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 There was also this thing called a VCR, which more recently has been replaced by something much better called a PVR (personal video recorder) or DVR (digital video recorder), which people can rent from any cable or satellite company, or buy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 640×480 (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.