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NBCU’s Response: Never Asked To Double Price; Shows Will Be On iTunes Through Early December

By Staci D. Kramer - Fri 31 Aug 2007 04:15 PM PST

This is beginning to sound like a Jane Curtain-Dan Akroyd skit ... NBC Universal (NYSE: GE) never asked to double the wholesale price and insists NBC shows will be sold by the iTunes Store through early December. Firing back at Apple (NSDQ: AAPL) with a statement from Cory Shields, EVP-Communications, NBCU said the dispute centered on a “request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.” Shields said the company also wanted Apple to do more about piracy “since it is estimated that the typical iPod contains a significant amount of illegally downloaded material.”

NBCU contends that Apple’s pricing is more about hardware than content: “It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying.”

While Apple has said it will stop selling NBC shows next month, NBCU says that it not the case: ”We want consumers to know that all our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December. Our content is also available on NBC.com, Amazon.com, and the soon-to-launch hulu.com.”

He’s not saying how NBCU plans to make Apple follow through but he also left room for a resolution before the contract expires.

Update: For clarity, NBCU is referring to shows from its networks included in the existing contract; this does not cover shows premiering this fall —Bionic Woman, etc.

Posted in: Broadband, Companies, Apple, NBC Universal, Media, TV

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12 Responses:

From Joe Fri 31 Aug 2007 08:33 PM

NBCU doesn’t get it. They’re talking to us like we’re their customers. We’re not--I don’t make a transaction with them, I make it with iTunes. That’s whose customer I am. Don’t you dare act like you’re doing this for my benefit somehow! Right now you are trying to mess with the experience I’ve opted into with Apple, so you need to have a damn good reason to be mucking with it, up and beyond some lame relic of the big box stores like “bundled purchases”: Hey, here’s two crappy DVDs for the price of one, yippie!
Oh, and keep treating your viewers like thieves and that’s just what they might become. This nonsense about piracy, what, they want it to *only* support DRM? That somehow iPods are the root of the privacy problem since they support open formats and have big hard drives. Good riddance to these fourth-place losers, sounds like they deserve the backlash they’re about to get.
From Joel Fri 31 Aug 2007 10:41 PM

I agree NBC is being very stupid and short sighted. If I was one of the other Networks I would use this opportunity to provide more and better content on the device of choice for millions of millions of customers. In other news NBC wants you to watch thier content on a Zune, yeah, right, take a hike!
From Keith Sat 01 Sep 2007 02:08 AM

"flexibility in wholesale pricing” = price increase
From Mike Cane Sat 01 Sep 2007 10:41 AM

Words won’t work. They need to be entertained to get the message:

A Post-iTunes Fable For NBC
From Zion Sat 01 Sep 2007 03:22 PM

So most iPod owners are thiefs and pirates? or did I read the above incorrectly?

Now thats just rude.
From _yc_ Sat 01 Sep 2007 04:04 PM

It is very arrogant of NBC to say that Apple sales iPods “at the expense of those who create the content that make these devices worth buying.” Apple iPods have sold extremely well since their introduction well before any TV Shows were available on iTunes. iTunes was the first if not only successful legal download site for digital media that is acutally making money for the artist. NBC has some nerves and I hope they learn a lesson with their crappy hulu site. (The name hulu is actually obscene in over half a dozen languages; what a joke.) (http://www.techcrunch.com/2007/08/29/hulu-translates-to-cease-and-desist-in-swahili-oh-the-irony/)

The people running NBC are so stupid and greedy they actually pose a threat to any company who partners with them. I hope the issues don’t get resolved just so that Apple stays away from NBC unless the current idiots running NBC resign.

Apple can make up that 30% with other networks. I buy music, movies and TV shows from iTunes and have never bought any of the NBC shows. I think Apple will be better off without NBC.

Time will tell.
From Bob Sat 01 Sep 2007 05:59 PM

Apple likes simple pricing models but they have abandoned that requirement on the music side with differential album pricing and with DRM-free music.

I believe Apple should let the content providers (such as NBC) have some freedom in their pricing and let them (e.g., NBC) bear the consequences in the marketplace. Higher prices for NBC shows will lead to lower demand—perhaps such lower demand that total revenue to NBC actually drops.

The only catch is that the wholesale price should be the same across all vendors, i.e., ad-free shows should cost the same whether on Amazon or on iTunes.
From _yc_ Sun 02 Sep 2007 05:58 AM

Why would any media download store sell content for twice the price at which the very same content is selling for on DVD. This is insane!

I believe that NBC has ulterior motives in trying to ruin the iTunes buying experience to make their own site succeed. There is a gold rush going on since TV as we know it today is changing radically. See link…

http://seekingalpha.com/article/46004-google-s-vp-predicts-end-of-tv-as-we-know-it-hd-video-at-apple-special-event

Apple should treat NBC like all the other studios. If one show is more popular than another, it will simply sell more. NBC can choose to take the deal or leave it as they have chosen to do. We’ll see how well they do with their site and partners.

Fortunately Apple iTunes is not dependant on this 30% of TV Shows to succeed. With superb service, well integrated devices and great shows from many other studios and networks including Disney, History Channel, Discovery channel and many others Apple iTunes will do well.

NBC can go “Hulu” in Swahili after kissing iTunes’ “Hulu” in Indonesian and Malay.

Time will tell…
From john Sun 02 Sep 2007 09:51 AM

Holy cow, did NBC just call me a thief just because I own an ipod? That’s sooo messed up.
From Brady J. Frey Sun 02 Sep 2007 10:39 AM

Joe #1 hit the comment dead on for me. I’m tired of media outlines justifying their price hikes and need to return to the failed sales model gone past as ‘consumer choice’. Much less, taking the next attack shortly after and accusing those same consumers if piracy! Look, I’m a busy business owner, I love to catch up I great shows on my time; DVR’s usually have expensive or time based limits (looking right at you Comcast, my home tv is not the same as a hotel room rental), i dont want to rent, anyones who’s even tried a torrent will know it takes loads of time for something that could suck… but on iTunes i log on, pick, purchase, download and get what I want with quality and ease. Piracy dies not equate to quality or convenience, and people like me would rather pay. Quit trying to force the market into what you want when your base is screaming it doesn’t work that way anymore. How can you not be idiots?
From Abhishek Sun 02 Sep 2007 10:44 AM

This is a growing trend among media entities. I am sure more content producers will go this route. Apple does have a monopolistic position in the online media commerce.

Also this will allow alternative business models and may make content cheaper for us consumers.

Read more of my thoughts here:
http://abhishek.tiwari.com/2007/09/02/growing-ihate-for-itunes/
From mike Sun 02 Sep 2007 11:11 AM

Here’s the deal for me:

I am Apple’s customer, not NBC’s. I have purchased quite a few episodes of NBC content, but I won’t buy one single episode that isn’t available in iTunes. Instead, I’ll reward networks that are smart enough to know a good thing when they see it , and NBC can kiss my ass.

From Joe Fri 31 Aug 2007 08:33 PM: NBCU doesn’t get it. They’re talking to us like we’re their customers. We’re not--I don’t make a transaction with them, I make it with iTunes. That’s whose customer I am. Don’t you dare act like you’re doing this for my benefit somehow! Right now you are trying to mess with the experience I’ve opted into with Apple, so you need to have a damn good reason to be mucking with it, up and beyond some lame relic of the big box stores like “bundled purchases”: Hey, here’s two crappy DVDs for the price of one, yippie!
Oh, and keep treating your viewers like thieves and that’s just what they might become. This nonsense about piracy, what, they want it to *only* support DRM? That somehow iPods are the root of the privacy problem since they support open formats and have big hard drives. Good riddance to these fourth-place losers, sounds like they deserve the backlash they’re about to get.

From Joel Fri 31 Aug 2007 10:41 PM: I agree NBC is being very stupid and short sighted. If I was one of the other Networks I would use this opportunity to provide more and better content on the device of choice for millions of millions of customers. In other news NBC wants you to watch thier content on a Zune, yeah, right, take a hike!

From Keith Sat 01 Sep 2007 02:08 AM: "flexibility in wholesale pricing” = price increase

From Mike Cane Sat 01 Sep 2007 10:41 AM

Words won’t work. They need to be entertained to get the message:

A Post-iTunes Fable For NBC

From Zion Sat 01 Sep 2007 03:22 PM

So most iPod owners are thiefs and pirates? or did I read the above incorrectly?

Now thats just rude.

From _yc_ Sat 01 Sep 2007 04:04 PM

It is very arrogant of NBC to say that Apple sales iPods “at the expense of those who create the content that make these devices worth buying.” Apple iPods have sold extremely well since their introduction well before any TV Shows were available on iTunes. iTunes was the first if not only successful legal download site for digital media that is acutally making money for the artist. NBC has some nerves and I hope they learn a lesson with their crappy hulu site. (The name hulu is actually obscene in over half a dozen languages; what a joke.) (http://www.techcrunch.com/2007/08/29/hulu-translates-to-cease-and-desist-in-swahili-oh-the-irony/)

The people running NBC are so stupid and greedy they actually pose a threat to any company who partners with them. I hope the issues don’t get resolved just so that Apple stays away from NBC unless the current idiots running NBC resign.

Apple can make up that 30% with other networks. I buy music, movies and TV shows from iTunes and have never bought any of the NBC shows. I think Apple will be better off without NBC.

Time will tell.

From Bob Sat 01 Sep 2007 05:59 PM

Apple likes simple pricing models but they have abandoned that requirement on the music side with differential album pricing and with DRM-free music.

I believe Apple should let the content providers (such as NBC) have some freedom in their pricing and let them (e.g., NBC) bear the consequences in the marketplace. Higher prices for NBC shows will lead to lower demand—perhaps such lower demand that total revenue to NBC actually drops.

The only catch is that the wholesale price should be the same across all vendors, i.e., ad-free shows should cost the same whether on Amazon or on iTunes.

From _yc_ Sun 02 Sep 2007 05:58 AM

Why would any media download store sell content for twice the price at which the very same content is selling for on DVD. This is insane!

I believe that NBC has ulterior motives in trying to ruin the iTunes buying experience to make their own site succeed. There is a gold rush going on since TV as we know it today is changing radically. See link…

http://seekingalpha.com/article/46004-google-s-vp-predicts-end-of-tv-as-we-know-it-hd-video-at-apple-special-event

Apple should treat NBC like all the other studios. If one show is more popular than another, it will simply sell more. NBC can choose to take the deal or leave it as they have chosen to do. We’ll see how well they do with their site and partners.

Fortunately Apple iTunes is not dependant on this 30% of TV Shows to succeed. With superb service, well integrated devices and great shows from many other studios and networks including Disney, History Channel, Discovery channel and many others Apple iTunes will do well.

NBC can go “Hulu” in Swahili after kissing iTunes’ “Hulu” in Indonesian and Malay.

Time will tell…

From john Sun 02 Sep 2007 09:51 AM: Holy cow, did NBC just call me a thief just because I own an ipod? That’s sooo messed up.

From Brady J. Frey Sun 02 Sep 2007 10:39 AM: Joe #1 hit the comment dead on for me. I’m tired of media outlines justifying their price hikes and need to return to the failed sales model gone past as ‘consumer choice’. Much less, taking the next attack shortly after and accusing those same consumers if piracy! Look, I’m a busy business owner, I love to catch up I great shows on my time; DVR’s usually have expensive or time based limits (looking right at you Comcast, my home tv is not the same as a hotel room rental), i dont want to rent, anyones who’s even tried a torrent will know it takes loads of time for something that could suck… but on iTunes i log on, pick, purchase, download and get what I want with quality and ease. Piracy dies not equate to quality or convenience, and people like me would rather pay. Quit trying to force the market into what you want when your base is screaming it doesn’t work that way anymore. How can you not be idiots?

From Abhishek Sun 02 Sep 2007 10:44 AM

This is a growing trend among media entities. I am sure more content producers will go this route. Apple does have a monopolistic position in the online media commerce.

Also this will allow alternative business models and may make content cheaper for us consumers.

Read more of my thoughts here:
http://abhishek.tiwari.com/2007/09/02/growing-ihate-for-itunes/

From mike Sun 02 Sep 2007 11:11 AM

Here’s the deal for me:

I am Apple’s customer, not NBC’s. I have purchased quite a few episodes of NBC content, but I won’t buy one single episode that isn’t available in iTunes. Instead, I’ll reward networks that are smart enough to know a good thing when they see it , and NBC can kiss my ass.