NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes.
The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday, according to a person familiar with the matter who asked for anonymity because negotiations between the companies are confidential.
So basically, NBC wanted iTunes to raise their prices to increase NBC Universal's profit margins. Apple said no. NBC threatens to go to a startup website that desperately wants to be the next Youtube. Apple says Bye.
But wait there's more:
The iTunes service has sold songs for 99 cents each since its beginning four years ago, except for the recent introduction of songs without copy protection. Episodes of television shows sell for $1.99, with movies priced at $9.99.
NBC Universal and other companies say they want to increase prices by packaging content— say an episode of “The Office” with the movie “The 40- Year-Old Virgin,” because they both star the comedian Steve Carell.
This is the dumbest idea I've heard since Bush's decision to go to Iraq. Making people pay for a random episode of "The Office" just to see a movie is beyond stupid. Giving it to people for free is one thing. But adding on the cost is something else entirely. People who buy "The Office" will simply buy it.
Look NBC Universal think they have the upper hand. But one of two things will happen once NBC pulls out: 1. People WILL increase the number of shows they get through Torrents. People are not going to another website to pay more for the same thing they got on iTunes. 2. NBC will put it online for free like ABC/Disney for a short time and get an online ad sponsor.
Besides, there are smaller media companies who would kill to have their content on iTunes. This makes room for them.
In retail, no one screws with Wal-Mart. Why? Because there is not a close second in sales volume worldwide. Media companies think they can push Apple around with iTunes. The problem: there is no rival. You could sink millions into making a rival that has a very good chance at failure. How many people do you see walking around with a Zune (that's what I thought).
Rant over, sorry about the lack of posting. Ear infection sidelined me for a few days.
No comments:
Post a Comment