Biting the Hand that Feeds You
August 31, 2007
Some stunning developments in the world of net delivered entertainment today. First came a salvo from NBC that said it was opting out of their contract to sell its television shows via the iTunes store starting this December. NBC reportedly wanted more control over content bundles as well a “flexible” pricing structure. No doubt bolstered by Universal’s recent decision to go month by month in their contract with the iTunes store, NBC attempted to gain the upper hand with Apple and publicly announce that Jobs & company weren’t playing fair. Apple’s insistence on simplicity and a single price meant the network would have to remove its programs from the largest online media store in the world.
It didn’t take long for Apple to fire back. The computer company issued a press release that in effect said NBC was insisting on raising prices by a whopping 250%, making episodes that were once $1.99, now $4.99. So rather than force consumers to pay almost $5 for anything from a 1/2 hour episode of The Office, to a full hour long drama like Heroes, Apple decided to not wait until December, but pull the “plug” now. I love this bit:
“Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September.”
So in other words, NBC’s not going to get shit. Apple won’t post any episodes from the upcoming season of such fan favorites as Heroes, Battlestar Galactica, The Office and 30 Rock. Never mind the fact that the iTunes single-handedly prevented NBC from canceling The Office in the first place, or that you can TiVo these shows for free now, or even that higher-quality versions of all of these shows are available hours (not days) after they are aired via bit torrent. No, NBC thinks it knows what’s best for their customers and it has demanded that Apple start charging more than double for something that just frankly, isn’t that good.
This move will do nothing to help NBC and everything to give Apple even more bargaining power with other content providers in the days ahead. I can’t wait to see NBC try to sell an episode of The Office for $4.99 on NBC.com or even via Amazon Unboxed. I’d sooner save my pennies and buy the DVDs for a fraction of the cost than pay over $100 for a low quality, DRM locked season of Heroes. Who wouldn’t?
Jeremy Horwitz of iLounge has written an open letter to NBC concerning their arrogant strategy. He hits the nail directly on the head, and I sincerely hope the suits at NBC read it and take it to heart. We’ll get our shows via DVR or torrent for free, piracy will increase, and NBC will lose millions in revenue because the peacock didn’t know when to shut up and smile. Sounds like a fair trade to me.
UPDATE: An interesting side note. NBC will be launching its own video website in October named Hulu. What’s Hulu you ask? Although just a fun, rhyming name to us, Hulu actually means “cease” and “desist” in Swahili. Speaks volumes about NBC and their level of competence in this entire affair.