The Other Side of the NBC/iTunes Story? | iLounge Backstage

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The Other Side of the NBC/iTunes Story?

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Friday, August 31, 2007
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A little bird has suggested to me that perhaps this morning’s NBC and Apple story isn’t as straightforward as it appears to be—you know, “bad NBC wants $4.99 per episode, good Apple wants $1.99 per episode.”

It is possible, the bird tweets, that NBC wasn’t attempting to raise its iTunes Store pricing; rather, Apple may have been demanding a larger cut of the $1.99 asking price, and NBC could have responded by offering to raise the per-episode price higher to give both companies as much compensation as they wanted. The part that got mentioned to the press is the crazy per-episode price, not the demand that spawned it. If NBC had agreed, chirps the bird, then other networks could have been forced into similar deals. Instead, it walked.

The bird’s not working for Apple or NBC, so mark this off as just “speculation,” and possibly inaccurate. If true, however, it would be an interesting twist on the story as it’s presently understood.

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Comments

1

The fact remains that NBC wanted to double the wholesale price they charged to Apple, so does it really matter?

Sure, Apple could have kept the price at $1.99 and paid NBC double the old wholesale price, but then they would be losing money.  You can’t blame Apple for not wanting to lose money on the deal.

Posted by Ummm on August 31, 2007 at 1:32 PM (PDT)

2

Yes and no. Apple is not the Robin Hood of the industry. They are just as crooked and corrupt as everyone else. They just make cooler products. It takes two hands to clap and I am sure Apple is just as guilty as NBC.

Posted by Don Trammell on August 31, 2007 at 1:36 PM (PDT)

3

still i prefer to get my shows from iTunes rather than somewhere else. And i do buy DVD Box sets, but its just faster to get them from iTunes, then to my iPod, iPhone, apple tv etc..Handbrake its good, but its not instant.

Posted by zerock on August 31, 2007 at 1:41 PM (PDT)

4

You’ll see, NBC will get their shows back on iTunes, or else people will just torrent them.  I was ready and willing to plunk down $40 for the office and another $40 for heroes, but now I’m just going to find other ways to get them since I don’t have a TV!

It doesn’t sound like Apple to demand more money.  Steve Jobs has always wanted the standard pricing scheme and I’m sure they are trying hard to attract the networks to iTunes to in turn entice customers to buy iPhones and iPods.  I really would bet that it was NBC who wanted larger cuts, and not apple.

Oh, and Don, you can clap with one hand by slapping your own forehead, (or your buddy’s).

Posted by Thayne on August 31, 2007 at 1:46 PM (PDT)

5

Hmm, I don’t think thats accurate.  Cause if NBC said nothing, the current contract would have been renewed. Same pricing scheme, same revenue sharing model.  If Apple wanted more money per sale, then a new contract would have to be made up, forcing Apple not to renew it’s current contract.

Posted by John on August 31, 2007 at 1:57 PM (PDT)

6

I think I’ll wait to pass judgment on this issue until more details (facts) make their way out. As much as I love Apple, I don’t doubt they may have asked for a larger cut, considering the considerable expenses they incur distributing the content to customers, particularly given that the resolution just increased, but the price stayed the same. Apple’s probably operating at a loss now.

Posted by Ted Wood on August 31, 2007 at 1:59 PM (PDT)

7

idoubt this is true. Remember, apple doesn"t make much on the store - it’s on the hardware. 

Also remember that keeping the prices low is in keeping with what Steve Jobs has been saying all along in order to reduce piracy. He wouldn’t be stupid enought to jeopardise that. NBC on the other hand…

Posted by bleh on August 31, 2007 at 2:13 PM (PDT)

8

Possibly inaccurate?  Try totally inaccurate.  The deal auto-renewed at the current terms. NBC ended that, not Apple.

Posted by cesman on August 31, 2007 at 4:07 PM (PDT)

9

The most plausible story going around is that NBC wanted bundling flexibility. Apple already does bundling but in a bonus fashion. What I think NBC wanted was to sell an episode only at the 4.99 price but bundled with something else, so it’s not really 4.99 per episode as Apple said, except if you didn’t give a hoot about the other item in the bundle, then you did pay 4.99 for just the one episode.  To use the music analogy, it’s album pricing and Apple insists on singles pricing.

As for the piracy thing, I hear from insiders that NBC wanted Apple to do something about (block from playing?) illegal TV content on iPod.

Posted by insider on August 31, 2007 at 5:03 PM (PDT)

10

Sorry, your math doesn’t add up. Let’s assume Apple is the bad guy and tries to get a huge cut from the current $1.99 price. Is 75% big enough? Let’s say it is. 75% of $1.99 is $1.50 and let’s say NBC is satisfied with their own cut from the current deal. $1.50 on the top of whatever they get now is less than $3.50. However, NBC wants to bring the price to $4.99. So basically, your saying that the negotiation fails because Apple wants a bigger cut from the $1.99 price is nonsense. Plus, it’s NBC that walked away because Apple didn’t agree to the exorbitant price. It only means NBC won’t get the cut they want. Have you ever heard a studio or a label that balks from getting too big a profit?

Posted by Wallace on August 31, 2007 at 6:02 PM (PDT)

11

It sounds to me like you were talking to a looney bird, or would that be a looney tunes bird.  Me thinks your pidgen, uh I mean bird don’t know his feathers from his, well ,you know.

Posted by mememe on August 31, 2007 at 7:36 PM (PDT)

12

@Thayne,

clap 1 |klap|
verb ( clapped , clapping ) [ trans. ]
strike the palms of (one’s hands) together repeatedly, typically in order to applaud : Agnes clapped her hands in glee | [ intrans. ] the crowd was clapping and cheering.

Oxford American Dictionary

Posted by Don Trammell on September 1, 2007 at 6:59 AM (PDT)

13

don…crooked and corrupt? guilty? Excuse me? What exactly is crooked and corrupt about apple and “everyone else”?

Posted by OnlyShawn on September 2, 2007 at 6:04 PM (PDT)

14

There is a reason that Apple has the most loyal customer base in the world ( since day one)...

Money can’t buy you love.

Amongst others:

Apple cares about all the details that other companies won’t ever risk R&D time expense and effort on and Always delivers Quality.

Posted by tell it straight on September 5, 2007 at 5:43 AM (PDT)

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