NBC Chief Slamming Apple

On the heels of the beta of NBC's and News Corp.'s less-than-killer Hulu music store, NBC's chief Jeff Zucker is speaking out and saying the darnedest things. First, news.com reports, with derision, that Zucker demanded a cut of Apple's iPod revenue. That'll sure happen. Next, AppleInsider caught Zucker urging colleagues to take a stand against Apple's iTunes, charging that the digital download service was undermining the ability of traditional media companies to set profitable rates for their content online.

hehehe

[rastoboy29 (807168)]

Go ahead, scream motherfucker, for all the good it'll do you!

Hey Zucker, go $#!^ in your own hat.

[BWJones (18351)]

Ah... Hey Zucker, go shit in your own hat.

No, seriously. You want a cut of iPod revenues? Do you make hardware? Do you demand a cut of the manufacturers who produce DVD players? Do you demand a cut of the Internet carriers? Come on now. How about sticking to content creation and paying good writers to create quality content?

Re:Hey Zucker, go $#!^ in your own hat.

[camperslo (704715)]

They should go after those TV manufacturers.

How dare they make money on something displaying content they don't produce!

In over a year of getting NBC via off-air digital, I just saw my second HD movie.
They were throwing large promo banners for another Universal movie right on top of the one I was watching. I'd planned to go see the advertised movie, but I won't now. They really seem to be trying to piss people off.
About 18 minutes an hour of ads, double what it was in the 60's. And they don't know why people are tuning out.

Try leaving feedback on the NBC website sometime. They want so much info it's obvious they plan to spam you or sell it to someone who will.

They're about as pathetic as the FEMA press conference with FEMA employees posing as reporters.

Re:Hey Zucker, go $#!^ in your own hat.

[works (995530)]

I love the logic in that. If these were the car and oil companies, Shell would be seeking a free revenue stream from Ford because, god damnit, their cars run on Shell's content. Albeit that Shell has already been paid for that content, but anyways. WE WANT MORE MONEY, GIVE IT TO USSSSS!

Some cleanup is needed in the high-up of media companies, how can these asshats even remotely expect to run a profitable distribution system in the near future.

Re:Hey Zucker, go $#!^ in your own hat.

[asc99c (938635)]

People buy iPods because they're a nice bit of easy to use hardware. Apple also created a nice bit of easy to use software for buying content. The hardware is at a good cost that people are happy to pay and the software is free. Apple's profit margins are testament to the fact that most people are happy to pay sensible prices when they are getting what they want.

Meanwhile, the media companies have invested absolutely zero money and effort into providing their content in a form desired by consumers. While I like the iPod, I'm not expecting to always want one, or willing to buy any media that will only play on an iPod. That has ruled me out of buying anything from iTunes (until the DRM free stuff which is now out). I've got used to the hassle of ripping CDs now, but it's not an ideal solution. This is entirely the media companies fault.

I'm happy for Apple to profit - the media companies need to look at their own actions.

Re:Yeah, except iTunes != iPod

[PingSpike (947548)]

Thats really the rub in all this though isn't it? None of them wanted to take the alternate distribution systems seriously, or invest any of their own money into one. But some one else did, And it worked well enough to become 'the standard'. And now they have the market and boo hoo! Poor NBC was to cowardly to expand outside their dinosaur business model and got left behind! So they're going to take their ball and go home. Which, might be a smart move if their ball wasn't deflated with gum stuck on it, and there weren't plenty of other kids with balls too.

Re:Hey Zucker, go $#!^ in your own hat.

[ChrisA90278 (905188)]

"The problem with NBC is that they drive shows into the ground. They're doing it with Deal or No Deal and Law & Order. They did it with Dateline before."

You don't understand how TV works. Some smart TV exec long ago noticed that viewers decide IN THIS ORDER (1) "I want to watch TV", (2) "What's on?" So because they operate in this order all you need is to have the show that sucks the least. They have already decided to watch something. it does not need to be good. To make money you want to spend the smallest amount of money and suck the least do that and you can get rich.

Re:Hey Zucker, go $#!^ in your own hat.

[Danse (1026)]

You don't understand how TV works. Some smart TV exec long ago noticed that viewers decide IN THIS ORDER (1) "I want to watch TV", (2) "What's on?" So because they operate in this order all you need is to have the show that sucks the least.

That's how TV used to work. Now that we have DVRs that can record and store a hundred hours or more of programming, I simply set it to record the best shows and then watch them whenever I feel like watching TV. As this paradigm takes hold more and more, the quality of the shows will matter more and more.

Happened before

[R15I23D05D14Y (1127061)]

They are trying to promote torrent use, by getting rid of legal alternatives. First make it to expensive, and then watch a black market form. It's happened before :(

media execs try to kill the Golden Goose,

[Scudsucker (17617)]

news at 11. Remember when they wanted to raise album prices to $20-$25 because at $15 an album, they could only afford to buy Gulfstream 3's instead of Gulfstream 4's?

Still stuck in the past..

[arthur5005 (608816)]

I just wrote quite the comment on the previous story on HULU, of what I think about the traditional Media Industry: my view [slashdot.org]

it's complete rhetoric, but I believe networks like NBC have lost their usefulness in light of real choice based network (ie internet).

The true face of media industry.

[rolfc (842110)]

He is just showing the world that they are building their revenues on monopoly, and that they do not like competition, as it has the tendency to lower margins. This is the behaviour that our politicians are protecting with new privacyinvading laws and software patents.

You know you're doing something right

[wickerprints (1094741)]

...when the movie/music industry execs get their panties up in a wad and behave like crybabies, insisting that they "deserve" a cut of profits on hardware sales. Each successive generation of corporate big shots is increasingly afflicted with the seemingly unstoppable disease that is called self-entitlement. "I'm going to cut in line because I'm busy and can't wait." "I'm going to swerve across 4 lanes of traffic while talking on my phone because I'm more important than everyone else." "That money is mine because I say it is."

As children, these folks were the ones who stood alone on the playground at recess, holding the ball, because for all intents and purposes, they believed the entire world belonged to them. And they haven't grown up since then. The only reason why they've gotten as far as they have in life is because their limitless greed and egotism is repeatedly mistaken for ambition and confidence. The sad truth is that they only have as much power as others are willing to concede to them, and so their existence is more a reflection of the inability of our society to stand up and refuse to reward such psychopathy.

a little late

[rucs_hack (784150)]

Y'know, perhaps if they'd spent the last seven years concentrating on monetizing the net for media distribution instead of sinking millions into lawyers and DRM systems they might actually have beaten Apple to it.

The simple fact is Apple stepped into what was in effect an empty playing field while everyone else was still arguing over lockers in the changing room.

To be fair to traditional media companies...

[MojoRilla (591502)]

NBC Universal chief executive Jeff Zucker on Sunday urged colleagues to take a stand against Apple's iTunes, charging that the digital download service was undermining the ability of traditional media companies to set profitable rates for their content online.

To be fair to traditional media companies, blow and hookers cost a lot of money.

Apple isn't his problem

[femto (459605)]

Apple isn't the cause of his woes. His real problem is that the Internet and the associated competition are driving the cost of his product towards the incremental cost of production, approximately zero. Artificial monopolistic barriers, such as intellectual property, are no match for the tsunami of the market.

Really worried about losing his stranglehold

[antifoidulus (807088)]

he sees what is happening to the RIAA and is scared. Labels are really no longer necessary for a large number of bands to get their music out, with digital distribution, significantly lower production costs etc. And a lot of bands are dropping their labels as fast as they can. The reason the RIAA hates iTunes is that iTunes isn't controlled by them thus has no qualms about selling independent content. They want to launch their own service that only has bands signed by them to try to force bands to stay signed, but its just not going to happen.

NBC is worried about following in their footsteps. While the bar for TV shows is a bit higher, its certainly not out of reach. For instance, how much would it really cost a group of independent people to make the next Seinfeld? Not a lot, esp. now that good video editing tools are pretty cheap(if not free in some cases). Look at how "It's Always Sunny in Philadelphia" started, the pilot episode cost them less than $100 to make. Imagine if they promoted that on iTunes instead of selling it to a network? They probably could have got enough money to continue to make more episodes and live comfortably. NBC sees its own irrelevance and is doing everything it can to try to stay relevant, but long term its just not going to happen.

Re:Really worried about losing his stranglehold

[Gadzinka (256729)]

While the bar for TV shows is a bit higher, its certainly not out of reach.

It's already happening: Sanctuary [sanctuaryforall.com], starring and produced by Amanda Tapping.

Robert

"Destroyed the Music Business?" WTF??! OMG Ponies!

[MichaelCrawford (610140)]

And I blockquote [appleinsider.com]:

"We know that Apple has destroyed the music business -- in terms of pricing -- and if we don't take control, they'll do the same thing on the video side," Zucker said at a breakfast hosted by Syracuse's Newhouse School of Communications.

How have they destroyed the music business? Everywhere I go, especially when I ride public transit, I see people listening to iPods. The few without iPods are mostly listening to some other brand of player. While the RIAA member companies may complain of lost revenues due to filesharing, I still don't see any former record industry execs selling apples (the edible kind) on the street. It seems to me the music business is doing just fine, thank you very much.

Apple pays the record labels for every download they sell. If they're not paying them enough, the labels have the right to take their business elsewhere but (except for NBC) they don't, so by definition they're making enough money.

The key to understanding his complaint is his phrase "in terms of pricing". What that means is that the labels can no longer monopolistically control the price of recordings any more.

And I think this is a good thing, good for the fans, and good for the people who really deserve to benefit from it: the musicians.

I think such a loss of control is the reason the labels are so opposed to Internet radio: because everyone and his dog can run a streaming radio station from their home, Internet radio takes away from the big labels the ability to decide who the big stars are going to be. Payola just doesn't work anymore when fans have a choice of thousands of streaming music stations to listen to at every computer.

The result of this is that I've noticed artists who were first made popular at places like Radio Paradise [radioparadise.com] getting airplay on traditional broadcast stations. And I can't remember the last time I listened to a ClearChannel station.

Re:"Destroyed the Music Business?" WTF??! OMG Poni

[jrumney (197329)]

charging that the digital download service was undermining the ability of traditional media companies to set profitable rates for their content online

Basically, in other words his statement reads: Competition undermines the ability of the media cartel to engage in price-fixing. Over the last 150 years, America's love of the free market has made America into the most powerful economy on earth. Now the media cartel wants to drag us into the 19th century, and up to now, our politicians are doing their best to help them for the most part.

I paid 99 cents for a comcast ppv NBC show

[weave (48069)]

I got lazy last week and just paid the 99 cents to watch an episode of The Office that I missed on Comcast's "On Demand" service.

IT HAD COMMERCIAL INTERRUPTIONS

At each normal commercial point they showed a 30 second ad for some NBC show.

Never again. I was steaming.

Re:I paid 99 cents for a comcast ppv NBC show

[Professor_UNIX (867045)]

If they don't include some kind of commercial interruption it screws up the flow of the show. After a witty comeback or cliffhanger the show needs to break to give the viewer time to process what they've seen. It's artistic integrity we're dealing with here people. That's why we need to preserve the commercials in their entirety whenever possible.

Eat your own dogfood, Zucker!

[joel.neely (165789)]

Zucker whines

that the digital download service was undermining the ability of traditional media companies to set profitable rates for their content online

but unfortunately (for him and his ilk), he's fighting against both the inevitability of technological change and the just rewards (poetic justice, karma, payback, what-goes-around-comes-around, ... choose your favorite term) of his own example.

As an amateur calligrapher with family members who are performers, I can confidently assert that:

• the invention of the printing press undermined the ability of traditional scribes to set profitable rates for their content (handwritten books);
• the automobile industry undermined the ability of traditional blacksmiths to set profitable rates for their content (horseshoes);
• the recording industry undermined the ability of traditional (community-based) musicians to set profitable rates for their content;
• television networks (undoubtedly obsessed with the profit margins of cheap "reality" shows) are undermining the ability of traditional actors and musicians to set profitable rates for their content (performances).

Let's see NBC sharing a cut of their profits with a health insurance fund for performers. Then maybe I'll start listening to anything he has to say about being on the receiving end of a revenue-sharing proposal. Maybe.

Re:Cut of iPod revenue...

[calcapt (975466)]

I don't think that makes any sense at all. I'd wager that the iPhone is getting AT&T a significant number of contracts; AT&T is not helping Apple sell iPhones. In actuality, it's probably making the iPhone less appealing to consumers. Based on that, it makes sense that Apple gets a cut of AT&T's revenue.

Likewise, NBC is not helping Apple sell iPods/iPhones with their content. Ask anyone who owns an iPod/iPhone; NONE will tell you that they got it to watch officially sanctioned NBC/big time media corporation content on their devices. Most of them can get their media through other means (and these means are more likely than not illegal). If anything, Apple is doing these companies a favor by presenting the media in a highly accessible/available/cheap format for the more conscientious consumer. If anything, Apple is helping them sell content that would otherwise be pirated.

Now, it can be argued that the conscientious are provided more incentive to buy an Apple media device with the availability of officially sanctioned content. But I highly doubt that the content would draw significant numbers to warrant Apple giving up revenue. I feel that having video playback capability in the media players is enough to draw customers, even without the availability of actual content, especially when content can be user generated.

Re:Content industry = criminal price fixing cartel

[Registered Coward v2 (447531)]

At least in my country, saying "lets all get together to drive this guy out of business" is criminal, plain and simple. I hope these comments expose the "content industry" for the illegal price-fixing cartel it is. I also hope Steve laughs himself to sleep.

Except that's not what he did. NBC's explained why they left iTunes and how they think the content sales model should be structured. Other companies are free to follow their lead or ignore it; most will probably sit on the side lines and watch how this plays out. If Apple wins they will stay put; if NBC builds a viable and profitable product they will copy it.

The key issues are:
1) How bad does Apple need the content to sell iPods? As a hardware company they seem to view the content as a tool to drive profitable hardware sales and want it to be as cheap as possible to lock people into their hardware. OTOH, they are not stupid and if they can raise prices without significantly impacting sales then probably would do so.

2) How bad does NBC need the iPods to drive content sales? Given they can distribute content in iPod compatible formats independent of Apple not being on iTunes doesn't seem to be that much of an issue; but that means they are at Apple's mercy for compatibility. Apple could "break" something in an iTunes upgrade that makes it impossible to load non-iTunes DRM content onto an iPod, just as they changed the way video out works so that devices need new electronics to still work with iPods (a strange move given how neat the Philip's DVD / iPod player combo is).

3) What level of pricing are consumers willing to pay? NBC could, for example, develop a tiered pricing model - free for ad laden content up to a premium price for an ad free version. In addition, they could do a bundle where the original purchaser of the DVD gets online content as well, such as additional scenes or an iPod ready version of the movie in an attempt to limit the value of used DVDs in the resale market.

In the end, it is not unusual this rift occurred - both sides want to maximize their slice of what the consumer wants to pay. So far Apple has done that better than the content providers; now that the market has matured the content providers will start flexing their muscle and trying to get a bigger slice of the pie.

Personally, I think we will see a resurgence of the subscription based model; with a slightly different look. Consider a content provider / MS / Blockbuster / Tivo alliance - MS produces a player OS (and hardware in conjunction with other manufacturers) with strong DRM; Blockbuster expands it's online offerings to include a subscription to d/l content as well as keeps the DVD by mail/ return to store get a new movie model, Tivo provides the set top box to play d/l content on the TV and the content providers provide content. Getting everyone to play nice will be a challenge but the pieces are already there.

Blockbuster already has the content via subscription model with their Blockbuster Online operation; TIVO has the pieces for d/l and storing content for TV viewing; and MS makes cell phone OS's so they are familiar with the loss leader hardware to sell services model.

The question is will Apple do this with the content providers or will someone else?