in order to find the true value of iTunes content you'd need to do something like this.
$0.99 x number of shows you watch in a week.
minus how much you'd be willing to pay for no advertising.
minus what you believe been able to watch it on any of your devices is worth.
minus what you believe been able to watch it at a time of your choosing, without adverts is worth.
compare to cable cost per month.
If you want to be picky, try this.
When you buy an episode of a TV show on iTunes you are directly telling the shows producers and whoever else runs it that you paid for it. That's just not money, it's a vote which TV doesn't give you (I don't think). Might be worth something to some people.
If I disconnect my cable then the number of shows being rented would be quite large.
I agree that there is additional value for the reasons you have listed. I'm not sure I'm willing to pay $100s for that though.
The idea of voting for good TV shows is intriguing but given what "seems" to be popular on regular TV I'm not sure whether it is a good idea or not.
This, for a start, assumes you don't work or sleep. I have to assume you do. That's your argument's first flaw.
If you were able to read past the first sentence of my comment you would have seen that I qualified it. My conclusion is still valid.
While I'm happy that this happens to work out in consumers' favor, it's still sad that the Feds can tell a company what to do. Actual competition works so much better, and we don't even need to consider the long run.
Complete freedom leads to powerful/rich/successful people taking advantage of weak/poor/unsuccessful people. If companies were allowed to do whatever they want, you'd be living in a company house, shopping at a company store, and would basically be an indentured servant. No really, read all about it in history books.
This isn't to say we need more or less regulation. Just that zero regulation is not desirable.
Assuming you're renting an hour long show, and you watch 24/7, $0.99/show works out to over $700/month. This is far higher than what cable is charging
Sure nobody watches 24/7, but no matter how you work it out $0.99/show is higher than what cable charges.
I watch about 3 TV seasons a year, making iTunes an absolute bargain over any cable subscription package.
I watch about 3 TV seasons a year, making iTunes an absolute bargain over any cable subscription package.
When iTunes has live local news, weather, sports, and financial reports, I'll consider canceling my TV.