“NBC Universal topper Jeff Zucker warned Monday that new digital business models are turning media revenues ‘from dollars into pennies’ and revealed that NBC U booked just $15 million in revenue during the last year of its deal with Apple’s iTunes,” Michael Learmonth reports for Variety.
MacDailyNews Take: In January 2006, NBC stated that Apple’s iTunes Store and iPod powered broadcast ratings for “The Office.” How much is that worth?
Learmonth continues, “Interviewed by the New Yorker’s Ken Auletta at a benefit for Syracuse U.’s Newhouse School, Zucker described the impasse that led to NBC U’s decision not to renew its current iTunes deal, which expires in December. NBC U wanted to explore higher pricing for hit shows such as ‘Heroes’ by raising the price from Apple’s standard $1.99 to $2.99 on an experimental basis. ‘We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,’ he said. ‘We made that offer for months and they said no.'”
Learmonth reports, “In lieu of more flexibility on pricing, NBC U sought a cut of Apple’s hardware sales. ‘Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money,’ Zucker said. ‘They did not want to share in what they were making off the hardware or allow us to adjust pricing.'”
Full article here.
[Thanks to MacDailyNews Reader “Adam W.” for the heads up.]
We’re all for people getting fair compensation for their work, but not for work they didn’t do. Apple should never capitulate to forking over iPod royalties to greedy suits like Zucker whose hunger for money exceeds the bounds of propriety. Until Microsoft crossed the line with their derivative Zune failure, either in desperation or underhandedness, no device maker paid such royalties. AM/FM/Satellite radio makers do not pay content providers a royalty on each radio sold. TV makers do not pay content providers a royalty on each TV sold. Phonograph makers did not pay royalties to the labels on record players. Audio speaker makers pay no royalties to labels, either. The list goes on and on. Why should NBC Universal get a percentage of an iPod sale when NBC Universal content may never even be played on that iPod? Is NBC seeking a cut of revenue from TV makers such as Samsung, Sony, Sharp, Panasonic, etc.? Content providers that seek royalty payments on hardware devices are illogical, greedy, and severely out-of-touch. It’s no wonder Jobs told Zucker to go pound sand.
So, this is totally off-topic, but, you know, there’s this cool website Torrents.to. It searches major torrent sites for stuff. You just type in a search term, say, oh, we don’t know, “heroes” or “office” or any other random word, pick a torrent site to search and it returns results along with handy tabs across the top, so you can quickly conduct the same search on any major torrent site. It’s really pretty cool and works rather well. If you Google for “Mac BitTorrent Client,” a ton of results are returned, too.
Do they ask TV manufacturers for a cut of THEIR sales?
Perhaps the question should be how can NBC make so much money on the backs of the creative people that create the content for their shows.
The thought plickens.
MW: reaction
We don’t mind, any programme to screw you over with
“Totally off topic . . .”
MDN you are the best !!!!!!!!!
Since the geniuses at NBC at dumbed-down The Office in its fourth season — they might as well put a fake laugh track on it — the same geniuses at NBC have probably asked for that —
there’s nothing really worth watching on NBC anymore.
Buh-buh, NBC……………..
Perhaps if NBC U put out a quality product then they would earn a decent income. Perhaps they should make their own digital music/video play. They could call if the Nune.
Whilst NBCU’s Zucker is a greedy asshøle, tacitly encouraging your readers to steal content is not a good thing. Getting something for nothing as being bad – as you point out in reference to Zucker and NBC was a correct comment. It is also bad for individuals to do the same.
Your ‘off-topic’ comment about torrents should be removed.
Wow. So Ex-Lax should get a cut of Charmin’s action?….
MW:too
Do cell phone manufacturers ask service providers for a cut of their income? Of course not! Oh wait, Apple does.
If there was “only” $15 mio revenue, i.e. not enough sales, then, perhaps, raising the price is not the smartest move?
These suits don’t get it. They’re competing against a zero-cost competitor, a.k.a. BitTorrent. 15 Mio, at no distribution costs, sounds like a sweet deal compared with what they have now, which is zero, nada, zip, rien, nichts.
Screw NBC. As MDN said iTunes raised it’s ratings. They’re getting paid for the shows. Music didn’t sell well in the beginning either. I question the market size for people buying TV shows anyway. That said it’s still good exposure for NBC to keep it’s content on the ipod even if they have another way to get it of their own. They sound jealous and completely out of it.
First thing; that rant about encouraging pirating should go. As much as I agree that NBC ought to be punished, this kind of advice is a bit over the line, on principle.
As for NBC and its shows, while many of us may decide not to watch (or worse, steal and watch), it will be inconsequential for NBC. We are such a small group, it’s totally below the radar. Besides, boycott as a means of delivering a message never actually worked in the US. European nations are much better and more disciplined about that, and it shows. When they mobilise themselves to boycott a company, that company hurts seriously. Here (in the US), it never works, since Americans value their personal convenience way above anything else. No boycott was ever successfully attempted on any larger scale in the US (anyone remember mass e-mails boycotting Exxon-Mobile to drive the gas prices down?).
The point is, NBC will in the end be the victim of its own undoing. That Hula thing will be marginally successful, but mostly irrelevant. ITunes will continue to rake in cash (with or without NBC U). While $15 Million was perhaps change between sofa cushions for NBC U, it was totally free change. No effort on their part was required for this money to come in.
NBC will return to iTunes. They have no other choice, as all other choices will ultimately be unsuccessful. And it won’t matter if we watch NBC, download torrents of it, or boycott it altogether.
It takes broadcast gear to drive the transmission and cable systems. Does Zucker want a cut of that?
It takes wire to move the signal from device to device. Does Zucker want a cut of that?
It takes electricity to any of this. Does Zucker want a cut of that?
When Best Buy sells their season DVDs, they have to buy display furniture and have them trucked in. Does Zucker want a cut from the particle board, gasoline, and truck business?
Let’s get simple here – his organization buys and distributes entertainment product. His organization is fat and sloppy. The products he must buy and subsequently sell are becoming less and less compelling. His business is circling the bowl and he is making the sounds bites of someone not in control.
Goodbye Zuck.
after paying salaries, there was only 15 million left.
Just a thought here.
But aren’t those tv shows that NBC wants to “SELL” , FREE on regular tv??????
If I or a friend uses a VCR, I get to watch them anytime for FREE.
But Zucker is mad that he can not RAISE the price for a FREE show ???
I miss the point where Zucker makes any sense except the business sense for getting more money for screwing the artists even more and of course, raising his bonus.
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weird, just weird.
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MDN = parts as in Parts of Zucker just do not work.
The only NBC show i watch is the Office, and even that is starting to get a little old. I have a feeling Zucker won’t be at NBC Universal too much longer unless NBC can get out of its funk of horrible TV shows.
Leopard hits on EVERY one!
Getting mine now.
At $2.99 an episode, a 24-episode season of “The Office” would cost $71.76 — and that’s without any extra features. DVD box set prices (though at first seemingly high in the $35 – $50 range) are nowhere near that mark.
What is NBC thinking?!
That’s $15 million additional dollars that weren’t there before… in the first year, only US (not available yet elsewhere… lots to be made worldwide)…he makes no sense at all.
I think it is a bit silly to people to rant about NBC’s decision on this. They don’t owe Apple anything, and if they want to charge more for their product it’s their decision. The market will judge weather they are right or wrong in how they’ve valued their product. Either customers will buy it or they wont.
Apple also can make the decision on what they will carry on iTunes, just as a retailer can decide what to put on the shelf.
I’ve said it before, but it really is amazing how the entire entertainment industry has lost it’s way by focusing on distribution channels and how they will sell product instead of being more concerned about the quality of the product they are delivering
Usually, if you give customers a good quality product, getting paid a fair price for it takes care of itself.
Just look to Apple as an example.
Not that I agree with NBC wanting a cut of iPod revenue.
But how is this different from Apple wanting a cut of AT&T;’s network revenue?
“But how is this different from Apple wanting a cut of AT&T;’s network revenue?”
It’s a business agreement that AT&T;agreed to in order to get exclusivity concessions from Apple on the iPhone. If Apple had asked for it, AT&T;certainly had the right to say no, which they didn’t.
What Zucker is implying is that his company has an inherent right to profits from iPod sales.
I always like how they state what they netted. i.e. $15 million translates probably into over $900 million grossed. It’s sounds to me that someone at NBC U should take a serious look at their financials and find out who’s being grossly overpaid.. <ahem>Zucker</ahem>
@Macromancer,
Hmm. I understand that the AT&T;thing was a business deal, but so would the NBC thing if Apple agreed to it..
Apple feels (or felt) that they had an inherit right to take a cut of AT&T;’s revenue. It’s really the same thing that NBC feels, although AT&T;agreed to Apple’s demands, and Apple won’t (and shouldn’t) agree to NBC’s demands.
I think the logic here is being twisted a bit because the NBC request is not in Apple’s favor.
Just my 2 cents.
The networks are not content creators. They are syndicators — middle men. In the end, SJ can offer the real producers of content, the actual production companies, to put their un-fscked up content on iTunes and cut out the MiddleZuckers of the TV networks — with no ads and the bulk of the payments going to the content creators.
From SJ to Jeffy, “SIOOMA.”