Thanks for the article, and the freedom to respond.

I’m reminded of a local newspaper that used to have a comment section after their online articles, and now doesn’t; they don’t seem to quite know how to handle the whole public-feedback thing.

While the “content is king” thing seems sensible enough, perhaps the information distribution technology itself is now seen to be a basic component of any content - would this site be as popular without the ability of us to talk back, for example?

There is also the issue of the “network effect”: people value joining networks that they think others will also join or have joined.

I’m not being a Steve Jobs apologist (who I have heard to have his own “reality distortion zone” by wondering if I would bother going to several different sites, or switching my habits entirely, to download content when I can get so much on one platform such as iTunes.

I’m probably an oddball, but not only do I not have cable, I don’t have or want an “idiot-box” in my house - that the content price is “zero” monetarily doesn’t matter since that is more than I am willing to pay for it with my time.

It’s ironic that the studios seem to believe that they are the kings of content, and that distribution is secondary, since a similar argument could be made for the writers on strike: the writers actually produce the raw content, and the studios just distribute it via the television.

And is the vast expense involved actually necessary for good content, or is that a post hoc justification for the whole TV production system already in place? I get more enjoyment out of “Tiki Bar” and the Ninja guy on free podcasts than out of three hours of clicking the remote like a zombie, hoping that something interesting will come on.

Oh, and Feliz Navidad!

My only issue with the assumption that media sites such as NBC/CBS/ABC/Disney have “rich video players” is the assumption that you have a high-speed connection to the site. People don’t watch on an iPod becuase they would rather do that than watch on a PC. They watch it precisely because they are away from the PC and/or don’t have access to a high speed connection. People buy the shows for their iPods so they can watch them while riding on the subway, or flying, etc. These are mobile applications. It is all about mobility. No RF on a airplane, remember?

It’s simple. Content is king. The number of people who will stream network content (with commercials no less) is much larger than the number of people who will download itunes shows at $1.99, as nice as that is for those of us who can afford it. Soon all our devices will be WIFI’ed and we will be able to access those video streams.
If the networks are smart they will also supply the content with ads in mac and win format for those who want to take it on the road. We thank Apple for showing us yet again how to do it right, but Apple is a hardware company, not a media company. It’s the content, not the device.

I think you are misinterpreting the situation. Even though the broadcasters have their own players now, you can still only watch shows on their site. People want to watch content where and when they want. This explains the popularity of shows on the torrent networks. After all why would someone sit through a 2 hour download if they can watch media direcly on the broadcaster’s site. This measure will only increase the amount of piracy and illegal downloads of NBC shows. Stupid move in my opinion

I think folks are losing sight of the fact that this is not a permanent decision on NBC’s part. NBC can try to go it alone.. and maybe hopes that other content providers will follow its lead. But NBC doesn’t lose much if it changes its mind in a year, does it?

It’s clear to me that NBC doesn’t want my money…or the other iTunes exclusive downloaders out there. Just using my own experience to gauge this situation, there are quite a few shows I watch now only because of iTunes, including Heroes and Battlestar Galactica. NBC is missing out on a growing source of viewers in a time when viewership, not distribution rights, are a MAJOR concern with the broadcast networks. I WILL NOT consider going to NBC’s site for content. I know there are quite a few people like me out there that want fast, simple and centralized access to TV shows. I’m sure their are iTunes users who will make a side trip to NBC’s site but I won’t be. iTunes provides a one-click option from my desktop that a regular website does not.

Well, I watch 1 or 2 shows directly off the air but honestly everything else is completely moronic.

So I don’t watch much TV but when, for whatever reason, I get in the mood I just do a search on the usual pirate channels to watch stuff recorded off the air from all over the world.

Face it, Hollywood and the broadcast networks are quickly loosing out to globalisation too. And they just thought the had to contend with pirated mini-clips on YouTube and the like. How conceited.

NBC is likely realizing that there are numerous other providers who can offer minimum guarantees of revenues for its content, additional marketing funds, and various online or streaming options to delive content that may be more financially viable than stickly solely with the i tunes model. Amazon.com and other content sites/device aiming to take business away from Apple have likely nipped at NBC’s heals. Given Apple makes most of its cash off of selling the devices, as the number of downloads per user is very tiny, I’m not seeing this as a loss for either companies.

If I don’t find it, and buy it, on iTunes…I torrent it…I bought all of the Heroes epsiodes last year. I guess this year comes free.

(I posted the following stating previously on another but thought it applied here as well.)
This is prime time media posturing at it’s best. Being a buyer, I’m getting a kick out of this whole thing.
In any corporate negotiations, one of the primary rules is to keep the negotiations private. This is particularly true in dealing with Apple.
If a decision is made to make the issue public, it’s usually a calculated risk designed to motivate the other party into your way of thinking because they would rather not have the issue be public.
It’s always a risk\gamble. As with any gamble, the benefits can be great if it works out to your advantage. The loss\risk is usually equal or greater than the potential gain.
I don’t think the posturing is over yet, however, it appears at this point that NBC bet on red and the ball stopped on black.
Going public with the issue was probably the biggest mistake they could have made because now Apples’ response has made NBC appear to be the bad guys. if any price increases occur or the shows wind up unavailable to millions of iTune users, NBC will be blamed.
This will be interesting to watch being played out. Not sure how I would squirm out of this situation were I in NBCs’ shoes.
Today it looks as if their options are to sweat out the negative image being developed to see if the untried alternative (Hulu) will be successful or to give in to Apple having gained nothing but a black eye.
Can’t wait to see what happens though, the ball is in NBCs’ court now.
Much fun to watch.

In contrast to what was said by another commenter, I believe not only was NBC well aware of Apple’s new widescreen video iPod launch, but that this move was timed to coincide with it. NBC knows that content has never made Apple money. The music and video Apple sells through iTunes is a strategic position to insure that the iPod is fed compatible content. Any Mac user will remember about 5-10 years ago when web video started to move away from Real and Quicktime to wmv asf and other Mac-unfriendly formats. The iPod would have died a death from competing closed-system content if Apple hadn’t gotten in the content business directly. Just as they’ve done in software, to make sure that their Mac hardware didn’t languish for lack of software as it was starting to do in the 90’s.
NBC figured Apple was over a barrel with the vidPod launch just weeks away. Apple under Jobs don’t roll that way tho’. Job has matured greatly over the years, but don’t ever dare him - he’s still young at heart.

Quit complaining! To all of Ipod users who pay for TV shows; keep squinting your eyes and getting lasik so you can struggle to see that little screen and clean all that wax out of your ears so you can listen to the inferior stereophonic sound played through your $9.99 blue light special headphones! I’ll continue to sit back and enjoy the shows the way they were meant to be seen and heard: with a big screen tv and stereo surround sound . If you do not fit into the following category, then disregard the following comments.
Say what you will, but the purchasing these shows through Itunes is the poor man’s way of saying “I can’t afford cable because I am too busy fueing up my SUV and paying my 600+ minute cell phone bills”. Get your priorities straight! What is more important? I know that not everyone is capaple of purchasing cable. I have several friends that don’t. They work low paying jobs. They can’t find a better job. The things they choose to spend their money on just blows my mind! I am constantly getting notices from DirecTV for my payments being late. But…I bought a DVR. They are cheap! Don’t like commercials? TOO BAD!!! Don’t watch TV, period!

To get back to the bottom line…Itunes will no longer carry NBC, someone else will. There will be a program to convert the any new video format to that which an Ipod can decipher and shazaammm!!! You can watch it on your Ipod. Be patient. It will all work out in the end. So, don’t get your panties in a bunch. It’s all good!

If I offended anyone, I do apologize. I am not trying to wage class warfare here. I am just trying to say that most people that complain about money take little issue with the frivolous spending they do on a day to day basis and could afford the luxury of cable tv and a DVR if their money were budgeted. I’ve been there and done that and had cable and a DVR.

You clearly understand NBC. You need to spend more time understanding Apple. Not to worry NBC definitely doesn’t get it either. Apple would give away television shows for free if the networks would let them. Apple didn’t build iTunes to sell television shows (READ: Monitize Content). Apple built iTunes to showcase the Apple Experience/Apple Lifestyle (READ: Sell Apple Hardware). What NBC pulling out of iTunes really means? Consumers will be upset with NBC. NBC will be short a couple million on its bottom line next year. Apple will look like the consumer advocate/darling. Apple stock will go up. A few lucky independents and podcasters will get some additional “shelf space” in the iTunes store. Consumers will watch a little less “commercial/network television” and a little more of some other content on their iPods. And to borrow a line from the Beatles (and Apple)… “the beat goes go.” (READ: NBC is not the beat.) Thanks.

The networks may have nicer media browsers, but can you get online and watch any particular episode you want? For most of them, no you cannot–you can only choose from the ones that they have preselected for the moment.

If they don’t want to be on millions of iPods anymore, fine they are in a death spiral and perhaps on the other end they’ll come out a decent network again.

If NBC thinks I’m going to buy a Zune to watch their $5.00 shows, they are nearer to the end than we already think.

Paul, do you think Apple didn’t know that Disney was going to launch their own ad-supported player? I am certain Jobs knew either as Pixar CEO or Apple CEO. But Apple doesn’t mind that there are lots of other options, because they know they have the easiest for the iPod and iPhone, which are the devices people want to have.

The competition is great for computer screens but it doesn’t get the content onto iPod/iPhone or to a TV because the network-stuff is either streaming or DRM protected (using some non-Fairplay DRM which means it won’t work on iPod).

And sure content is important but so is distribution. Apple can certainly use HD content for its AppleTV (though it holds a trump - simply recording off HDTV). But content and network owners are delusional and/or arrogant in thinking that creating distribution is easy, and keep underestimating it.

Given Apple’s smackdown press release, how badly does Apple need NBC (given the non-customer-friendly terms NBC demanded), Paul?

Not at all, as can be seen by Apple’s it’s-more-than-okay-to-burn-this-bridge tone of the release. Ah, December? Screw you, NBC Universal, for your leaking and false innuendo!

And, Paul, care to revise your analysis?

Next week, after Apple releases a new range of iPods, especially an OS X-equipped large screen 6th Gen unit, NBC’s bright sparks will have time to rue their decision making. Watch the hype (already visible by Apple’s share price increase), and watch as more announcements about the iTunes store are made, making it an even more attractive place to visit and purchase. This weekend, I am betting Steve Jobs and Eddy Cue are on the phone (or iChat) putting more content deals together to further embarrass NBC.
My own activities are to grab NBC shows via BitTorrent, and when that doesn’t work, I pay 1.99 to iTunes (saves me download/upload transfer useage and it’s quicker and more reliable), and then I can watch on the iPod or Powerbook, the former without spending an hour waiting for it to convert from .avi to .m4v.
This posturing by NBC when the net is awash with UGC, and a community wishing to share will surely come back to bite them you know where.

First of all, I agree that Apple will need to Co-exist better with the big media companies. But I think that Steve Jobs learned a big lesson with the early computer wars with Bill Gates. A lesson he, IMHO, has taken to heart. Apple know has come to dominates this type of online music and video store. You might say that Apple is in the same place that Microsoft has been in since the late 80’s. Apple will get competition, but I do not think it will make to much of a difference since Apple has such a head start. Like I said, Steve Jobs most likely will not make the same mistake twice. What I see with NBC is that they are testing Apples resolve. They will probably loose and end up shooting themselves in the foot. Also remember that big media companies need distribution networks. It is unprofitable to re-invent the wheel and create their own. They will need sites like ITunes, You Tube and such to get their product out. I do not see any other network follow NBC until their whole game plan plays out.

Wow. Pretty arrogant move on NBC’s part. Aside from a select few shows (i.e. Heroes, The Office), most of their programming is garbage. Severing ties with Apple isn’t going to change the fact that the majority of their shows aren’t entertaining enough to pull in solid ratings.

I really disagree, I think that ham sandwiches are far more enjoyable than NBC believes.

I think the ‘Pay’ to watch network shows will disappear or become stagnant similar to that of ‘Pay’ satellite radio (XM, Sirius) for $13/mth. Why pay for what you can receive for free?

How much TV, music, news, sports, talkradio do we need to absorb? Why would you squint at a tiny screen? I own an iPod but it’s not attached to my hip.

Thanks to everyone for commenting. I figured I’d have a lot of Apple fans lining up to bash me, particularly since this post received some play on MacSurfer.

But keep the posts coming. In my defense, all I’m pointing out is that Apple will face more competition in the future from media company-owned sites.

So I think it is unwise for Apple lovers to dismiss all competition. The online video distribution battle is just in its early stages and it is far from certain that Apple can continue to dominate the market as it is currently doing.

But don’t get me wrong. I’m not predicting doom and gloom for iTunes. I’m just suggesting that the media companies aren’t as dependent on iTunes for digital distribution as they were a year ago. I applaud Apple for taking a tough stance with record labels and TV studios in order to keep prices down. But last I checked, Apple doesn’t produce TV shows or music. Many posters here seemed to be taking the stance that traditional media companies are unimportant. But without the networks producing the content that you download from iTunes, there is no need for iTunes. Therefore, Apple will need to make sure that it can peacefully coexist with big media firms.

I hope everyone has a great Labor Day weekend.

Do you think most people care about this? And most people that wants to download a show online and watch it on the computer or ipod, do you think they really download from iTune?

Media distribution channel via the media’s own website is so lame and only showing that they are still trying to hold on to it. All Apple has to do is to make ripping/converting any MP4 and DVD/HDDVD/Blueray into iTune/ipod (or even PSP) as easy as ripping a music CD and the media’s control is all over.

Paul, I am sure you are a smart guy, but this article sounds like have no ida what users are doing to get video into their ipod/psp.

Same song/show different day- the customer options are still:

1) Apple with its seamless combination of hardware, software, and marketing (and wait ’til the announcements next week!)
2) individual cos. trying to do their own thing
3) pirating

Strategy #2 is a consistent failure - Sony, MTV are the latest to join the long line of cos. to realize this. What is NBC thinking? Why would anyone pay $4.99 and use yet another new self-interested, not best-in-class service when they can always get it for free off the web or their $39 VHR?

Terry asks: “Who needs the networks?” Answer: you do if you watch TV shows. The networks are the ones that pay out the millions of dollars to get TV shows produced. Apple will never do that!

Nick asserts: “Broadcast TV is dead”. That’s just silly. More people watch TV than surf iTunes, YouTube, and all other web video sites combined. And by a wide, wide margin.

Hate to pile on, but as my wife and I both buy NBC shows from iTunes, I can tell you that this is a really stupid move on NBC’s part. This hurts NBC far more than it hurts Apple — and there are fewer NBC shows that I’ll watch as a result of this move. ..bruce..

Incredibly STUPID move on NBC’s part. But then, they partnered wtih Microsoft, so we’ve known they were stupid for a long time now. Their ratings illustrate this fact, as you also pointed out.

Philip Elmer-DeWitt a Mac expert? WFT? Never heard of him.

Paul, your rant here makes no sense whatsoever. It’s not going to hurt iTunes. Apple makes hardly no money on iTunes, it forks it over to smart companies like CBS and ABC.

NBC will see none of my money.

Jeeze, just get a DVR or TiVo and avoid all this altogether. And here’s the upside: the video quality will be bigger and better than anything the web can provide.

What’s interesting about a lot of these comments is how people seek their favorite shows out online, and actaully list those shows. Content is king! It odd to me that people have now become loyal fans of distribution platforms like iTunes or YouTube. To me, the medium is NOT the message.

It would be interesting to see if NBC sells its TV shows elsewhere online and how much it charges. If it charges less than $4.99, then it is clear that NBC is just negotiating with Apple with its ego and not for commercial reasons. Would I pay $5 for a TV show when I can watch it on NBC and record it to watch later? It will not be too long when these recordings could easily be “exported” to portable media players also. $5? Wow, that is really expensive.

Its very simple…. ipod is the most popular portable media product right now. The iphone will soon join it. If the shows are liked are not “easily obtainable”- meaning legal downloadable thru itunes, then I will find another way to get them (like i currently do with the programing that is not available thru itunes). Apple wins (they will continue to seel devices to play the content legal or not) - NBC loses

It is a blow to Apple, but they will be fine. NBC never said they would not make it compatible with media players (aka iPod etc). They are only capturing more of the distribution chain. So if you like a show, you can still buy it from NBC’s site, and play on your devices. People will flock to where the content is (iTunes, YouTube). iTunes had concentrated power, and this is an attempt by studios to dilute the power they have over them. Consumers will not suffer, because they can still buy the TV shows from NBC and play on ipods or whatever. And I am sure the boneheads will keep the same price. The precedent has been set. They just do not want to pay Apple for something they can do themselves.

I’ve been a Mac & PC user for 23 years & agree with the majority of opinions- The author is wrong and like most companies- just doesn’t get it.

It’s not that you can get the content cheaper, or company “X” has a new multimedia player, or that you can’t get specific content from iTunes or even the fact the the iPod has become so ubiquitous (although this has been influential).

Nobody I’ve seen offers the seamless integration of software and hardware that Apple does- nobody. This is the key that, IMHO, has made Apple, iTunes & the iPod so extremely succesful.

Almost any content I have on the Mac can be opened and converted to anything I need in Quicktime in usually one click-fast, simple, easy…DVD, cell phone, windows format, iPod, whatever- Apple is putting the customer first and has reams of recently converted market share (via iTunes) to show for it. Companies like Verizon who consistently hamstring their products to nickel & dime customers could learn a lot from that, but selfishly refuse to do so.

Sure Apple stands to benefit in the long run- but so do customers. Call me simple minded- but if it’s not on iTunes- I probably won’t bother until something truly better comes along.

How many decades (I can think of two) have some people been calling for the demise of Apple only to be blown away time and again by the innovation of this company. As for shareholder value- I bought mine at $15 in 2000- it has since split and is up around $140- nuff said..keep you customers happy and the rest will follow.

Apple needs to for it’s own production company and create it’s own shows. Or buy a studio like GE did, GE loses so much money on NBC/Uni they are both bleeders.

Broadcast TV is dead and why would you think that a TV network can do a better job that Apple.

Foolish article

Let see $1.99 for each episode times 24 episodes is $47.76 and I sure like the music companies they got at least 75% of the gross for $35.82. That not bad considering people could record it free using a VCR or EyeTV. But $4.99 for each episode times 24 episodes is $119.76 are they insane!

By the author’s own logic, NBC’s pullout isn’t a blow to Apple’s iTunes. To hear him tell it, iTunes’ appeal is a function of it being the only high-quality alternative for downloading and viewing the networks’ media. But “[n]ow, however, sites like Disney (DIS)-owned ABC.com for example have incredibly rich video players. Gone are grainy, small Flash players. Many of the players on TV network-owned sites are now close to high-def quality and can be watched in full-screen mode.”

If so, then NBC’s pullout is merely the trace of a telling blow struck when Disney and others installed high-quality media players on their sites.

We’ll see if [insert name of flavor-of-the-month iPod/iTunes killer] fares as well in practice as it does in theory.

NBC is clearly trying to capture more value from this distribution channel by shifting distribution to their joint venture with News Corp. They will need to invest and develop Hulu as a distribution channel. Apple has made a significant investment already in developing a portal, a great device for their customer and a community of users that are highly engaged. NBC won’t lose their hardcore viewers but it seems likely that they will lose a lot of incremental sales that came from users of iTunes that sampled and bought through the portal. Given the risks and the cost to develop the new channel, I think both companies took significant risk by ending the relationship

I think it is a blow to apple. However, I think this was inevitable.
With Itunes Apple launched inexpensive, very easy to use and convenient platform for music/video providers. Ipod’s popularity ensured that Apple had upper hand in negotiating the contracts with content providers.

However, the bottom line is that people flock to Itunes for content that companies like NBC provide. It’s not surprising that those companies figure they should have more to say on how the product is sold.

It doesn’t have to be bad for the consumers. It might mean that the market will be more fragmented, which will bring pressure on the prices. NBC might want to charge 4$, but are they going to get that if competitors offer their content free or for much smaller fee?

He who has distribution is king. Big mistake for NBC. Huge.

The beauty of iTunes is that it enables a la carte purchasing of TV shows–not to the detriment of the big networks, but the cable companies. Let’s face it, most TV isn’t worth paying for. If you’re not into live sports you can easily download the shows you want and save a lot of money on a monthly cable subscription. NBC’s failure to renew with iTunes will impact the way I watch TV, but it won’t get them any more of my money.

My, what short memories we have…

I seem to recall that NBCs ‘The Office’ was in the ratings dumpster until it became available on iTunes. After a huge surge of downloads via iTunes, the show became a hit on the network. Apparently the folks at NBC have forgotten what a ratings booster iTunes is, and even these days, ratings is the name of the game for TV network $$$$.

This is a silly move on the part of NBC. So they will make all the programming available on the Hulu site when it’s up and running…If it’s not downloadable, and not portable…I won’t watch it. For instance, I love to download episodes of Battlestar Galactica and watch them while I fly. I don’t want to sit in front of my computer to watch a tv show…even on my 30″ cinama display. I want the portabilty of iTunes. Just thought of something…will this affect the Pod Cast from producers of these shows?

Ultimately it’s a blow to NBC because there is no popular legal distributor of this stuff other than Apple. Is Microsoft going to popularize NBC shows on the internet? Or is NBC going to go it alone and be successful?

I think NBC is cutting their own nose to spite their face.

Author is right about one thing - video is still a minor player but Uni-Fox thinks Hulu will be major player so they’re trying to move everything there. Won’t work. just look at MTV Urge or Viacom;’s ifilm - they are too wrapped up in legalese to be succesful - when lawyers get a say, consumers just look elsewhere. There is HD taping off the air, there is HD bitTorrent and there are season DVD’s - then it’s itunes. Hulu and others are way way down the list.

This is only going to hurt NBC, not Apple. People will still continue to buy iPods from Apple, regardless if they can get their TV shows from NBC via iTunes. Whatever new video store that NBC comes up with will be so laden with DRM that most people will not bother to buy them. And if people figure out that they can’t play them on their iPods, it will only further decrease their sales. Dumb move on NBC’s behalf. Lets see what happens in a years time.

Hmm, interesting… 19 comments as of now, and not *one* agrees with the author. Frankly, I am not so sure myself, but I’d rather root for Apple than for NBC (or Universal, for that matter). Trying to save themselves, the networks forgot to think about customers. Apple, meanwhile, puts the customer in the driver’s seat. Not easy to go back to being the TV network’s puppet once you’re used to such great treatment!

The relationship between the media companies and Apple has never been good, and it was just a matter of time before the marriage started to crumble.

I think NBC was premature in cutting it’s ties with iTunes, given that they have no other tested model of distributing these shows for a profit.

In the mean time, Apple continues to innovate and move forward. The media companies are basically playing catch-up to a 5-year-old model built by Apple.

They may just find themselves eclipsed again by the next big thing.

I dont own an ipod, dvr, or pay for more than basic cable tv, but i use itunes exclusively to download missed shows (Battlestar Galactica, The Shield) or entire series if not yet on dvd (Showtime’s L Word season 4). However, I prefer to watch missed shows for free on the network websites such as ABC (Lost), NBC (Heroes), CBS (Big Brother, Survivor, Jericho) and fox shows on myspace (24, Vanished). If every network provided their own site with my favorite shows then itunes would rarely see another purchase from me. I don’t buy movies cuz they are cheaper to rent with my blockbuster online/in-store subscription. I will use Hulu if it’s free.

I can get most of these shows on XBox Live or Amazon Unbox, which can play on my video player, and in my living room, so I could care less about the NBC/iTunes.

You are a fool.. NBC’s loss not Apple’s.. Apple expert Philip Elmer-DeWitt.. yeah right, I’m ROTFLMAO at that one. An Apple hater he is and expert he is not.. Dream on silly men.

It sounds like a war between two business models: cheap digital downloads or free ad-supported downloads. Apple’s model is the former, and it works well, especially in an environment where piracy is difficult and/or risky. However, if the network can get $1 in ads but get 3x as many people to watch, then clearly that model would be more profitable. There’s also the question of which distribution method impacts DVD sales the least.

Wake up and smell the piracy, my friend. The chief competitor to iTunes isn’t the garbage you mention — it’s bit torrent. If I want a show, I first go to iTunes (it’s relatively cheap, no ads, high quality video, easy to find stuff, quick download). If I can’t find it on iTunes, I go to bit torrent (no ads, free, somewhat harder to find stuff, not as fast of a download, NO DRM).

I hate watching content chained to my laptop or desktop, and having to go to a bunch of different web sites to pull content is lame — with commercials no less.

iTunes is great because it offers a central media store, universal sync/play to all my devices either portable or non (such as the ATV in another room) and time shifted play (I can grab a bunch of shows then watch them whenever/wherever). Can’t do that with a proprietary web site with some custom web based player.

Certainly worth $1.99. NBC has no clue what they’re doing or what people want — probably why they’re the 3rd rated network. I say iTunes contributed to the popularity of some of these shows not the other way around.

iTunes is just too convienent. I don’t want to hunt around every network’s website to find something. iTunes let me do what I want with my download — all these other sites try to control how/where/when you watch content. If you don’t make it easy, people just turn to pirating. Didn’t iTunes make “The Office” financially viable for NBC? They are killing their Golden Goose.

Going it alone would be an ambitious and fool-hardy move for NBC. Itunes is a tested and proven distribution model, and a profitable one for NBC. If Hulu isn’t mired by technical glitches and the competing business goals of two major media companies and their combined marketing armies, then it may stand a chance of garnering interest and traffic - but that’s a BIG ‘if’. The smart move for NBC would be to hold onto their deal with Apple as a hedge against the uncertain success of Hulu - but then the ad guys will probably insist that Hulu be the ‘exclusive’ distribution point for digital downloads, and when it turns out that the service sucks, everybody loses.

Back to file sharing services to fill the iPod. If NBC doesn’t want their TV shows legally downloaded then I predict Apple will just update their Apple TV with a recording option to get free content over the airwaves for users to fill their iPods. No revenue for networks, of course Apple will still make money from iPods, iPhones, Apple TV and Macintoshes, one giant step backward.

I don’t understand. Are you rooting for the networks? You actually want to pay more for content downloaded from iTunes. I think iTunes will do quite nicely without NBC TV content. A year from now, check again to see how the decision to dump iTunes is working out for the network.

I’m not convinced that this is “a big blow to Apple,” even if the NYT is correct. Apple has always been pretty up-front about the fact that iTunes sales are intended to drive the purchase of iPods. Do you really believe if people can’t get The Office on iTunes anymore, they’re not buying an iPod/iPhone? Apple’s profit margins continue to grow, and as video becomes available on more Apple devices, the networks will come back in some form. It’s easy cash for them, and as long as it’s not an exclusive deal, it won’t seriously dent other ventures like Hulu.

Outside of a TV set, it’s been shown that the device is the primary driver of distribution, not the other way around. See JupiterResearch studies.

Now add in that the iPod and iPhone have 30% profit margins, while an iTunes episode yields maybe a 2% margin, and you realize that Apple sells episodes in order to sell devices.

Then it will not be long before both iPhone and iPod with wifi (rumored) can be used to view those “incredibly rich” network sites. Will Apple protect its iTunes store by blocking access on those devices? We’ll see but I don’t think so. But iTunes will still be easier to use with those devices than anything else for ad-free.

You’re analysis is zigging while Apple is zagging. Rethink it.

Personally, this deal (or the lack thereof) frustrates me a bit. My schedule is such that it is sometimes difficult for me to watch television shows when they initially air. It was a great venefit for me to able to purchase these shows through iTunes so that I could watch them when I want and where I want via my computer, and now iPhone. If I can’t get these shows through the convenience of iTunes and onto my iPhone/computer, I have no desire to go through other gyrations to obtain them. I’ll simply go back to setting aside time to sit in front of the television and watch them via DVR, thus depriving NBC and the other networks of receiving ANY revenue.

Are you saying that NBC wanted a lower price than 1.99 per show for ad-free content?

What cloud are you on?

Obviously, this announcement has nothing to do with piracy and everything to do with how NBCU thinks it can monetize content on every distribution channel.

You claim ” I was never happy to pay $1.99 to watch something I could get for free”, but with a single purchase on iTunes you had the ability to watch it on (multiple) computers, TV (AppleTV), or take it with you, all ad-free. And you could forgo the DVD purchase because you had a digital copy.

Now NBCU is going to stream it free on Hulu (with ads), sell it on DVD (with more crappy preview ads), and presumably strike deals to let it play on VCast (with ads).

It is clear that Hulu thinks that this is mutually exclusive to iTunes purchasers - i.e. that people who buy shows through iTunes will now put up with this crappy model. I doubt it. The viewing behavior and purchase intent of iTunes users is NOT the same as those who view video on the web through YouTube or Joost, but then its not like NBCU or the other studios really a give a hoot about actual customer needs.

I beg to differ…
Apple has a winning combination of easy to use products and fans. It’s not just the shows that lead to the sell. It’s the iTunes Store and it’s followers, the iPods and iPhones, the easy to use iTunes application and most importantly, the no-nonsense pricing and billing that people can relate to. Otherwise shows will be pirated and distributed via bittorrent.

It is NBC lost not Apple’s.

Paul,

I want to hear from you again, January 1, 2008.

Richard

Simply put, if Universal and the other players don’t go along, they will be left behind. The future of TV is in internet delivery, and companies the ilk of Universal have NO CHANCE of doing a competent job making this transition without Apple. In contrast, Apple does not need any of these Luddites; they make money from the hardware.

I think you are missing a big issue here. There is content and then there is the device to watch and/or hear the content. Apple bets that you will watch or listen to content on their devices (IPod, Apple TV, IPhone). The question is who needs the networks?