The New York Times is reporting that NBC will not renew its contract to distribute television shows via Apple’s iTunes service. The agreement was set to autorenew at the end of 2007, but includes a provision that allows NBC to terminate the agreement at the end of the first term with 90 days notice. Disagreements over pricing and DRM seem to be behind the decision.
That means iTunes users will not be able to download popular NBC shows, including Battlestar Galactica, The Office and Heroes, to their iPods. Was the decision influenced by NBC’s ownership stake in the iTunes-competitive upcoming Hulu service? Almost certainly. The last thing the TV networks want to see is Apple having the kind of control over TV content that they do with music - 76% of online music sales come from iTunes.
NBC accounts for 40% of digital video downloads on iTunes.
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A TV show on iTunes is $2 a pop. A 24-episode season is $48 total, perhaps $4 cheaper if you do the season pass bit. On the flip side, a DVD set at the end of the year is around $45.
Or in other words, what they’re charging now at Target for a set of boxed DVDs is basically what I’d pay on iTunes, with no box and no DVDs. (And I bet Target gets more as a retailer than Apple.)
With all of that, they want to RAISE prices? Charge more for delivering a digital product with no disks or packaging costs? That we have to download and store?
Just how much do they think 40+ minutes of entertainment is worth? Especially with a BROADCAST television TV show that most can already get for free?
Stupid. Stupid. Stupid. Stupid. STUPID.
ESpecially considering NBC gets loads of traffic to its free TV showings on NBC.com. At least with iTunes you get a pretty devoted willing-to-pay-for-things userbase. I doubt if anyone will use hulu.com. Lame name BTW.
Hulu is a factor, but I’d like to put forth the theory that watching long-form drama on a tiny screen simply is not an easy sale. Even 22-minute sitcom shows are meant to be watched by sitting on a couch some distance away from the TV sets.
It’s been said many times that going online is a “lean-forward” activity and not compatible with the “lean-backward” TV watching experience. Hulu is more like a defensive strategy for these desperate studio heads. All statistics indicate that people are watching less TV and going online for their entertainment, and these Wolfgang-Puck-fed suits simply panicked!
think apple is worried that a mud slide will occur considering universal’s backing out and now nbc? that’s a lot of lost dollars already.
Well, I was going to buy a season pass for the Offfice, but now I’ll just have to download the episodes off bittorrent. =/
Arrington, seems like an opportune time to bash Hulu again. You know, just because they didn’t say they loved their users during their media annoucement, and because you were their #1 fan ever until that statement came out 2 days ago.
Here is an unsolicited advice for the fine gentlemen who will be in charge of Hulu.com: in addition to posting ad-supported full-length shows, set it up as a fan-participation site, put up bite-size clips, and encourage the fans to post their own mashups, re-enactments, tributes, etc. In other words, learn a lesson from YouTube, as much as you hate to.
“think apple is worried that a mud slide will occur considering universal’s backing out and now nbc? that’s a lot of lost dollars already.”
Don’t forget that aside from the movie division, Universal is also the parent company for NBC and The SciFi channel. It’s not much of a strech to expect one to be pulled if the others are pulled.
On the other hand, what possible theory are they operating from? Does Microsoft have a stake in this somehow with their HD-DVD influence? Reguardless, iTunes is a distributor, a store. Such a thing is like pulling the DVD sets from Walmart because Target will pay a higher retailer cost. Or worse pulling the DVD’s from all online vendors like Amazon.com so you can sell from NBC.com.
Crazy.
That puts NBC on my $hitlist. What jerks. They don’t like people buying their shows? I have bought Battlestar Galactica, and 30 Rock. I travel a lot, and watching shows on my iPod is a great time killer.
Decision makes no sense.
Hulu looks like it sucks.
It’s not “Universal bailing out and now NBC.” It NBC Universal bailing out. Hope they like that website with the cobwebs growing from it.
Why does everyone assume that Apple was the saint in these negotiations? I’m constantly amazed that everyone gives Apple the benefit of the doubt.
People watching TV shows and movies on a PC or cell? This is moronic.
People think and say ” it’s cool ” But who says being ” cool ” is being smart.
I laugh when I see people doing this.
No one has said that Apple was a saint. No question, they want to sell ipods, iphones, and appletv’s. But it’s not like NBC Universal was giving this stuff away. It’s a bonehead move.
On another note, who has cracked the DRM on the videos? I haven’t seen anything about that.
I just purchased an AppleTV and canceled cable with the intention of using iTunes to get all of my content. Two shows I really like (and was planning on paying for) are from NBC. This is really disappointing.
D’oh! Now I will need to get Miro (aka The Democracy Player) and grab The Office episodes from tvrss.net: http://tinyurl.com/2drogs
Riiiight,,, so I am going to pay more on the Hulu site for a show (I make this assumption because the whole thing with ITunes is they want to raise prices if they want)…. yeah ok
And now I cannot watch on Apple TV,,, which is big because who wants to sit in front of the computer to watch shows..
Good move NBC
hey jim h and jeff
-universal music group belongs entirely to vivendi
-vivendi only owns 20% of nbc and ge owns the other 80%
so it’s not a give-away that they’d move together on something like this.
I discovered The Office and Heroes through iTunes and ended up buying a total of 4 seasons worth of shows as a result. No more NBC on iTunes? Bittorrent here I come.
Hey check out my website -http://dilemmo.info
It could end up just being temporary to see where they realistically stand with Hulu. Or it could just be a negotiating angle to increase their share of the revenue. We’ll just have to wait and see. Yes, NBC will lose some revenue from this, but most TechCrunch readers are looking at this from a skewed perspective. In the grand scheme of things, Itunes still represents a tiny fraction of NBC’s revenue and they can afford to take the marketshare loss on this a lot more than Itunes (a big chunk of their most popular TV content appears to NBC/Universal productions.)
I guess there’s a sense of safety in numbers if you go the bittorrent route. But tread carefully. The vast majority of people I’ve read about who seem to be getting the DMCA violation notices from their ISP usually got nabbed for an NBC-affiliated download (particularly The Office or Battlestar Galactica.) They’ve definitely been the most paranoid/vigilant in this area.
Steve Jobs will have one discussion with NBC and NBC will sign a 10 year contract and that would the end of the story
I’m not sure they’ll definitely raise the price on Hulu. Guess we’ll have to wait and see. Perhaps they don’t want to give up whatever Apple’s share was of the $2.
What NBC did right: I swear by The Office
What NBC did wrong: Didn’t realize bankers are never home by 8 and I don’t want to stream my TV
Solutions: Buy Tivo, skip adds
or
Bittorent again. (There goes my New Year’s resolution)
So what they are really trying to do here is make Hulu the exclusive home of these shows so that they get some traffic on the new Hulu site and begin to market this new brand. My understanding is Hulu will be free for first runs (i.e. several weeks back access) but might have some kind of membership or charge to see previous seasons &/or episodes outside of a several week window.
“Pricing differences” seems to merely be the excluse to support a change in business strategy — i.e. new property to support that is ad supported. Ad supported is the traditional TV model — one they are very comfortable with and whose costs/structure they know well. The reason for the partnership on Hulu is traditional media companies suck at internet ventures and have lost tons of money — trying to containerize/share the infrastructure expense and dodge the political bullet if it blows up (again) seem to be the reasons for Hulu.
They see the $ going to be made by Google/YouTube and likely want to run both new online only campaigns but also very likely seeking highly profitable cross over campaigns whose sales include both TV & internet.
The real question is why can’t they continue to do both online streaming NBC.com(or Hulu) and iTunes download? Because they feel they must do this to help Hulu succeed. Plus anything to spite Apple as the networks feel like they are losing their control and they know they can’t beat Apple this round but want to hurt it if they can until there is other viable competition (Video on Demand Cable, IPtv, etc) to then be able to play hard ball next round.
In reality, I’m not likely to visit a streaming site on the net vs. an on demand option. I’ve bought TV shows on my Xbox 360. I’ve previously purchased a season Battlestar and some random episodes of Heroes from iTunes when my cable was knocked out and my Tivo didn’t work. I tend to watch them on my laptop or Apple TV vs. my iPod. However, with the rumors of the new Touch iPod and if it has WiFi — I could see some game changing happening here.
that crunchbase crap is annoying. make a script that can auto-deploy BOTH the actual link AND your crunchbase link please. so that way i can get to what i want to see, you can pretend you’re providing context AND increase your pageviews.
Om Malik of GigaOM is reporting that Apple has just kicked NBC off their bed and will NOT offer NBC’s upcoming new shows starting in September, even though Apple’s contract with NBC won’t end until December.
There you go. So, who’s zooming who?
Yeah, it’s official. The announcement is now on Apple’s site.
This is such a dumb move it is silly. Does anyone really think people will go to Universal Music.com. NBC.com or pick another silly name like Hulu.com for a limited set of content with higher prices than iTunes.
I can’t wait to see these clowns (no pun intended) coming back to Apple in a year or two and begging to get back in to a store with 200 million customers all over the world. Dream on if you think I am going to sync my iphone or ipod with 5 stores for content.
I am personally boycotting all content from Universal and NBC for doing these moves out of greed and not taking into account the customer experience.
I happen to think that Apple is right in wanting to keep prices reasonable, low and simple.
“Well, I was going to buy a season pass for the Offfice, but now I’ll just have to download the episodes off bittorrent. =/”
This seems to be a popular attitude among iTunes users. Now I see why Universal and NBC are seeking greener pastures. You can talk all day about “unfair” distribution of original content, but resorting to illegal activities when there will be perfectly legal ways to do it is simply childish.
This is one more reason to ensure the removal of proprietary DRM on Apple and MS products, while opening up content to any device a person chooses to use. Although the numbers are large, keep in mind that not everyone is an iPod/iTunes user and we need more competition to keep things open.
“iTunes - get it here or steal it!”
Apple and Vivendi (NBC Universal) have been at each other for a while over pricing of music and now video. Vivendi forgets that before iTunes the sale of music online had failed miserably! Now Apple has sold billions of songs they want to tell Apple what price to charge? Apple is right to offer one price for any song. The record companies have to rethink their models and realize that they have to be less controlling with how their music is distributed. This goes for movies and videos as well of course. As many have pointed out, you can easily steal any content you want. By taking their content off of iTunes NBC/Universal is shooting themselves in the foot. Good luck with your own store guys!
First of all, Vivendi-GE — what’s the difference. My guess is, Universal wouldn’t have made move one if upper management hadn’t supported it.
As for you, wlrock, that’s a great idea. Start a business by calling your potential customers evil thieves. Good business plan. In order to seal it, threaten to more than double the price of the shows the audience wants to see, while giving them a discount, no doubt, on the first season of “Two and a Half Men.”
I seem to be the opposite of many other people here, I don’t mind a lack of box and physical DVDs when buying videos, I see it a big plus when buying.
It’s far far easier for me to click on a button to watch an episode of something than to find the right box on the shelf, and swap discs when I want to watch the next bit of the season or whatever.
Granted, I could rip DVDs to my computer, but It’s terribly time consuming and I really can’t be bothered.
@28/wlrock
I was noticing the EXACT same thing. It’s scary that so many people just seem to assume that unless it’s on Itunes, they’re fully justified in stealing it. People whine about the possibility of having to sync their music/video library with multiple platforms. Meanwhile these same people juggle 38 social networks, multiple IM/email accounts, etc. without batting an eye.
DRM is of course what makes this all so difficult. A lot of people are just more than happy to leverage themselves neck deep in Apple’s DRM that they don’t care to think about other alternatives. More competition for Itunes would help open up some of the DRM barriers making it easier to get a wider range of content from a wider range of sources.
I never really understood buying shows from itunes since nbc shows them online for free, you can watch some on tv(except black donnelys) or buy a dvd set for way cheaper.
When digital photos first started I jumped on. After several years I had to change providers since many failed. When iTunes came out I thought it was cool, but held off because I did not want to be in the same boat with my pictures when it came to music. I dont mind going to several sight to download my videos. Is it easy? No way - TV Shows and movies take time. I would rather have it all on iTunes (or one place) so it just downloads on its own. I dont want to join hulu or anything else only to see it close in a year (or worse mid-season). I pay for iTunes because it is simple and easy - I have not seen any other sites with such simplicity. If I have to waste time then I will just use bittorrent (which, for the record, I would rather not use).
This is hilarious. NBC wants to charge even MORE for boring crap nobody was paying $2 for anyway because they can get it for free already, either on TV or via a Torrent.
Feeling shafted by NBC’s proposed $4.99 an episode price hike that got their new fall season kicked out of iTunes?
Kevin Wick has been kind enough to look up the contact information for the NBC Executives that are key to getting this situation reversed.
Amy Zelvin, NBC Universal Digital Media Communications, (212) 664-7436 amy.zelvin@nbcuni.com
Joe Libonati, NBC Universal Television Group Publicity, (818) 840-3050 joe.libonati@nbcuni.com
(edit) Some additions-
Jeff Zucker, President and Chief Executive Officer, NBC Universal (212) 664-4444 jeff.zucker@nbcuni.com
Ben Silverman, Co-Chairman, NBC Entertainment and NBC Universal Television Studio ben.silverman@nbcuni.com
Now, please don’t call these people and threaten them, cuss them, or yell at them. That’s not going to get anything accomplished.
If, however, you want to politely let them know how you feel about their suggested price increase, and subsequent removal from iTunes, it might actually have some affect.
If enough people call, NBC just might listen…you never know.
Good for NBC, we are working to get them on xBox!
http://fakesteveballmer.blogspot.com
Can’t see how Hulu would make anything like the kind of money itunes was making for NBC. I guess we’ll find out. http://tinyurl.com/2j52vj
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/200.....or-itunes/
This is the worst decision that NBC could make. People are buying your shows! I hate DVDs, the only use they serve is to rip onto my computer. Give us a friggin break and let us download them through iTunes and give you money instead of downloading through Pirates Bay and everyone loses.