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NBC Universal responds to Apple pulling fall lineup

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By Charles Starrett

Contributing Editor
Published: Saturday, September 1, 2007
News Categories: iTunes

NBC Universal has issued a statement responding to Apple’s announcement that it will not be offering the network’s fall lineup of programming, due to NBC’s non-renewal of its iTunes contract. In its statement, Apple claimed that contract talks broke down between the two companies due to NBC’s demand to raise wholesale pricing of shows in a manner that would more than double the current price of $1.99 per episode. Cory Shields, executive vice president of communications for NBC Universal, disputed these claims in a prepared statement.

“We never asked to double the wholesale price for our TV shows,” said Shields. “In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.” He added, “It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying.” Shields went on to say that NBC also asked Apple to take “concrete steps” to prevent piracy, “since it is estimated that the typical iPod contains a significant amount of illegally downloaded material.” Apple has yet to respond to the statement.

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Comments

41

I agree it is NBC’s choice, as they do own the material and ownership has it’s privileges.  But the comment about illegal material - WTF? 

NBC is insane.  Hey NBC, it’s a digital world and in case nobody has told you, it’s not that hard to record your shows and transfer them to an iPod for free.  Hint, just look what Napster did to the record industry.  Oh well, it’s your revenue loss and I’m sure your share holders will be pleased with your efforts - not to mention, 90% of your shows suck anyway.

Posted by Lorne on September 4, 2007 at 8:58 AM (PDT)

42

Alright, enough with the self righteous chest thumping about the illegal content comment. Anyone who seriously believes that it is even a majority (as in a mere 50.0000001%) of iPod owners that legitimately own 100% of the files on their iPod in complete compliance with existing copyright laws and regulations, is in sore need of a reality check. Most people may not consider themselves pirates, but you’re going to have to come up with actual data beyond this thread that most people don’t have at least a few files that they copied from a friend, or the library, or they ripped from their CD that was subsequently lost, or they had to resort to something like isobuster to circumvent the copy protection on the CD, etc. It’s just far too easy to violate these media corporations’ notion of legitmate use to take the comment for anything other than what it was: a truthful statement under existing law, but ultimately just a red herring on NBC’s part to attempt to leverage concessions from Apple by casting aspersions on their “weak record” of aiding the media corporations in enforcing copyright violations.

Posted by Chip on September 4, 2007 at 12:02 PM (PDT)

43

Chip, though I agree with the second half of your comment, the first half is a little off-base. These companies take this “guilty till proven innocent” stance much to their own detriment whether right or wrong.

No matter how you cut it, NBC/U has: 1) alienated themselves from a strong and established online sales-portal, and 2) publicly stated that more than 100,000,000 devices have illegal property contained within them without once even suggesting that perhaps there’s more to this than meets the eye, like perhaps an outdated legal framework. This second point is crucial since it’s occurring to more and more *other* people every day, including content-producers who are choosing to go without the backing of companies like NBC/U. Just for giggles, throw in the headlines lately that site falling rates of TV viewership across the board.

Whether they’re correct from a legal standpoint is irrelevent. The discussion was about where to sell their shows. For no good reason, they resorted to accusations aimed at a major chunk of the content-buying public. It’s a PR and Marketing fiasco. They’re painting themselves into a corner, and stupid comments like that only make things worse.

Posted by Laer on September 4, 2007 at 4:20 PM (PDT)

44

The problem is that it’s not stupid, it’s accurate. Most of us are “pirates” to one degree or another. Even something most people would consider “their right”, such as converting a file captured with their computer’s DVR program for viewing on their iPod is by no means necessarily even legal under the law let alone a right. And while there are people who’ve never so much as accepted a burned CD from a friend just trying to be nice, the vast majority have at least some music and/or video in their library that wasn’t expressly licensed to them for such use. It’s childish to take offense at an accusation that doesn’t take a lot of nuance to realise is true on it’s face: most are guilty as charged. The degree of guilt may vary, and whether in a free society they even should be considered guilty is not the issue, it is simply a matter of whether or not it’s fair to say that most people are not 100% in compliance with copyright regulations, and we’re not.

I’m not, my wife’s not, my daughter’s not, my mother’s not, my brother’s not, my friends are not. Heck, I know exactly one person that isn’t in any violation of copyright and that’s my dad, but that’s only because he has not a single CD, let alone an iPod, and the only DVDs and Videos he has are the ones we’ve bought for him as gifts.

I don’t agree with NBC’s general stance at all, but let’s not pretend that he’s really insulting us. Collectively, we are guilty, and anyone who pretends otherwise is ignoring reality.

Posted by Chip on September 4, 2007 at 6:21 PM (PDT)

45

John, finally a voice of reason.  Neither is wholly to blame and as for NBC—their announcement that they will be selling content via Amazon include a nice little nugget—specifically that those that bought one or two episodes of a series will be able to get the full season at a pro-rated price rather than iTunes limitation of episode by episode purchases or full-season (which means that the end user had to purchase content twice unless he/she went through the inconvenience of puchasing each episode individually).

I really don’t think NBC was out to screw the customer.  Rather, I think iTunes was being inflexible in its pricing structure and NBC was getting concerned that iTunes had too much power in the video distribution space.

Posted by Edgar Newt on September 4, 2007 at 6:34 PM (PDT)

46

I don’t disagree with any of your points. I do disagree, though, that an obsolete legal framework which criminalizes such a large swath of the population is right or just. And a huge company’s use of that legal framework to brow-beat such a massive chuck of its customer-base is simply not going to work. (Do you or your family plan to change their behavior and delete all of your “pirated” materials?)

As for me, I simply stopped buying music and started writing my own when all the RIAA crap started and that’s going quite well for me, thank you. (And yes, I give it away!)

We’ll see how well this all turns out for NBC/U.

Posted by Laer on September 5, 2007 at 4:14 AM (PDT)

47

“It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying.”

Yeah, so if more people buy iPods, they’ll be more iPods to download the less expensive shows onto!  So instead of selling 1 for $5.00, they’ll sell 5 for $1.00!  Volume, people, volume, Volume, VOLUME!

Posted by Johnny on September 5, 2007 at 9:36 AM (PDT)

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