Apple drops NBC after NBC drops Apple
Posted by Dr. Macenstein
Fans of The Office may have to dust off their VCRs, as Apple today announced that it will not be selling the upcoming season of NBC television shows on its online iTunes Store.
The move follows NBC’s decision to not renew its agreement with iTunes after Apple claims they declined to pay more than double the wholesale price for each NBC TV episode. We’re not sure what the “wholsesale” price of a TV show is, but Apple says the proposed cost increase would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
“We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”
Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.
Doesn’t look like anyone care. Apple’s stock undamaged, which is good. I understand that some people buy shows this way, but to me, DVD is still the way to go, or just friggin’ buy a Tivo. Much more versatile, and better value long-term.
yeah I dont think this is going to slow anything down with Apple. Just announced they took market share from google :/
I am actually a big fan of ordering through itunes, and the office, heroes and abc’s lost were the shows I watched through there. It is a nice service, and now I will just be pirating them instead of paying for em.
NBC has a history of being stupid. This is just another example! Good for Apple in sticking to their price! I guess NBC thinks they are BP or one of the other oil companies … stick it to the consumer! Sorry, cable has more to offer anyway!
Mark
You gotta wonder who’s doing the math at nbc. Their tv shows on dvd sell for what? 50 bucks MAX? And for that you get 22 episodes, and then at least another hour of “extra features”. So even if we narrow it down that way, you’re only paying $2.30 per episode(ignoring the extra features)? Which has less copyright protection and is of much higher quality? Now.. 50 bucks is… worst case scenario high. Some retailers sell for less. Hell target most of the time after a few months, sells them for 20 bucks! Maybe, I’m missing something here, but someone is missing a few bolts upstairs.
NBC must really be crawing in bed with Microsoft. Very odd bed fellows.
I’m assuming this will also affect content from SciFi and USA, as they are both subsidiaries of NBC. The only shows I buy on iTunes happen to be those from NBC.
Personally, I TiVo most of my shows anyway, but once in a while we get a thunderstorm and a night without power. When this happens I go to iTunes and buy a misc episode for $1.99.
I figure if a movie is $7.00 for 2 hours, that equates to roughly 17 minutes per $1.00 spent. Since most TV shows are between 23 – 45 minutes (30 – 60 minutes minus commercials.) this means I should pay $1.35 to $2.64 for a show so I’m OK with $1.99 per episode.
I also figure that the costs of a TV show are subsidized by commercials which should help lower the cost per minute when compared to a movie in a theater. This is why I refuse to fork out $99 for a season of Star Trek on DVD. I figure if I can get a movie which was made solely based on a projected earnings report for $14.99 then why pay more for a TV show which was made based on advertiser revenue.
NBC: F__ you!
Apple: No, F___ you!
I’m a big fan of iTunes, but I do believe that media companies should have the right to set their own wholesale prices–whether it’s TV shows, movies or music–which Apple can then mark up as they see fit to ensure profitability. If NBC is dense enough to try pricing their content at $4.99 an episode, let them watch sales drop precipitously and then adjust pricing until they find a sweet spot the market can support.
Apple’s policy of one-price-for-all is great for marketing simplicity, but in every other form of retail the laws of economics are allowed to influence where the price ultimately lands.
The truth is, neither Apple nor NBC were likely making much revenue off of these TV sales–maybe a couple of million dollars over the course of a season, which is less than a network makes in a single commercial break on the air. But it was a great hedge toward the future, as more and more people are looking for alternative methods of content delivery.
In the end, the ones hurt the most by this move are the consumers.
I could have sworn NBC was already in bed with Micro$oft… M$NBC rings a bell!
Use Me. Literally.
I know! Let’s stop making decent-quality QuickTime movies of our shows, and make people watch it in a 320×240 browser window, with pop-up and interstitial advertising! While we’re at it, make it Internet Explorer only, so only Winders users can watch!
/morons
Hey NBC… it’s called bittorrent.
You see, last year I bought a few episodes of the office, b/c they didn’t Tivo, and I didn’t want to go through the hassle of downloading from “alternative” sources. 2 bucks was an acceptable price.
5 bucks? How’s this: just for having the arrogance and/or stupidity to think that I would pay that much PER EPISODE, here’s a guarantee: you’ll never ever see another dime from me, on iTunes or any other store. I’ll get the shows in other ways. You had a choice: make a little money, or none at all. Too bad you chose the latter.
Quite a few of you don’t understand what is going on in the world. 90% of the people that would buy an episode don’t know what bit torrent is. Period. Those people will be upset by the price increase, but most (not all) of them will buy the $5 episode so they can get what they want right then. So they will probably make more than they did with iTunes.
The people that would steal these episodes using p2p aren’t that big of a market to worry about and NBC can sue these people for way more than they have lost so it is a big win for NBC.
NBC got badly outplayed by Apple on this one. They wanted to use the threat of not renewing their contract to force Apple to bend on their iTunes pricing. Too bad, so sad, but Apple cut that plan off at the knees. Now Universal’s stuck: their competing download service won’t be online for months, and now they’ve lost the promo power of iTunes’ front page, just as their fall season is about to begin. That’s gotta hurt. Of course, this situation doesn’t help Apple at all either, but they end up looking like the good guys who are fighting for low consumer prices, while the stink is definitely on NBC for gouging.
Sorry but you guys are all incredibly naive.
NBC wins here. They have been selling on itunes for a long time. Obviously the numbers aren’t interesting enough for them to pursue the contract without increasing prices.
Word is that only 1% of Ipod Video users use it for video purposes. Im sure the numbers Apple is delivering are quite pitiful. Trust me, if Apple was delivering huge numbers, NBC wouldnt pull the plug.
Its pretty simple. I cant for the life of me understand why anybody questions the move. Apple sucks for NBC distribution, so NBC is happy to end the deal.
Feeling shafted by NBC’s proposed $4.99 an episode price hike that got their new fall season kicked out of iTunes?
Kevin Wick has been kind enough to look up the contact information for the NBC Executives that are key to getting this situation reversed.
Amy Zelvin, NBC Universal Digital Media Communications, (212) 664-7436 amy.zelvin@nbcuni.com
Joe Libonati, NBC Universal Television Group Publicity, (818) 840-3050 joe.libonati@nbcuni.com
(edit) Some additions-
Jeff Zucker, President and Chief Executive Officer, NBC Universal (212) 664-4444 jeff.zucker@nbcuni.com
Ben Silverman, Co-Chairman, NBC Entertainment and NBC Universal Television Studio ben.silverman@nbcuni.com
Now, please don’t call these people and threaten them, cuss them, or yell at them. That’s not going to get anything accomplished.
If, however, you want to politely let them know how you feel about their suggested price increase, and subsequent removal from iTunes, it might actually have some affect.
If enough people call, NBC just might listen…you never know.
This is all about control of market not so much profit or money. NBC just as Universal music doesn’t want to be dependent on apple as the only option in digital delivery. So they are trying to dictate the terms to get the upper hand. This does not have to do with money really. I think NBC wanted to price downloads on itunes so high that they could go out and start something else on the side to replace it or they would drive people to dvd sales (Or on really long shot if people bought them they would make more money).This is a powerplay big time.
Whatever, You can get it all free using this great little App called TV Shows. You can find it on Versiontracker.
In the age of the Internet, NBC forgets that they are just a content provider. They should be distributing their content to as many people as possible with at the lowest price possible so that it doesn’t hamper the viral marketing if your content is worth its bandwidth. The point is, you want the most mindshare, so you have leverage to negotiate ad rates with advertisers.
To the consumer, $2 is negligible for the convenience of not having to do the video conversion to put it on your iPod. When you start charging $5, it no longer becomes a compulsive buy, and you have affectively killed your primary business model. To disseminate your content to the most people possible, and ultimately you will lose viewership and subsequently, ad revenue.
If the broadcast networks realized how stupid they are in their mindset of “PIRACY” of Intellectual Property instead of realizing the Internet is the world’s most affective free marketing machine humanity has ever known, they might actually start posting all their content for free on Youtube et. al., and let people embed links, talk about it on their blogs, etc to get the most mindshare possible.
It takes a real idiot to think that you get more revenue by more than doubling the price and put in an extra $3 in your pocket without realizing you affectively killed the distribution of the content.
Maxxed,
We may or may not be being Naive here. I got hooked on Psych because it was offered as a free download on iTunes. I highly doubt that 1% figure. Out of the 5 people I know that have video iPods, 4 use video.
NBC loses here, they will get extremely bad press and accusations of price gauging right before the new TV series starts. Even people who don’t use iPods will hear tales of corporate greed, and a few may decline to watch the new shows on principle or enough people will bicker and advertisers will start to pull away.
iTunes gets MILLIONS of visitors every day. I don’t see how you can say that Apple sucks for distribution. There’s no cost associated for NBC once the shows are ripped to digital and hosted on APPLE’s servers. When you watch the free episodes on NBC.com NBC has to pay for bandwidth charges. When you download from Apple you pay $1.99 with Apple footing the bill for bandwidth and a portion going to NBC.
I could see NBC’s point of view if there was a direct correlation between loss of DVD box sets and iTunes, but I have yet to see a single study on that.
Tim,
Good idea, but watch a few hours TV, find out which advertisements you see the most during that time frame, and write to them expressing disinterest in NBC. If the advertising money falls NBC will be begging to come back.
well I guess it is about time to fire up bittorrent again. This whole thing is ridiculous, i was perfectly fine with paying since i had the ease of itunes.
Move on, Linux Mythtv and record free
> I figure if a movie is $7.00 for 2 hours, that equates to
> roughly 17 minutes per $1.00 spent. Since most TV
> shows are between 23 – 45 minutes (30 – 60 minutes
> minus commercials.) this means I should pay $1.35
> to $2.64 for a show so I’m OK with $1.99 per episode.
This is the most asinine, idiotic and ridiculous thing I have ever heard.
Gary,
NBC will just cancel the show if advertisers pull out. Many of their shows are on thin ice already. If you hadn’t noticed they’re already ranked last and people watching their shows on iTunes really doesn’t help. “Were dead last in ratings but fans watch on iTunes instead of TV” doesn’t sound like much of a selling point when approaching advertisers. Most probably, the new NBC web delivery will incorporate advertising to an extent that Apple won’t allow.
if consumers == pissed then NBC == pwned. Idiots, digital technology is changing so society, as stated earlier you had a chance to make a little money now I pray that you bastards are victimized by piracy.
I’m in the US military stationed overseas. Downloading Heroes and The Office from iTunes, was the only way that the thousands of deployed service members actually watched the show, as the Armed Forces Network plays the season nearly a year after it originally airs. This is really unfortunate, but I will definitely turn to piracy to get these shows now. Thanks for nothing, NBC.