An Open Letter to NBC re: Leaving Apple’s iTunes Store | iLounge Article

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An Open Letter to NBC re: Leaving Apple’s iTunes Store

Hi, NBC. It’s me, Jeremy. You probably don’t know me, but I’m one of your customers. That’s right, “customers.” Two years ago, that word wouldn’t have made any sense to either of us. The idea of paying money for your TV shows was next to ridiculous to me back then. Even today, I think it’s on the fine edge of foolish, and all it would take is one really dumb move by your company and I’d stop paying to watch your shows.

Today, you did something that comes as close to “really dumb” as you’ll need to get to lose my business entirely. You announced that you’re considering pulling your videos out of the iTunes Store come December over piracy and pricing concerns. The New York Times also reported that you’re holding back on selling movies through iTunes because you’re worried about piracy.


TiVo’s Series 2 DVRs can automatically record television programs for you, with almost Apple-quality simplicity

Let me explain something to you, because you don’t seem to understand it already. Your TV shows are available every day, every week, and every month of the year for free. They fly through the air (and travel through cables) at no a la carte charge to customers. There was also this thing called a VCR, which more recently has been replaced by something much better called a PVR (personal video recorder) or DVR (digital video recorder), which people can rent from any cable or satellite company, or buy for their TVs or computers. These devices record your free TV shows and let people watch them later. With only a few button presses, people can now even record an entire season of your shows automatically and watch it whenever they want. For free.

In other words, the per-episode price people are accustomed to paying for what you show on television is “zero,” or something very close to it. Most people are also not so addicted to what you are producing that they would suddenly start paying for it if you stopped offering it for free. In truth, I’ve personally found it hard to convince close friends to shell out $1.99 on iTunes for a single episode of a show they aren’t already interested in seeing—I know, I’ve tried, and I wind up “gifting” those shows half of the time.

 

That brings me to iTunes. Two years ago, Apple created a place for you to sell your TV shows, and has let you try a few pricing tests since then. I remember laughing really hard when you tried to sell individual Saturday Night Live skits for $1.99 per download—not because the show was funny, but because the idea of paying $2 to watch 3 minutes of Goat Boy or Debbie Downer was just on-its-face preposterous. I’ve also seen you give away content as an incentive to become interested in new shows I didn’t care much about, like Flash Gordon. Sometimes it works. Sometimes it doesn’t. But don’t blame Apple.

What you should have learned from the iTunes experiment is simple: Apple is helping you make money, and build fan bases. Shows like The Office that were going nowhere suddenly developed religious fans and—in my case—customers. I missed the first and half of the second seasons of The Office because nothing you did to promote the show worked properly. Then, one day while I was on vacation, a friend recommended the show. So I downloaded an episode from iTunes. Then I downloaded the entire series. I let my now-wife watch, then she and I both got our fathers (and other family members) hooked, and so on. The same thing happened with Battlestar Galactica, and this week, I bought the entire first season of Heroes. It’s purely coincidence, I think, that The New York Times reported this morning that those are your three most popular shows on iTunes.

Without iTunes, this would never have happened. I want to underscore the word “never.” I love these shows now, but I was completely losing interest in television until the iTunes Store made the video content conveniently available. Like it or not, the Apple pricing and piracy provisions you’re protesting have worked almost exactly as they should have. Most of your customers feel that the per-episode and per season prices could stand to be a little lower, especially overseas, but somehow I doubt that you are fighting with Apple to lower your prices. TV show prices just effectively went up in the U.K., after all. [Note: Following publication of this editorial, Apple announced that NBC was attempting to force a price increase to $4.99 per episode.]

 


NetFlix rents 3 DVDs at once for $17 per month, cheaper than buying DVD box sets or an entire show’s season through iTunes

And piracy? If you have an objection to Apple’s FairPlay system, let me acquaint you with the world’s three best alternatives. First, there’s the DVD. Put it into any computer, run a free program on it, and a couple of hours later, its contents can be transferred a million times over to anyone. Sure, you make money on DVD sales, but why buy a DVD when you can just rent it? Next-generation video discs with more piracy protection? Almost no one has HD-DVD or Blu-Ray Disc players yet. And the security on those things was already cracked, too.

Next, there’s Bittorrent—or, put another way, massively distributed file-sharing services. Apple takes until Friday to post Thursday’s episodes of TV shows at 640x480 (or lower) resolution, charging $1.99 and locking the files against copying. Bittorrent and its alternatives post the same content in high-definition for free with zero piracy protection within hours of the original airtime. You’d have to be stupid, lazy, or really honest to pay 2 bucks for something you can get in higher quality, with no piracy restrictions, and earlier for free.

 


Elgato’s eyeTV 250 is only one of many computer-based TV and HDTV recording solutions now available

Consider me one of the “really honest” ones. But I prefer the third option: the PVR. My TiVo is now set up to record each of my favorite shows—again, for free—and I can watch them immediately after they’re aired. They can be stored indefinitely on my hard drive or DVDs. Just like the millions of other people out there with PVRs, I pay nothing for this, and it’s completely legal.

I have to admit one thing: I’ve also been buying your DVD box sets on occasion. The Heroes season I mentioned above? I purchased it this Tuesday on disc. It didn’t seem to make any sense to me to pay $43 for the season at iTunes when I could buy a higher-quality box set, complete with extra features, for $37 at a local store. Interestingly, my wife bought us The Office Season 2 last year, and I pre-ordered Season 3 a week or two ago—despite the fact that we have iTunes and PVR copies of the same episodes. Also, once I’m done watching the DVDs, I could loan them to friends. Or sell them. I can’t do either of those things with my iTunes downloads.

If you’re concerned about piracy of what you’re selling through iTunes, my suggestion would be to take a quick look at the fact that you’re distributing your content in completely unprotected or compromised ways every single day. FairPlay is the smartest, most effective protection you have.

 


TiVo content can be transferred to your computer for later big screen or portable viewing

So, if for some crazy, misguided reason you ultimately pull out of iTunes or try to raise your prices beyond today’s level, two things are going to happen. First, I’m going to stop paying money for any of your shows, and recommend that iLounge readers do the same thing. Seriously. My PVR works wonderfully, so I’ll just record for free anything that vaguely interests me, and show others how to do the same. I’ve been on the fine edge of greater PVR interest for the past couple of years, but the iTunes Store has mostly staved that off. I’ll extend this to box set DVD purchases, too; I really don’t need archival-quality copies of network programming I’ve already recorded.

Second, I’m going to decide to stop back-sampling your shows. If something doesn’t interest me at the beginning of its season, I’m not going to pick it up mid-stream and become a loyal viewer thereafter. Instead, I’ll devote my interest—and my dollars—to programs from your competitors. I hope that iLounge readers would do the same. There are lots of channels out there, and I’m certain that I can find great alternatives on ABC, CBS, Fox, or any of the other stations represented on iTunes.

Granted, The Office, Battlestar Galactica, and Heroes are excellent shows; I’d hate to give them up. But if you leave iTunes, I won’t have to. I’ll just stop paying for them. And I’ll enjoy watching how your concerns over pricing and piracy work themselves out without Apple, and customers like me, on your side.

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Comments

1

well, put, and my sentiments exactly.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 12:31 PM (CDT)

1

I feel the same way - especially since they make so much money from advertising, product placement, etc. My new 6G wireless iPod ( crosses fingers) will work just as well without NBC iTunes contributions. Especially since I’ll just get the same shows another way.

Who’s up for an NBC iTunes boycott starting today up through November Sweeps?

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 12:38 PM (CDT)

1

I agree completely, and I also think that NBC is just being plain greedy.

Seriously, if they stop selling via iTunes, where else are they going to sell?  There’s nowhere else that has the sheer number of video ipods and the like (e.g., QT viewing on the Mac/PC).  NBC needs to stop looking at this for pure profit, and start looking at iTunes as a medium for building interest in shows, which then leads to more advertising profit.  A venue like iTunes can help ratings go up, and it’s just crazy to ignore such a medium, especially as there’s no other significant alternative.

What are they going to do next?  Ignore and stop using the internet?

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 12:44 PM (CDT)

1

Nice!

My thoughts too. Another case if TV execs sitting in an ivory tower thinking they can charge what they want. They’re lucky they have an audience with the iTunes downloads.

Now if only they had the brains to actually read and understand what you wrote. A tall order, but Palm did when brighthand wrote an open letter:
http://blog.palm.com/palm/2007/08/thanks-engadget.html

Maybe I’m expecting too much from NBC execs.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 12:52 PM (CDT)

1

Very well put article Jeremy.

I wonder how NBC will look after Apple announces this great new iPod line (that plays TV shows beautifully, on-the-go, and with the same flexibility of being DRM-enabled but not restrictive about it) and they have just put themselves out of the game.

Will they apologize? Will Apple stop using their shows in their ads?

Time will tell.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:08 PM (CDT)

1

Excellent article. And wasn’t NBC the FOURTH rated network all last season? Talk about shooting yourself in the foot. iTunes was probably the best thing they had going for them in terms of revenue. Idiots.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:13 PM (CDT)

1

Jeremy, I must disagree with you.  I applaud NBC for pulling its content.  If they don’t like their revenue share, they should take their marbles and go home.  More power to them.  I love NBC shows, have bought them off of iTunes, but I can just as easily go to the NBC site and buy my content there and reward the content creater as opposed to the content aggregator.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:19 PM (CDT)

1

Edgar, while you do have a point, NBC is cutting themselves off from a large chunk of potential customers—customers who can increase their ratings.  Yes, people could buy/download from NBC’s site, but I’d be willing to bet that the number of NBC purchases/downloads is a h*ll of a lot smaller than the iTunes number.  There are a lot of people who view shows on their iPods, and NBC has just made a decision which cuts them off.

Note that it’s not about you (or me).  It’s about the sheer number of eyeballs, and there are a lot more eyeballs at the iTunes site.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:38 PM (CDT)

1

Edgar - will you buy NBC’s content if they double their price?

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:48 PM (CDT)

1

Superb editorial, Jeremy.

And folks, this isn’t NBC as much as it is Universal, who are simply extending their existing beef with Apple from the music to the TV realm. And apart from the higher prices they want, I’ll be this is about something else too.

Remember, Microsoft bent over for these goons and is paying them a cut of every Zune sold. You know they’s love to be sucking money out of Apple the same way. I’d be shocked if this isn’t a large part of why these negotiations are breaking down. Uni wants their cut of iPods sales OR they want big hikes on the song/episode prices. If they don’t get either, they take their ball and go home.

I applaud Apple for standing up and saying no to this extortion. I hope and expect that this will blow up on Universal’s face.

Like Jeremy, I’ll continue to watch NBS/Universal shows I enjoy thanks to my HD TiVo and my $40 Silver Sensor antenna which pulls them out of the ether for free. But they’re not getting any more of my money.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 1:56 PM (CDT)

1

I am very selective about who my content providers are. I lost interest in television several years ago, and currently I don’t watch more than a half hour every month.

I don’t understand what all the angst is about; if the content providers insist on binding their product with DRM, and you don’t like that, don’t just quit buying it or renting it. Instead you should flat out ignore it, including the bit torrents and the sneakernets. You do not _need_ those products, especially under those terms. You also do not need to be pushed into illegal acts to enjoy them. Just Ignore Them!

Advocate _compatible_ providers! Develop a good relationship with providers that you can work with! Promote this position!

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 2:08 PM (CDT)

1

Fangorn,

It is important to note that NBC/Universal is owned by General Electric, while the Universal Music Group is owned by Vivendi, a completely separate company. While they may share a common name, they are not, in fact, related in terms of negotiations with Apple.

NBC/Universal: http://www.nbcuni.com/

UMG/Vivendi: http://www.vivendi.com/corp/en/subsidiaries/index_music.php

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 2:22 PM (CDT)

1

I completely agree with you Jeremy. As a new fan of The Office and Heroes I purchase them from iTunes because I may be a little lazy at times, but I could very well bring them into my iTunes either from Tivo or my purchased DVDs. I really think NBC instead of trying to increase viewer ship of the very little pool of good shows they have left they are pushing us away. My Supersized Thursday loyalty towards NBC ended when “Friends” (which had NBC on a pedestal under my eyes) ended. I rarely turned to NBC after that. Now is when I’m getting hooked with The Office and Heroes. I will be really sad if they get out of iTunes but on the positive side I’ll stop being lazy.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 3:05 PM (CDT)

1

I whole heartedly agree with every point you have made in the article. As a college student with iTunes as my primary (and really only) source of such shows as The Office, Heroes, and other NBC shows I was quite disheartened when I read that NBC was thinking yanking their shows. However I moved far past disheartened when this morning I read the press release from Apple that said that NBC was trying to get more for their shows. I really hope for the sake of college students everywhere without cable television in their rooms that NBC comes to their senses and realizes just how many suckers like myself there are out there.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 3:34 PM (CDT)

1

NBC = Fools….

I never watched your crummy channel until the Office came to iTunes. You do not know the implications of your actions NBC- from all who do not watch a whole lot of TV in the first place you are offending a whole lot of new viewers like myself who buy your shows to watch them on our terms by carrying them around with us in ipods. I will not chase your shows on TV for ratings and I WILL NOT tune in to web feeds of your show, I like the Office - but I like the Office on MY TERMS, as an iTunes purchase. NBC you didn’t have me as a fan before iTunes, then you had me as a new fan at my terms, now YOU WON’T EVER GET ME BACK…...

Good job, Apple.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 3:59 PM (CDT)

1

Hear, hear! NBC- Nuts, Bolts, and Crazies! Something Homer Simpson would think is a good idea.

A open letter to probably closed and obviousley small minds.

Keep up the good fight!

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 4:31 PM (CDT)

1

What a mess. Well couple this story and one I read about the other day where the MPAA is requiring restrictions on our equipment for VoD and once again fears of piracy and copyright infringement are going to change the landscape of electronics. Just the requirement that no part of the digital signal may touch an analog pathway in any computer, PVR, DVR, whatever,from input to speakers, the MPAA want total control of our electronics. From what NBC has said it appears broadcast is going the same way. What a mess. How much will we be willing to spend to watch video where and when we want?

Cart

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 4:34 PM (CDT)

1

kudos Jeremy, I’m with you.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 4:42 PM (CDT)

1

I completely agree. I used to buy the Office and Heroes from itunes. Now I will have to resort to tivo or simply torrents. Your loss NBC.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 4:49 PM (CDT)

1

Great letter… if it’s not on iTunes, for which I’m willing to pay, it’s going to be some ‘other’ way, which will likely be torrents/IRC.  Big mistake, NBC.

Posted by Jeremy Horwitz in East Amherst, NY, USA on August 31, 2007 at 4:49 PM (CDT)

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