NBC wanted cut of Apple’s iPod hardware revenue

“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.


  1. 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……………..

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    weird, just weird.

    MDN = parts as in Parts of Zucker just do not work. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.