NBC Universal unlikely to offer 99-cent iTunes rentals | iLounge News

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NBC Universal unlikely to offer 99-cent iTunes rentals

Speaking at a Goldman Sachs investor conference, NBC Universal CEO Jeff Zucker said his company is unlikely to offer 99-cent TV episode rentals through iTunes. “We do not think 99 cents is the right price point for our content. ... We thought it would devalue our content,” Zucker said, pointing to the fact that episodes are already sold for $1.99 on the iTunes Store. Notably, Zucker was also CEO in 2007 when the company decided not to renew its contract with Apple to sell its television shows on the iTunes Store; he later said the company was seeking a cut of Apple’s hardware sales as well as flexible pricing experimentation. “Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money. They did not want to share in what they were making off the hardware or allow us to adjust pricing,” Zucker said at the time. In addition, the company is also in the process of merging with cable giant Comcast’s entertainment unit, pending regulatory approval.

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Comments

1

How can you devalue something by charging *more* than the average customer is used to paying for it? For your average American household, the per episode price paid for watching and/or DVRing a television episode is far below the $0.99 Apple is asking. $0.99 is already stretching consumer credulity.

I just wish these suits would be honest:
“No one else but Apple has shown any ability to harness consumer demand for high quality television on demand but we’ll be damned if we’re going to give them the sort of power over episodic entertainment they have with the music singles industry no matter how good of a deal it appears for us in the short term”

They might appear stubborn and foolish, but at least they wouldn’t look like the last time they left their ivory tower was sometime in 2004.

Posted by Code Monkey in Midstate New York on September 23, 2010 at 6:13 AM (PDT)

2

Exactly. 

Purchased TV Shows have some intrinsic value for their $2-$3 price tag as there are those who like to actually keep them rather than simply watching them once and throwing them away.  I don’t see how $0.99 to watch an episode essentially once (well, as many times as you like in 48-hours) is devaluing their content.

I also have to wonder how having their content available on Netflix as part of an unlimited monthly subscription plan doesn’t “devalue their content?”

I’ll PVR something before I spend any money renting it, as it’s generally the same experience and I have the option of keeping it for longer on my PVR. Not to mention that Apple and the studios have tied up the rentals with so may inane usage restrictions there’s almost no longer any benefit to renting vs recording for TV shows.  Device portability used to be the main advantage, but that’s fallen by the wayside with the new TV Show rentals (and even to some degree with movie rentals).

Not to mention that NBC is being further disingenuous by comparing this to their $1.99 TV content that is for sale. NBC’s HD TV shows are $2.99, like everybody else’s.  Most of the TV Show Rentals at this point are for HD shows, and that’s what Apple is pushing.

The irony here is that they should be less concerned about rentals, which have repeat customer potential and compete directly with other technologies like PVRs, than they are about selling their content outright, which is completely a one-shot deal.  I guess we should probably be happy that the purchasable content arrived on the iTunes Store first.

Posted by Jesse Hollington in Toronto on September 23, 2010 at 6:36 AM (PDT)

3

I suspect what WB and NBC are really saying is that they expect rentals to cut into their profits when they sell(not rent) episodes on iTunes.  They’re probably right on that, too.  Assuming that people are actually buying their episodes on iTunes.  But it seems like they’d potentially sell a lot more at a lower price, and, if the person liked the show enough, they would have to buy it again in some format if they wanted it long term.  I wonder if they’re not seeing all those $1.99 iTunes sales being cut in half and not thinking that they’re going to increase sales enough to make up for it.

Maybe they’re right.  I certainly don’t look at iTunes as a major video media outlet.  I watch shows on my television, and if I miss them, I catch them on the network sites or Hulu.  Downloading iTunes videos is a last resort.  It’s like that overpriced convenience store in the airport terminal: They can charge outrageous prices because by the time you get to that store,  your only other option is to go without.  If the networks want to follow that model, then I guess they might as well keep prices as high as possible.  It’s just too bad for them that are so many other ways to get content, some of which cut the networks out of any profits at all.

Posted by Rob E. on September 23, 2010 at 6:42 AM (PDT)

4

The man is obviously delusional. “Apple sold millions of dollars worth of hardware off the back of our content…”. Does he honestly think people bought millions of dollars of ipods and computers just to watch his tv shows and movies? When network execs are that arrogant what hope do we have that they are ever going to price their content reasonably?

Posted by Jesse Garrido on September 23, 2010 at 6:59 AM (PDT)

5

@4: To be honest, he’s probably correct in a literal sense: If even 10,000 people in the United States purchased an Apple product that played protected video and the desire to watch paid-for video content was a key motivator for that purchase, that would amount to millions of dollars worth of hardware “off the back” of their content. Given that they’ve been selling this content for half a decade now and they’ve sold well over 100 million devices during that period, it’s almost a given that this is true. Sure, that’s only 0.005% of such devices sold during this time, but literally, it’s probably correct even if that demographic doesn’t amount to much significance.

Posted by Code Monkey in Midstate New York on September 23, 2010 at 9:16 AM (PDT)

6

To be fair it’s also worth mentioning that for quite some time NBC and other TV content was used in Apple’s advertising and marketing, even going so far as to use TV show artwork on iPod boxes (although I think that was ABC’s content and not NBC’s, but the general point still stands).

Posted by Jesse Hollington in Toronto on September 23, 2010 at 11:22 AM (PDT)

7

I’d have to agree with Code Monkey. The suits in Networkland have overvalued the cost of the shows. That is why Netfilx, in an all you can eat for $9/mo., has a rising stock price. Honestly, I think the AppleTV will be popular for other reasons such as streaming content from your computer, watching free video podcasts from the comfort of your own coach, and renting new releases when you’re too lazy to go to the video store and pay less.

I also think .99 cents is too much for a song, and if it’s priced at $1.29 I check to see if Amazon has it cheaper.

Posted by renderboy on September 24, 2010 at 12:46 AM (PDT)

8

Remember, these are the boneheaded NBC execs who let Conan O’Brien slip away and are left with the fading Jay Leno. Does it surprise you that they are saying this crap.

“Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money. They did not want to share in what they were making off the hardware or allow us to adjust pricing,”

Is Zucker insane!?? A cut of hardware sales!!!??? They wouldn’t have sold squat if it wasn’t for Apple building the content market in this new century. Apple is the #1 online music seller, and I’m pretty sure the video sales aren’t doing too badly either. That guy is on some strong meds and he’s making a losing bet. Here’s a bet. I bet Zucker is gone and NBC sells .99 cent shows on iTunes before 2012. If not, they’ll be watching other networks doing volume sales and eating their lunch. TBS and Conan O’Brien are already laughing all the way to the bank.

Posted by renderboy in Wisconsin on September 24, 2010 at 12:54 AM (PDT)

9

“Is Zucker insane!?? A cut of hardware sales!!!???”

This is exactly what Microsoft offered content owners with the Zune. Now, you’d think these execs could do the math and notice the differences in net contributions to their bottom line between Apple and MS, but that would assume these guys aren’t MBAs and such with their “business math” that your average hard science field college freshman has already surpassed.

Posted by Code Monkey in Midstate New York on September 24, 2010 at 6:07 AM (PDT)

10

And Zucker announces his departure today…

Posted by Code Monkey in Midstate New York on September 24, 2010 at 12:03 PM (PDT)

11

“And Zucker announces his departure today…”

Okay my prediction came true sooner than I throught. I’ll bet that NBC will participate in the .99 cent rentals on AppleTV. Even though the .99 cent rentals still seem too much, they’ll still make money off the people that who wouldn’t consider a permanent episode buy. I’ll bet that market is significant. For me Netflix and Hulu website and Network sites to watch episodes free is better, but I’ll buy the AppleTV to stream stuff I purchased as season packages through iTunes as well as the other movies I have stored on my computer.

Posted by renderboy in Wisconsin on September 26, 2010 at 4:17 PM (PDT)

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