“‘Apple has destroyed the music business,’ said Jeff Zucker, [President and Chief Executive Officer of NBC Universal], today at an event organized by the Newhouse School of Public Communications. ‘If we don’t take control on the video side, they’ll do the same’ to video,” David Schatsky blogs for Jupiter Research.
“Zucker made the comment in response to a question by moderator Ken Auletta of the New Yorker. (Auletta did a fabulous job of volleying one penetrating question after another at Zucker),” Schatsky reports.
“Zucker put in context the highly publicized conflict between NBC Universal and Apple over pricing on the iTunes TV show store. NBC sought to introduce flexible pricing; Apple refused,” Schatsky reports.
Full article here.
The Financial Times also has a report on Zucker’s comments, “‘We know that Apple has destroyed the music business – in terms of pricing – and if we don’t take control, they’ll do the same thing on the video side,’ Mr Zucker said at a breakfast hosted by Syracuse’s Newhouse School of Communications.”
“As part of NBC’s push for more flexible online pricing, Mr Zucker said he urged Apple for months to price one programme at $2.99 per download – as opposed to the current $1.99 – as an ‘experiment’ but was rebuffed by Steve Jobs, Apple’s chief executive.”
Full article here.
If by “destroyed,” Zucker means “saved,” then he’s completely correct.
Note to NBC-Universal:
You were offered the chance, however indirectly, to have variable pricing on music when Apple introduced iTunes Plus music at $1.29 per track. If you’d played along, a premium price tier could have been established, and you could have made more money. But no, you dolts pitched a fit about DRM issues. Then just to spite yourselves, you later released your music DRM free for less money than you could have got through Apple. Now everyone expects DRM free for 99¢ or less. Like I said — dolts!
“Henry Ford has destroyed the buggy whip business”
Apple has merely been selling DRM music as enforced by the music industry.
CDs are still selling along side iTunes.
The other on-line music stores (selling DRM-FREE) songs to WINDOWS only platform are SHARING the songs as YOU can not do so under Apples DRM system. The music is fairly well protected to YOUR 1) MAC / iTunes, 2) Your iPod, 3) a DRM BACK-UP or your Purchases.
IT’s MUSIC but for the digital life… it is not killing music or the industry.
Jeff Zucker must be intelligent enough to see this.
And if NBC was holding it’s ground by MAKING the most sales then any other partner to iTunes… then it is only this…
THEY WISH TO CONTROL the profits for themselves.
So – NBC has decided to COMPETE with APPLE.
Apple is THEREFORE creating competiton not by wish but by others greed… and this is fair business.
SULK some more Zucker!!!!
Wahhhhhhhhh!!!!!
And another thing…
Why would I pay $2.99 for an episode of, let’s say, The Office? Even at $1.99 per episode, with 20 or more episodes per season, I would have paid more for the downloaded season than the eventual DVD release. Not to mention the download version of any show is currently at a lower level of video quality, arrives on my computer without any expensive physical packaging, and is missing the normal promotional materials contained in a DVD release. Go figure.
NBC should end.
They are the dinosaur. Go back into bed with Microsoft and wither away and die, NBC.
Apples open-source H.264 encoding of the tv shows are very close to MPEG 2 DVD quality encoding.
The compression is slightly inferior… you are right
however, like a mp3 encoding compaired to the original AIFF CD file there is such small quality changes that it is not totally noticeable to everyone. THE encoding is required inorder to travel with less bandwidth. These Apple tv files are not iPOD mini thumbnail files.
That said, I do agree with you. I rather wait 4 the Box set to come out and buy it. And also like to see it drop in price – say at WallyMart and save even more pennies.
Finally…
I recently heard John Dvorak speculating on the amount of revenue a network can expect to make from advertisers on a per viewer basis. He put the figure at somewhere around 25¢ per viewer per broadcast show. I’m not sure how accurate that is, but his logic seemed sound. Now, given the $1.99 cost per download episode less the bandwidth costs and Apple’s (more than likely) meager cut, it seems to me the networks are making a lot more on a per viewer basis selling their content through iTunes than they do through over the air/satellite/cable broadcasting. Is NBC going to realize as much revenue via its Hulu venture? I doubt it. What complete dolts!
Apple recently dropped it’s pricing…
does this mean Apple is scared???
NO… they are in the driving seat at ready to compete.
Well now… I can’t speak for others, but iTunes has restored my passion for music.
I’ve bought more music in the last 3-4 years thru iT than in the previous 3 DECADES using traditional outlets.
Same with Amazon et al.
Let the video boys stuff themselves. What a bunch!!
You can’t see me live, but I’m making the same face that Tom used to make when Jerry lit matches under Spike’s paws.
Here’s the thing about Jeff Zucker: he’s a wannabe lawyer who failed to get into Harvard Law School and instead went into TV. In reality, he’s never actually “sold” anything to a consumer given that what he really does is assemble a mass audience and then “sells” that audience to advertisers.
Whilst he probably knows something about how to make programmes that appeal to a large demographic, that’s not the same as knowing how to produce a tangible product that “real” people pay “real” money to either put in their homes or on the technology that exists in those homes. His experience on how those people want to consume content in the digital age appears to be significantly skewed to the agenda of a group of vested interests and, even worse, it appears that his lack of understanding is considerably reinforced by a stunning degree of arrogance.
Here’s the pitch: We know you were happy paying $1.99 for an episode of our hit programmes, but we’re a little concerned that you’re not paying us for the dross we create.
Well, to tell the truth, we’ve decided that we’re not exploiting you – the viewer and consumer – enough – so we’re going to up the price for our hit shows, but – in order to make you feel that you’re not getting gipped – we’ll bundle it with some shows that you didn’t want to watch on TV.
Personally, I thought NBC Universal were wandering off the reservation when this whole dispute started. However – with this outburst – I’m beginning to wonder whether Zucker is suffering from some sort of post-traumatic stress or long-term after-effects from his brush with colon cancer.
To quote the IFPI report on digital music in 2006:
“Digital albums now account for six per cent of all album
sales in the US and grew faster than single tracks in 2006, although from a small base.
iTunes, the leader in online downloads, has sold over two billion tracks since its launch in April 2003 and more than one billion in 2006
alone. In November 2006 it expanded its operations in the US to include a mini-store dedicated to Latin music and entertainment including music, videos, television shows, audiobooks and podcasts.”
Now, I’m trying to reconcile those statements – written in a report commissioned and published by an industry body headed by a man who was a former President and COO of Universal Music – with Zucker’s comments and I’m having a problem.
And the problem doesn’t go away with further analysis: if iTS is destroying the industry, why are CD sales per capita of population highest in countries with a functioning iTS? Whilst Jeff is thinking his way through that, let’s consider some numbers…
In 2005, the music industry sold $20.795 billion of material, of which $19.755 was physical (95.0%); in 2006, the figures were $19.587 billion of material with $17.432 billion (89%) was physical.
To summarise, the music industry lost $2.322 billion in physical sales, but lost only $1.208 billion overall. In other words, the digital industry contributed $1.11 billion to the well-being of the music industry in 2006 which is hardly in accord with Mr. Zucker’s picture of an industry being pillaged and exploited by the onslaught of the digital barbarians.
For the half-year reported in September, the global record industry reported a net loss of sales of around $706.75 billion compared to the same period in 2006. And yet, digital has already contributed around $1.335 billion to net (trade) sales which is around 61% of what it contributed in the whole of 2006 and with the busy Holiday season still in front of us.
I think Jeff needs to go and look at the reality of numbers, but – on second thoughts – maybe that wouldn’t suit his position?
Macview…
You’re thinking of Jerry and David Zucker, who are a) considerably older and b) originate from a completely different part of the world.
It sounds like Jeff Zucker is haveing a hard time justifing his take home pay!
Maybe just maybe the middle man is no longer needed…and that would be a realy good thing!
Once it became clear that iTunes was the success it is, the music companies should have been making sure every other service was as good as iTunes. Unfortunately they tried to get behind numerous services that worked in their interests not those of the customer. Now they have iTunes virtually owning the music market and they’re exposed even more as being useless – instead of changing to suit the digital age they’re just trying to badmouth it. Sadly, I think things will get worse before they finally die.
Zucker has no grasp of reality in the real world of 2007. Online music sales are booming, if that’s destroying the music business, so be it. Better for the artists and the public anyways. Zucker and company only complain, complain, complain, no matter how much they sell and make in profits, it’s never enough. So if the music business is destroyed, let’s celebrate!!! The artists don’t need you Zucker or any of your kind as the internet can easily advertise for them without you and your kind taking 99.9% of there hard earned money away from them.
Didn’t Zucker sign the original contract with Apple? Torrent here I come.
Thank you Steve Jobs! Who is Zucker kidding??? Packaging television we don’t want to see so that we can see shows we want and then charge us more for it??? NBC can use any distributor they want, but I’ll be avoiding their shows. I hope it bites them in the rear…..
So, this loon also wants a cut of hardware sales from iPod revenue…. I’m curious, is he also getting a cut of HDTV sales from Sony, Samsung, etc? What an idiot….
The more artists that makes moves like Radiohead, Madonna, etc. that go straight to the customer, the sooner NBC Universal and their other oligopolists become irrelevant…
nothing quite as pathetic as the complaints of a crybaby capitalist
@The Power of One
I like the shiny screen on my MacBook.
I love iMovie ’08 and
I couldn’t care less if I buy an iPhone with a card or cash What’s the difference.
Stop whining.
I think Jobs has brought us way more good things than bad. Where would we be if it weren’t for Apple?
Command line heaven?
major media execs are like lawyers….they need complexity to keep their jobs. Apple’s system is too simple too perfect
…smart labels will get back to music and get rid of the suits who need confusion and complexity to keep their jobs.
What Apple has destroyed is the music MAFIA business.
It can be translated in many ways:
Apple has destroyed the music label business
Apple has destroyed the music executive business
Apple has destroyed the physical CD business
Apple has destroyed the music manager’s business
Call it however you want. But one thing I know for a fact: I am in a rock band and we’re recording our own music. By the time we decide to go out, we don’t need any label to dictate how to do it. We can do it ourselves.
How’s that for killing the music business? In fact, this is reviving the music business by giving it back to musicians and taking it off people who doesn’t know anything about music’s hands.
MW: “pressure”…. can you feel it, NBC?
Yes, I did help destroy the greedy little bastards!
Hey, do I have this wrong or am I just confused.
But, I thought TV was transmitted for FREE. Then I could video tape it for later viewing.????
Did tv go off the air or something???? Pay for TV. I must be confused here. LOL Going back to sleep and pulling the covers over my head.
en
In Zucker’s bizarro world, “destroyed” = “saved”.
Having Apple in control of pricing of media may seem unfortunate for their industry, but they are wrong. If they controlled pricing, piracy would have continued unabated. Without Apple’s influence, legal digital downloads would be be one-tenth of what it is today. And having a “hardware company” set the price for media (instead of the media-creating industry) is definitely good for consumers.
What a mother Zucker!