“Apple! NBC! At war! Sounds like heady stuff: Apple and NBC Universal brawling in the press over an iTunes’ contract to sell downloads of NBC TV shows,” Louis Hau writes for Forbes.
“But we’re having a hard time getting excited about this particular battle. In the end, it probably won’t make much difference in the media industry’s embryonic efforts to make money from online video, which are shifting to advertising-supported streaming video. In fact, the dispute may not even affect the long-term availability of NBC’s content on iTunes,” Hau writes.
“While TV networks have a vested interest in remaining on iTunes, the online store will likely end up being less important to them over time,” Hau writes. “Rather than focusing on selling downloads of their programming, the strategy being pursued by NBC, News Corp.’s Fox, CBS , Disney’s ABC and Viacom’s MTV and Comedy Central is increasingly emphasizing the sale of advertising to keep their content free.”
“No doubt Apple sees the writing on the wall, which is why we can probably expect the company to come up with new ways of getting iPod owners the content they want. One possibility: Apple has reportedly been in talks with film studios about starting a movie-rental service on iTunes,” Hau writes.
Full article here.
Meanwhile NBC will be fretting and wringing their hands trying to figure out how to make up the money they’re going to lose in this Fall season. They’ve got another think coming if they think the News Corps deal is their salvation.
Weird analysis. If anything, iTunes surprised and showed that people were willing to pay to have advertising free television content.
This is ridiculous: what iTunes (and bittorrernt) has done is to show people that they can watch a 42 minute program in one shot rather than having to sit through 18 minutes of commercials! I, for one, will never go back to watching TV with commercials again. If NBC et al think we’ll go back to the dark ages of ad-supported TV, they are the ones who have another thing coming.
“Rather than focusing on selling downloads of their programming, the strategy being pursued by NBC, News Corp.’s Fox, CBS , Disney’s ABC and Viacom’s MTV and Comedy Central is increasingly emphasizing the sale of advertising to keep their content free.”
This is the biggest pile of BS that I have ever heard.
The fact is advertising is down because competition is drying up, and the reason for that is the population is increasing and more direct efforts, like paying supermarkets to gain shelf space (Walmart), is much more effective and pernament.
Put it in front of the customer as the only choice and they are forced to buy.
Content providers have diversed into selling TV shows as a way to offset the monopoloy of cable companies.
This NBC “price hike” was just a cover ploy. Because they know Apple has to charge one price for the same type of content because PRICE SENDS A SIGNAL.
Why is it that at movie theaters all the movies, good. bad and horrible are all priced the same? Why is it that the new haircutter at a barber shop gets the same price as a experienced one?
Because if their price reflected their experience the customers would line up behind the more expererienced haircutter as to avoid a possible bad cut.
Same thing with movies, price sends a signal that the quality is bad. Who wants to see a crappie movie with their new girlfriend?
Apple has to charge one price for each content type as not to cause chaos from: price wars, which will shut out the less wealthy studios; conspiracies to set prices higher and basically kill the iPod/iTV sales; and other manipulative tactics.
All the other contents providers have agreed to the one price, knowing exactly this information. Sure they all can agree AT ONE TIME, to increase the prices.
So why does NBC want to raise prices? Control.
With price as a signal they can manipulate you as the customer to buy cappie movies and reward studios who give them a bigger cut of the pie. They can also punish studios that want too much by lowering their prices on iTMS.
Apple is catering to the richer crowd which can afford to download content to avoid advertising.
The great experiment has been if this method can superceed advertising/free method, but appartantly it hasn’t. ABC moved their content to the web paid for by advertising. ABC is owned by Disney which Steve Jobs is the major sharholder.
So NBC is off to do it themselves too, although they would have been better off keeping a foot in iTunes.
I suspect they didn’t want to upset the cable companies, so they needed to keep their prices uniform.
So many buisness models, so much competition. No wonder the customer just plops in a chair nightly, turns his mind off and watches the idiot box as it slowly destroys his ability to think.
The old guard network execs are still the butt puppets of major advertisers.
Now what begs the question.
What if Apple allowed a iTunes streaming option to watch free TV content in exchange for advertising?
Sure Apple has to charge for bandwidth, so lets say monthly subscription to offset that?
Of course the cable companies would be livid and demand a cut of that for using their cable lines.
I’m just wondering if Apple blew a big opportunity here.
I don’t think it’s sorted out either way yet. A very small portion of people buy their tv on iTunes. It’s successful, but it’s not exactly huge when compared to the established advertising-based model.
If anything, iTunes (and Steve) need to remain flexible and adapt when necessary, be strong and plow others over when necessary, and stay sharp. Easy enough.
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MW “serious” as in “I’m super cereal.”
Apple hasn’t been doing a lot of listening lately.
It seems like Steve is pushing to extract anything and everything he can, like he has a defeatist additude.
Why cheap looking glossy screens? To push people into the more expensive machines?
Why not listen to the needs of the Networks and offer a advertising based option in iTunes? Why make everyone PAY only?
Why not own the online market completely?
Look at Google, immensly rich from advertsiing.
I quit watching television forty years ago because it was crap. Hasn’t seemed to have changed much since then, either. Nice to see Apple isn’t constipated. heh.
btw, MDN .. we ordered one of those 2.8 GHz iMacs. It’ll get here in two or three weeks. We also got a free printer, a free nano, an iWork ’08 family pack and a copy of Parallels to go with it.
And no .. I still can’t get an account at the iTunes Store with the same credit card that the iMac is on, regardless. Me? I think Apple oughta just tell the whole damn entertainment industry to shove their contracts up their ass and sell all available media to everybody, worldwide. Not that I’d purchase any TV shows, mind you. It would just feel good to see Apple do it. ahahaha.
Don’t forget advertising isn’t just about products, it’s about politics, ideas, you are required to watch advertising so that ideas can be implanted in to your mind. Those 15 – 18 minutes per hour taken up by advertising are useless to you in small chunks but together you can put those minutes together to do something, something else, something useful, when you should be watching the propaganda.
Advertising is clearly a time waster, you only purchase a fraction of the products that you see advertised, most adverts are just taking your time away. The most advertised products are junk, that is how they can afford to spend so much on advertising, the resources don’t go in to the product.
There was a time a few decades ago when people were quite contented with their monetary wealth, they opted to work less hard, have fun, seek enlightenment, enjoy music and art, try to make the world a better place by demanding fairer employment terms and fewer wars. Now people work longer hours, unpaid overtime has become the norm, they have less time to make up their own minds and so opt for what is promoted most vehemently. Advertising has played a pivotal role in degrading the life experience for most ordinary people.
Most people have heard of Sigmund Freud and his research in to how the mind works, few people have heard of his nephew, Edward Bernays, who took that knowledge and transformed it in to a tool for mass manipulation.
http://en.wikipedia.org/wiki/Edward_Bernays
If you’re so phuquen smart why aren’t you doing something important with your life?
There is a market for ad free TV show sales.
The sale of missed episodes can make or break a new offering on network TV. NBC is just trying to make their upcoming ad infested service more palatable. If it doesn’t work on an iPod it won’t be successful. NBC will learn the hard way, just like everyone else.
Just another FORBES hack job on Apple, move on.
BTW anyone else buying puts on RIMM &MSFT; ?
@No Matte? No Sale!
What a TROLL, I saw the new iMac for the first time just the other day. IT IS GORGEOUS! I want one, and the gloss screen DOES NOT LOOK CHEAP, you frigtard.
Actually, this is what I have been expecting for years.
Cable and FIOS will become another utility, offering the infrastructure.
The content will be on the internet. Streaming.
Eventually, you will watch the shows from the production studio web-pages.
There will be no need for the networks, except the specialty channels.
I think this signals more to the end of over-the-air dominence rather than iTunes.
Gandalf:
Although your commentary was a little muddled – I couldn’t agree more with the main point of your post.
Even France, under its new president is trying to reverse the 60 year-long, hard-won principle of more leisure time and less work time. The time to enjoy family, art, music and literature. To relax. Paradoxically, this made the French worker more productive – per man-hour – than a number of its neighbors and much more productive than American workers [and that gap is widening]. The proof seems to be, a happy worker is a productive worker, n’est pas?
Degrading the life experience will kill us all. I’m often reminded of that old advertising campaign from Europe: It basically ran… ‘No-one said on their deathbed, “I wish I’d spent more time at the office”.’
Pretty stupid analysis. It only looks at the content providers’ point of view. Guess what? It’s the consumers who ultimately decide. It’s been proven that consumers have had enough of advertising and we are willing to pay a small amount of money to watch a TV episode anytime and anywhere we want. Ad-supported streaming? Can we watch a stream when we are not near a broadband connection? If as a tech “journalist,” Hau can’t get excited at the battle that will determine the outcome of the next way to consume content and as a consumer, Hau will remain passive when being screwed by the content provider, Hau should get out of business of writing for the public.
I want to own my content. I don’t want ads. I want to pay to watch when ever I want, where ever I want, and not have to “rent” content from a store. If I want movie rentals, I’ll go to Blockbuster or Netflix. I want my content from iTunes.
@No Matte. No Sale
Print advertising, such as magazines or what Google trades in, is totally different from ads in television. Print ads are non-intrusive: they sit there waiting for you to take notice. You can choose to ignore them or read only them if you like. Ads in television and radio are interruption based. They take you out of the story or out of the topic through which you are being entertained. Advertising in free, over the air, TV shows is a necessary evil to foot the bill. But advertising in content that I am taking the time and covering the cost of the hardware/software overhead to search out, download, provide storage for? No way is advertising interruptions acceptable.
I know, I know, don’t feed the trolls…
If you’re so phuquen smart why aren’t you doing something important with your life?
I am.
I saw the new iMac for the first time just the other day. IT IS GORGEOUS! I want one, and the gloss screen DOES NOT LOOK CHEAP…
Good for you. Get one.
Use it in a sunny room with windows all around and call me in a few years when you have rubbed your eyeballs deep in your head from the eyestrain caused by the reflections in the glossy screen.
Then I can have a good laugh at your ignorant ass.
WiFi and Safari enabled iPods will obviate the necessity for iTunes anyway. iPod owners will be able to get their NBC shoes from Hulu.com. Apple doesn’t care where people get their content – they get their money from iPod sales, not iTunes. Let someone else host the media; it’s one less thing for Apple to worry about.
Sorry for the typo – it’s “shows”, not “shoes.”
Print advertising, such as magazines or what Google trades in, is totally different from ads in television. Print ads are non-intrusive: they sit there waiting for you to take notice. You can choose to ignore them or read only them if you like. Ads in television and radio are interruption based. They take you out of the story or out of the topic through which you are being entertained. Advertising in free, over the air, TV shows is a necessary evil to foot the bill. But advertising in content that I am taking the time and covering the cost of the hardware/software overhead to search out, download, provide storage for? No way is advertising interruptions acceptable.
I see your point, but if the industry is moving back from the experiment in paid downloads to a ad revenue based system, Apple should have provided the option in iTMS as to continue selling iPods/iTVS.
For instance Apple provides free podcasts and internet radio stations on iTunes, there are advertising in these mediums and they do interrupt the listening experience.
Apple already compromised it’s high standards by offering Windows losers iTMS and Safari. So what’s the diff if they offer a advertising based alternative to the TV shows on iTMS?
The reason ABC and NBC is doing their own site is because Apple doesn’t listen to the networks needs for a ad based content delivery system.
Apple could have listened, and owned the space with their hardware devices.
It wouldn’t cheapen the experience, it would be the USERS CHOICE to cheapen their experience with ad based content.
Steve Jobs thinks everyone can afford the high prices for all his gear, but the networks have to cater to everyone’s economic status.
After all most folks making $10 a hour buys virtually the same products as the guy who makes $50 a hour to a certain extent of course.
I think SJ didn’t want TV shows on iTMS to fail and made a bad call.
iPod owners will be able to get their NBC shoes from Hulu.com. Apple doesn’t care where people get their content – they get their money from iPod sales, not iTunes. Let someone else host the media; it’s one less thing for Apple to worry about.
Uh there is a little DRM problem of course as Apple devices won’t use Microsoft based DRM. NBC reportly asked Apple for more stringent DRM along with higher prices for TV shows.
Microsoft’s hand is in this for sure. Because they have promised very stringent DRM before. Never delivered of course.
@John – Well said.
I understand that a simple pricing structure is best but the only change I would make to the pricing model is to charge less for “1/2” hour shows. I regularly purchase a “1 hour” show (42 minutes) for the iTunes rate of $2 but I can’t bring myself to purchase the 21 minute show for $2.
That means I did not purchase the episodes of 30 Rock from NBC this past year, though I did buy a few Heroes.
Regarding movies: Rent or Purchase @ 720p (for now), please.
@No Matte –
You have a host of horrible conceptual errors about the marketplace in general, and about the current rift between Apple and NBC in specific, not the least of which is:
“Apple has to charge one price for each content type as not to cause chaos from: price wars, which will shut out the less wealthy studios”
Apple is not protecting some fantasy group of impoverished studios – they are protecting iTunes sales, since one-price sales are more attractive to the customer. Apple is a business.
You seem to have constructed a little class struggle scenario here (as I’ll bet you do quite a lot), albeit with a third-graders understanding of the marketplace. Truth is, both Apple and NBC have legitimate concerns here – hence the impasse. The only real item of interest here is how much power Apple has here to leverage.