NBC says bye to iTunes, hello to piracy and lost revenue
In news that comes just weeks after iTunes' loss of Universal Music Group, NBC has officially canceled its contract with iTunes, citing the need for stricter piracy controls and higher pricing that Apple was unwilling to provide. That said, NBC will still continue to sell its programming on iTunes until its contract runs out in December.
In other words, January will be the month that NBC sees a severe increase in the piracy it's trying to so hard to curb.
Bozos of the month
(Credit: NBC)I'm not quite sure what any of these companies are thinking. First, Universal Music Group steps away from the third-largest music retailer in the world because it thinks iTunes is suffocating it, then NBC walks away to make more money and stop people from stealing its media. But what both companies don't understand is that they need Apple far more than Apple needs them.
Let me paint a scenario for you of what happens as soon as NBC pulls its programming off iTunes.
First, the company will tout its new video service, Hulu, as the savior for this generation. After that corporate-speak is completed, it will begin telling the world about the issues with iTunes in an attempt to downplay its importance. First, NBC will use the line, "Well gee, shouldn't we be allowed to make some money too?" And after that doesn't work, the company will resort to the classic, "Well, look at all of these pirates! It's the actors who are getting hurt by this. Think of them!"
After this new PR campaign is complete, NBC executives--obviously without any grasp on reality--will sit there and expect their assistants to bring them financial numbers that show exploding growth in programming sales. With cigars firmly in place, the big shots will open up the revenue reports and come to one damning conclusion: revenue from programming has gone down, yet piracy has increased tenfold.
Meanwhile, back in Cupertino, Steve Jobs and company are left counting their iTunes revenue with nary a blink at the modicum of lost revenue they experienced from the NBC move. Give it about six months and NBC will be calling back with an olive branch in hand, hoping to get back onto iTunes. Only this time, NBC will have an even worse agreement with Apple.
How many times do I have to say it until someone at NBC finally hears me? There is no way you can benefit from leaving iTunes. People who would normally have purchased shows like The Office are now going to their favorite torrent site and downloading each episode to their hearts' content. From there, they'll be adding those illegally downloaded songs directly to their iTunes account and will enjoy them on their Apple TV or iPod.
It's about time that NBC, Universal and the rest of these bozos realize that without iTunes, their online presence is nil. Sure, Universal can sell its music to Wal-Mart or the Zune Marketplace and do um, fine, but is it really willing to lose all of the revenue iTunes has provided for it? I guarantee it'll be back. Right now, Universal is a lone duck on an empty pond--it's in for trouble.
But more than anything, this NBC move really baffles me. If you want to stop piracy of your programming, why would you take it off legitimate services? Am I missing something here? Is it the company's greed or belief that it can go it alone? Either way, it's a dumb move.
Sad as it is, there's no way to fully eliminate piracy. Whether you want to believe it or not, the best way to stop piracy is to give people most of what they want: no DRM, an affordable price and ease of purchase. NBC wants stronger DRM and higher prices and it's making its product less available. Sounds like a recipe for trouble.
NBC is in for a rude awakening. Because it currently can not see through its greed and short-sightedness, its goals will be trumped by its biggest fear.
Get ready, NBC, because a flurry of piracy, lost revenue and eventual Steve Jobs genuflection is on your 2008 calendar.
Nice move.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
=)
reason iTunes is winning. Its because you wont give anyone else
the same deal. I mean, when they figured out that there even
more strict DRM on other stores weren't working at all, what
makes them think that hiking it up on iTunes would work? Steve
Jobs isn't an idiot about this stuff. He knows what will sell and
what wont and you'd think that the last 4 years would have
proved that to the studios but nooooo they are to concerned
with getting every single penny out of us that they could care
less. Yea NBC, go a head, pull out of iTunes and see what
happens to your online revenue and piracy rates...I dare you.
I usually dont post a response to these articles... However, after
watching 'the Bronx is Burning', from ESPN on ABC's STUPID on
line HD Viewer, having to sit through commercials, not being
able to see it on my iTV or my iPhone, it will be the last thing I
watch from ABC or anyone else doing this format. I want to pay
the $1.99 and have the freedom of watching my shows when I
want to, where I want to. I do NOT pirate anything. They just
took a paying customer and slapped me in the face.
However, worry not Universal and NBC. I have no desire to steal you wares either. Just count me as one potential lost sale.
Since 2005, it were sales on iTunes that woke up NBC executives to the fact that The Office should be renewed. Voilą. Now it's pretty much the only show people watch on the network, outside of Heroes.
Just like others have said, I won't follow NBC to another service. I'll just continue to DVR the shows and watch them over and over. Comcast, for as much as I despise them, can screw NBC out of lost revenue with my $5.95 a month going to them rather than my $29.99 for a season pass on iTunes.
Congratulations NBC, once again proving why you're somehow last place among the alphabet networks.
They are going to end up in Zune land. Of course everyone has heard of MS-NBC. It makes no sense for them to remain with what is basically a competitor.
I would leave iTunes too. Though nothing is wrong with iTunes at all. Just a business thing.
customer. I'll happily take my money and buy content from other
networks on iTunes. Buh bye, NBC!
- Typical of poorly managed companies
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by ppgreat
August 31, 2007 8:15 AM PDT
- NBC is where in the ratings?
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Reply to this comment
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1 | 2 | 3 | 4 | Next 10 Comments >>But this move is typical of poorly managed companies. You get a
good thing going, you get a little cocky, you shoot yourself in
the foot (which is bad since the foot is usually in your mouth).
Typical greedy maneuvering by overpaid, underqualified
executives who don't give a rat's patoot about their customers,
let alone the people who supply them with their product.
They deserve to be pirated for this. A massive letter and email
campaign from legitimate downloaders and content providers
would turn this around quickly. (Nudge, nudge, wink, wink.)