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Apple to NBC: Fine, Take Away Your Downloads

You don't usually see this kind of public truculence in a tiff between name-brand companies, but somebody at Apple sure seems to be sick of dealing with NBC. In a press release issued this morning, Apple says it will stop carrying NBC's shows on the iTunes Store because NBC wanted to charge too much:

Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99.

NBC also apparently wanted Apple to impose still tighter copy controls on iTunes video downloads (right, because customers just love extra DRM). What's NBC's alternative? The network seems to be banking on Hulu, a video-sharing site that it will launch with News Corporation this fall to provide free, ad-supported streaming video of its shows.

I can't say that this will make much difference to me. I haven't bought any TV shows off iTunes except for research purposes--why spend the money on a copy that I probably won't watch more than once? My favorite way to watch TV shows I've missed remains ABC's free online streaming (which now comes in high-definition). If Hulu provides the same quality and ease of use as ABC's site, I'll be happy to catch old episodes of The Office that way.

But other online viewers think differently, and I don't see how getting booted off iPods and out of iTunes will boost NBC's competitive position. Put simply, the network will be leaving an overwhelmingly popular download store that's made it a tidy little profit since the end of 2005 in favor of a site with no brand equity and an audience of near zero. (See CNet blogger Don Reisinger's entertaining rant from earlier today.)

Will you miss NBC when it's gone from iTunes? Where do you go online to catch TV episodes that you missed?

By Rob Pegoraro  |  August 31, 2007; 2:44 PM ET
Categories:  Video  
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It'll be bittorrent for me.

I already don't pay for cable, but i DO pay for shows on iTunes.

So i'll either just stop watching NBC content, or i'll be downloading it in HD for free without commercials.

I prefer to take the legal route, but it needs to be on reasonable terms. streaming on the website is a non-starter for me, as i want it on my bigscreen or on my iPod, not sitting in a chair in front of my computer.

Posted by: Jeff | August 31, 2007 7:10 PM | Report abuse

i don't have an ipod but i purchased a season of The Office from iTunes and watched it on my computer. i never go to websites to watch tv shows because of all the clutter i have to go through to find the particular show, then hope whatever player they are using is compatible with mac. itunes makes it easy. i need easy for television viewing. as for NBC shows, i guess i won't know what i'm missing.

are these entertainment companies all run by lawyers and old men? more DRM? really? higher prices? really? yeah, we consumers will support NBC's decision, of course we will. i wish i could pay more money for everything.

Posted by: Anonymous | August 31, 2007 7:11 PM | Report abuse

Such a childish split that it had to spawn an internet comic all its own:

Posted by: leah | August 31, 2007 7:18 PM | Report abuse

Well considering that NBC's parent company was one of the first studios to accept a (so called) bribe to exclude Blu-Ray media from their roadmap, it doesn't surprise me that the studio's children might also, apparently, fall prey to their own greed.

Posted by: Jeff | August 31, 2007 7:18 PM | Report abuse

I've got an idea for NBC. Why don't they start suing college kids who download illegally? That was such a great move for the record companies and solved the problem of the illegal music downloads. There's no greater idea than alienating your audience by making them criminals.

Posted by: Anonymous | August 31, 2007 7:19 PM | Report abuse

UP with Apple! DOWN with OLD NBC! They don't realize what a great gift iTunes has been (and could be) for their business. Why does Jobs have to consistently deal with these backwards-thinking media mogul imbeciles, running outdated network TV? Time will show how short-sighted they truly are, especially in their understanding (actually, lack thereof) of the ever-burgeoning youth market.

Posted by: Tim | August 31, 2007 8:14 PM | Report abuse

This whole thing really illustrates how much the media corporations continue in failing to understand digital marketplace. It has been widely publicized that Apple actually makes hardly anything for content purchased on itunes. Just about all of that money goes to the media corporations who sell their content on itunes.

To make the FUD statement that "Apple is only interested in using iTunes as a means of selling ipods" is old news. NO kidding! We've see that movie before. What is really boils down to is a place where people can acquire content with reliable quality at a price just cheap enough to pay so that they don't just get it from Torrent or .

To say that they are concerned about piracy and that is why they are moving away from iTunes is just ridiculous. Its all about the money. Pointing the finger at Apple is predictable but Apple isn't the culprit. It is what it is. NBC wanted to charge more for each individual episode so they could steer customers into paying for their bundled packages at a perceived savings.

It has been written already that the effect this will have on NBC is a reduction in profits and an increase in piracy and I have to agree completely with that statement. The only other method they will have at income is through a site that offers this content for free, in streaming form only, through advertising subsidy. Which for them represents no change in business model from offering TV shows over the air.

In the mean people will source content from DVR systems or just download it from torrents. Then any profits NBC made on advertising will be turned back towards litigation just like what has happened to the record companies.

Is piracy the reason for the reduction in profit? Not quite so much as a vendor that is failing to understand their market. They obviously failed economics. They have a market that is willing to pay so much for goods. They are refusing to work with an outlet which clearly does understand what people are willing to pay. Remember, its not so much that Apple wants to control their industry...its very much the case that Apple gets it. Offer quality and reliability at a price that reduces piracy and there is money to be made. Mess with that and you open yourself up the market finding other ways to acquire...and usually you won't see a dime.

Remember, we've seen this movie before. All you have to do is look to what happened with Microsoft Windows in China. Offer the real deal at a price at or less than the counterfit and you make money. Charge too much and you end up with nothing. That is why Windows is $3 in China and significantly more here. Its what we are willing to pay...and what the chinese aren't willing to pay.

You'd think executives with their education would be able to grasp simple economic concepts. Its pathetic to the extent that its funny anymore. Its funny too that these guys look elsewhere, like Walmart for example. Because Walmart is such a flexible outlet right? Doesn't Walmart pressure companies to offer goods at prices that Walmart sets? Look at what happened to Tupperware when they walked away from Walmart. This is all around us and yet these guys continue to miss it.

Anybody that knows anything about sales knows when you have a strong channel you leave it alone until you have something better. To do otherwise only alienates you from customers and decreases revenues. I think my dog could run a record company or a broadcasting network. It obviously doesn't take a genius.

Posted by: Anonymous | August 31, 2007 8:43 PM | Report abuse



Posted by: G Man | August 31, 2007 8:59 PM | Report abuse

This is the greed that is killing corporate America. The NBC CEO's are just trying to fatten their pockets off the I-Tune Stores. Jealousy and envy that's all this is about. Everybody is taking a shot at Apple; one thing most do not understand is that Apple has a cultural following. Apple, like Google products are designed and built for value. Most of the so called tv shows and programs from NBC are not even worth paying for. Secondly, in this modern time, who has the time to go back and start watching expired shows.

Google has made money through adverts, as a result every company wants to be ad supported business. Even when their product line has nothing to do with advertisement. NBC will soon be irrelevant , which will help us kick the tv watching habit. Additionally, if it is important that I watch the show, I will program my DVD to record it while I am at the gym; later I can burn it to my I-Pod.

Posted by: Chukwuemeka | August 31, 2007 10:20 PM | Report abuse

Utterly clueless on NBC's part. Apple has got the price per episode close (I think most people probably value it nearer to $1, not $2), but it's still crippled with DRM (so it won't transfer and play on a DVR or PMP).

So, they're already over-charging and over-crippling, and they think the answer is to raise the price and increase the hassle? And the alternative they're competing against is free and unrestricted? Good lord, whose great ideas was this? Does Jeff Zucker, the guy who nearly killed NBC with disastrous programming, now make distribution decisions?

Consumers want a fairly priced, and UNRESTRICTED, product. Offer that in a really convenient format (like, say, the iTunes store) and you'll sell it instead of watching it being given away. Offer anything less and the market will make it's own source. It's pretty obvious that there's a generational cluelessness at work in the big media companies. It's amazing that they would break up with the one partner that "gets it."

The future? Apple, and other clueful organizations, distributing content sourced directly from production studios. Video is following the same path music did--order of magnitude decreases in cost of production annually--so it will be increasingly possible for small artist-operated studios to produce their own content and distribute directly to their audience via online outlets. Lower costs of production will enable lower revenues per episode, but with an overall increase in the number of shows being "aired." Notice how the big networks and media conglomerates don't appear in this future?

Thanks, NBC, for speeding the process along.

Posted by: Anonymous | August 31, 2007 10:29 PM | Report abuse

Apple is sticking up for the consumer here. $4.99 is ridiculous. NBC may think it stood its ground. Instead, it's digging its own grave.

Hulu will fail. All other content delivery platforms will fail. The reason? iTunes will continue to grow internationally along with iPod, iPhone, and AppleTV. It's all about the integrated platform. No one else can deliver this experience. Therefore, nothing will replace iTunes.

The sea change is already past the point of no return. NBC is fearful of Apple's pre-eminent position and I don't blame them. But if they try to get greedy or try to drop iTunes from their digital content delivery system altogether, they are the ones that will be left behind.

Bad move, NBC. And other content providers, take note. Would you prefer to have us pirate or file share your shows instead of us paying a reasonable price for them via our preferred delivery method -- iTunes?


Posted by: lumi | August 31, 2007 11:32 PM | Report abuse

I'll just record Heros and the rest can fall by the wayside.

I do download shows from ITunes. I'm busy and though I keep up with my core favorites I use ITunes to check out other shows. I take them with me when I travel, watch them in dr's office etc.

I can't believe NBC is sooooo stupid.

Posted by: Roxanne | September 1, 2007 12:09 PM | Report abuse

I am 63 and technically savvy. I seldom if ever watch actual television, but, have purchased over 100 TV episodes in the last year so I can watch the few shows in which I am interested. NBC is making a major blunder. I am sure I am not the only person who approaches TV through the iTunes portal. If I can get what I want and ONLY what I WANT, I am willing to pay for it. This truly is video on demand in the purest sense. At some point (probably when downloading is much faster) someone will begin to develop original material for distribution on a regular basis strictly through iTunes and this will be the "swan song" for broadcast television.

Posted by: John in Dallas | September 1, 2007 1:01 PM | Report abuse

I purchased Heroes from iTunes last year but I won't be doing it again this year. There are many ways of getting the series and none of them will involve me giving any money to NBC.

Posted by: Jeb | September 1, 2007 1:06 PM | Report abuse me a break! If they expect to sell as much there as on iTunes, they must be on drugs. NBC is leaving money on the table, and they do not see the writing on the wall. iTunes is and will continue to be the only viable alternative to piracy.

Posted by: RT | September 1, 2007 1:50 PM | Report abuse

"The Office" got a huge audience boost after people started downloading episodes off of iTunes. NBC's attempt to force higher prices off of Apple as a result is a classic case of biting the hand that fed you.

Posted by: neverenoughjam | September 2, 2007 2:27 AM | Report abuse

Well best place to find links these days is

Brilliant site, findtvlinks .com just searches the net for all the tv and movies which have been uploaded by users!

Posted by: Freddo | September 2, 2007 11:04 AM | Report abuse

Over a year ago I moved home and in the process I didn't sign up for cable or Satellite TV. I was tired of cancelled shows mid season - droll advertising - and a packaging system that restricted what channels I could watch shows from.

Now I watch content at home on my big screen, on my commute to work, and on my many hours flying. The shows are ones that I want to watch, at a price that I think is not cheap but fair given the fact I get to choose no adverts, and shows based on meritocracy not channel affiliation.

I also so enjoy starting a show mid season because I have a little extra time one weekend, or the reviews are outstanding.

TV is the thing of the past for pre-recorded content. I can't wait for some start-ups to record their own TV shows and be successful through an iTunes like portal.

We have all this fighting of contracts between Apple and the media moguls. Where is the contract that the likes of FOX should have when we invest our time and money in shows only to have them cancelled mid season? I'm tired of it, and as soon as more people learn about their alternatives they will too. That is what the studios fear the most.

Posted by: Another Watcher | September 2, 2007 6:35 PM | Report abuse

as in many things in life the content creators need the content providers.... granted Apple will most likely continue to do well w/out NBC. for the last year i watched episodes i missed from the OTA networks online @ their own websites w/ minimal commercial breaks on my MacBook or out from it into a Widescreen TV. i guess i'll continue to do that, provided they have anything worth watching.... NBC has of late had nothing but game show/contests masquerading as reality. WHAT!!! that's why i love & mostly choose the cable networks.

Posted by: dkjazz3 | September 2, 2007 7:58 PM | Report abuse



Posted by: | September 3, 2007 12:08 AM | Report abuse

I live abroad, so I often purchase iTunes TV shows (including NBC ones) as it is really the only way for me to watch quality up-to-date American TV. Network websites that stream their shows are blocked outside the USA, so that's unfortunately not an option. Networks probably have no idea how important iTunes is for their overseas market (especially expat Americans with American iTunes accounts).
I'll really miss NBC on iTunes, but I've been moving more towards Showtime's products anyway.

Posted by: Matthew | September 3, 2007 4:25 AM | Report abuse


You said, "My favorite way to watch TV shows I've missed remains ABC's free online streaming (which now comes in high-definition)."

I used to agree, even without the high-def part. But now when I try to access ABC's shows, all I get is:

Our new video player is only available for:

Windows 2000/XP/Vista - Internet Explorer, Firefox

Mac - Firefox, Safari

To watch, please download the appropriate browser.

In other words, ABC no longer cares about Linux Geeks :-(

Posted by: rcjhawk | September 3, 2007 8:31 AM | Report abuse

I don't know what all the fuss is about. If I want to record a show I insert a tape into my VCR, program the VCR for future recording and eventually watch the program. Cost of the tape is $1 which can be used over and over again. Cost of the "download" : nothing.

Posted by: camman2 | September 3, 2007 2:52 PM | Report abuse

This would be a much bigger issues if Apple had figured out a way to get the Itones purchases onto my TV. The Apple TV doesn't count. No one I know owns an Apple TV. They will have to try try again.

Posted by: Ronnie | September 4, 2007 9:43 AM | Report abuse

Matthew, just bounce your internet connection through a US based proxy, and you'll be able to download the American tv shows.

As for NBC, they are still stuck in Old Media Company thinking mode. They think the only way to make money is pack their shows full of ads and control user behavior. Also, ABC is guilty of this to an extent as well. When they deployed their HD streaming last month, you had to download a special Windows only, cripple-ware player to view the content. That's not going to fly long term.

Posted by: Trixie | September 4, 2007 12:37 PM | Report abuse

Look, we are looking at the birth of the world's biggest access channel.

Okay, I know that's a stretch, considering how bad the programming on a lot of cable access channels is...but, like a few people have said before, iTunes potentially has opened up the market for (hopefully quality) content that is neither generated nor controlled by the big four.

Much in the way that a lot of moviemakers now are able to strike deals with best buy and circuit city to get their independent films out there by going straight to DVD, NBC's play of greed should be heralded as the shot heard round the 'net (YouTube notwithstanding).

Ladies and Gentlemen, start your camcorders and warm up your Macs...the revolution WILL be televised...on the internet.

"That's my story and I'm sticking to it"

Posted by: graphixgeek | September 4, 2007 1:54 PM | Report abuse

Here's the comic about NBC second press release:

Posted by: leah | September 5, 2007 8:41 AM | Report abuse

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