NY Times: NBC Will Not Renew ITunes Contract
Apple: iTunes Store To Stop Selling NBC Television Shows
CUPERTINO, California—August 31, 2007—Apple® today announced that it will not be selling NBC television shows for the upcoming television season on its online iTunes® Store (www.itunes.com). The move follows NBC’s decision to not renew its agreement with iTunes after 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. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
“We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”
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. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.
Apple’s counter-strike could be cutting off its nose to spite its face. NBC and Fox just announced their Hulu (excuse me while I ROTF to LMAO) service — but it turns out its beta won’t even begin until October. That leaves NBC’s series suddenly without any sales outlet on the Net.
Even worse: It looks like NBC’s plans to spread around their upcoming pilots has just had a big hole drilled through it. I don’t think we’ll be seeing these in the iTunes Store!
Changing its future for the worst!
For all of these companies that are suddenly withdrawing from the iTunes Store, I recommend reading these two pieces:
Friction and the Consumer Experience [link fixed on 02/11/09]
Making people hop from site to site, service to service, having to remember multiple usernames and passwords is adding friction to the customer experience. Friction is not good. Friction is like a speedbump suddenly appearing on a highway.
Friction is your doom.
Like it or not, the iTunes Store offers a fast, easy, and centralized customer experience. It is to media what Windows is to computing: the hard-fought standard. Where are all the competitors to MS-DOS that were still available in its infancy? Where’s CP/M? Where’s DR-DOS? Where’s AppleDOS? Where are all those other windowing shells that were supposed to compete and drain people away from Windows? Where’s GEOS? Where’s GEM?
Imagine if I had to do something more than hit a button on my remote control to access ABC, NBC, CBS, or any other channel.
This fight is stupid.
For both Apple and for every media company.
And if there is any fight here, it should be for a standard for a marketplace any company can tap into. Just as broadcasting settled on the FCC-mandated NTSC standard for American television, maybe it’s time to develop a standard for online media purchasing.
I can see people from Microsoft reading this and salivating, so let me make this clear right now. Microsoft should have no part in this. They’ve had numerous opportunities to create such a standard and every single one of them has failed — including the Zune. If any company should be at the center of such an effort, it should be Apple.
Apple should turn iTunes into a platform instead of a doorway to a single store.
This would preserve the iTunes Store ease of use and offload media storage, sales, and customer service onto the partner stores. If Universal Music Group thinks it can gouge customers with its variable pricing, hey, let it still have access via iTunes and find out for itself. If NBC thinks it can stiff people with bundled videos no one wants, have at it via the iTunes software portal. Apple should seriously consider changing the iTunes Store into an iTunes Mall.
I don’t have to go into teeny details here about how that would work. Apple is filled with brains who could make this work. It’s a matter of Steve Jobs having the will to do so.
I think this is a chance for Apple to create a true global standard in an area that is only going to increase in importance. It can be the dominant force in ease-of-use media sales. It can bring harmony and unity where now there is none — and where entropy threatens to undermine a crucial element in the Net’s future. And Apple can be at the center of it all.
Did you just read this post? Now click here.