NBC Universal Drops iTunes

An anonymous reader writes "NBC Universal has cancelled its iTunes contract and will withdraw the television shows it currently offers through the service in December, when the current contract expires. This is a huge blow for the service, as NBC is the controlling interest in Apple customer-friendly intellectual properties like The Office, Battlestar Galactica, My Name is Earl and Heroes. From the article: 'The decision to withdraw the content follows disagreements between the two firms. Apple is thought to have rejected NBC's demands for more restrictive DRM and the introduction of flexible pricing. Apple was informed of NBC Universal's decision late last night. The report states that neither Apple nor NBC Universal would comment on the matter, but said they continue to talk, "free of acrimony".'" Hey NBC: I have chosen not to have cable, but want to pay you for Heroes. Guess what my only alternative will be if you pull it from iTunes?

Well, I don't know about other shows

[Kierthos]

But I watched most of Season 1 of Heroes on their official site. Here's hoping Season 2 continues that way.

Re:Your only alternative?

[gozar]

Sorry NBC... I'm too far away from your transmission tower. My suburban HOA won't allow for an antenna that can tune in your signal well enough.

They can't do that [fcc.gov]:

The rule (47 C.F.R. Section 1.4000) has been in effect since October 1996, and it prohibits restrictions that impair the installation, maintenance or use of antennas used to receive video programming. The rule applies to video antennas including direct-to-home satellite dishes that are less than one meter (39.37") in diameter (or of any size in Alaska), TV antennas, and wireless cable antennas. The rule prohibits most restrictions that: (1) unreasonably delay or prevent installation, maintenance or use; (2) unreasonably increase the cost of installation, maintenance or use; or (3) preclude reception of an acceptable quality signal.

Re:Your only alternative?

[kidgenius]

Umm....how about:

D) Get an antenna and view NBC via OTA hi-def?

There are options here, and they aren't that tough if you are really don't want cable, yet you want to watch Heroes.

Accuracy

[samkass]

I know I'm not new here, but I'd just like to say that the article is self-contradictory. NBC is not pulling anything off of iTunes for months at the earliest, and contract negotiations to keep them on the site continue.

In other words, this article can be summarized as "NBC, looking for some leverage in ongoing negotiations with Apple over iTunes, has called reporters to float the idea of pulling out of iTunes altogether."

Re:Well, I don't know about other shows

[teh_commodore]

A lot of broadcast corps have been offering pretty decent quality shows on their site. My wife and I watched all of Heroes s1 online, several episodes of Fox's Stand-Off, Every episode of The Black Donneley's, and my wife watched the whole first season of Ugly Betty. I believe that covers three networks. It's a really nice free thing they offer, and there are fewer commercial interruptions than if you watched it broadcast. With only a VGA cable, I hooked up my Dell laptop to my Samsung TV, and watched the whole thing on a 32" TV instead of a 15" monitor. And please, if you've never utilized the service, don't knock the quality off-hand, because it's actually pretty good. I'm all for fighting the man and what-not, but let's at least be intelligent enough to give credit where credit is due.

Re:Your only alternative?

[reanjr]

Or on XBox Live. They just started putting episodes of Heroes up there last week. Seems NBC already found a new channel to replace iTunes...

Re:Your only alternative?

[amper]

Here's a nice PDF from Uncle Charlie:

http://www.fcc.gov/cgb/consumerfacts/consumerdish. pdf [fcc.gov]

Re:Your only alternative?

[kidgenius]

No, they can't. They may try, but they are prohibited under Federal Law from doing that. I think that Federal Law trumps some stupid little HOA bylaws. I thankfully have an understanding HOA. They know this, and when I went to put up a satellite dish, they told me where they would like it installed so as to be as unobtrusive as possible. But, they knew that if reception could not be achieved from that spot that they would have to deal with it. Fortunately, it worked just fine where they wanted it.

Re:Your only alternative?

[ahoehn]

NBC has only offered selected, generally less popular, primetime shows on its website, not all of them like on ABC. No Office, and I think no Heroes.

I personally think that web-delivered ad-supported tv shows are an excellent way to go. My only beef, (since I work at a regional ad agency), is that I wish they'd geographically target ads so that local advertisers could take advantage of the medium. I mean, really, who doesn't want to be screamed at by Big Bob of Big Bob's Used Car Bonanza?

I have few qualms about torrenting tv shows, but ABC's streaming is done so well that I often choose to watch that instead of downloading a show from that network.

Re:Your only alternative?

[phcrack]

I'm currently based overseas, without access to decent television. Since they don't allow you to watch them online unless you're in the US, iTunes was my only option for watching the shows while still giving back to the people making them. Americans complain and complain about people overseas pirating stuff, but continue to refuse to sell it overseas. I figure, if you don't give someone a way to pay for the stuff you're selling, what right do you have to complain when they don't.

I make things for a living that people might want to pirate, and would feel bad about it if someone was pirating, I shouldn't pirate either. I rent movies I want to see, buy software I want to use, and try to let others know that not paying for these things is stealing. I also don't tell people from other countries that they can't buy my products though.

Here's what Apple says

[gnasher719]

http://www.apple.com/pr/library/2007/08/31itunes.h tml [apple.com]

"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."

Re:Your only alternative?

[Anonymous Coward]

But until 2 weeks or so before the DVDs you could watch all of the episodes on the NBC.com site for free. Yes, they had a few commericals in there, but they were watchable.

Season 2 of Heroes will be on line once it starts. The only reason for buying from iTunes I'm guessing is so you can download it to your system and watch it off line (I've never used itunes personally). iTunes might also have better picture, but for most people wanting to just keep caughtup the on line version will be fine.

There are many other shows available on their website to watch as well. ABC and CBS I believe are both also running some of their shows on line for free.

AMEN!

[BLKMGK]

I TIVO most stuff and skip past the commercials unless they look interesting. If I miss something or learn about a new show after it's started (Flash Gordon, Saving Grace, Burn Notice, Robin Hood all found out about after they started) then I download it and setup a season pass to get the new ones. Yup, Torrent has no commercials but if the studios offered Torrents of these shows WITH commercials in something that wasn't DRM'd then I'd watch them just like I do TIVO. If the commercial sux blip blip blip and if it doesn't or I forget then I see the commercial and ponder the product. I have an aTV too and I'm working to hack it into an HD version of my XBMC'd XBOX - sorry but paying for something I could just as easily have recorded is nutz to me. Put it out there with commercials for free and you've at least got a fighting chance that I'll see the commercial....

Meh, makes too much sense for them to do it!

Retail price would increase to $4.99 per episode

[shmlco]

"This really upsets me that they would do this to their paying customers"

According to Ars [arstechnica.com], the issue is that they want you to pay more. A LOT more. To quote, "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."

So how does $5 a pop sound? At that rate, a typical series would cost over $100 purchased digitally, as opposed to buying the DVDs for $30-$50.

One thing's for sure, if hulu has this kind of idiotic pricing structure, then it's just SURE to be a success...

Apple Drops NBC Universal

[CODiNE]

Looks like Apple is playing hardball too.

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."

From Apple press release. [apple.com]

Re:Your only alternative?

[p7]

I'm not overstating things at all. I'm sorry that you can't get the shows legitimately till years later, but that doesn't give you the right to download it. I live in the US, and am a fan of Dr. Who and a few other BBC shows. I currently don't have access to them, am I downloading them, no because I wouldn't want people ignoring the license or rights of my IP. Soon I am going to be getting rid of my cable and am going to lose access to about 90% of the shows I like watching. I won't be downloading them either. So in my opinion my alternatives are realistic, your stealing is the only remaining option is what I mean by entitlement. Do you feel that people without TV's would be justified in stealing them so they can watch the TV shows they are entitled to? If they can't afford one it is the only realistic option.

For all we know, NBC is working on or has an alternate venue for the shows on the web. Obviously NBC didn't find the current licensing deal with Apple to their liking. Should NBC be forced to bow to Apple, since they are the major online media distributor? My take is no they shouldn't. I also would bet that we will see most of those shows available in some manner online in the near future.

Re:The option everyone's forgetting

[mjboyle]

I'm not sure that math scans... Taking ER as an example from your chart, a 30 second spot is $400,000. Assume 20 minutes of ads (an overestimate, given that show run about 42-43 minutes and some of the ads are for other shows on the same channel), that works out to revenue of $16 million. The same season they got about http://loneswordsman.spaces.live.com/blog/cns!D545 4D646CBAAB6B!198.entry [live.com]12.3 million viewers or about $1.30 per viewer. I believe that the wholesale rate for TV shows http://www.engadget.com/2006/06/19/steve-jobs-figh ting-for-9-99-itunes-movie-downloads/ [engadget.com]is 70%, so if the TV show costs 1.99 to download, 1.393 will go to the studio. Therefore, the studio is making about the same amount of money, possibly a bit more from each viewer who downloads a TV show from iTunes as they make per viewer from advertisers. I'm sure this is not a coincidence. Ad rates are set by number of viewers, so, although I didn't check, I'd expect this to scale to shows with higher or lower viewership, maintaining about the same revenue per viewer. Furthermore, if more and more viewers switch from watching on the buying from iTunes, the decrease in the amount they make from ads will be balanced by more revenue fro downloads. This isn't about maintaining the amount of money they make off of broadcast, it's about increasing it, and, more importantly, increasing their control.

Read This Mr. Obvious!!!!

[BSDetector]

Hey Mr. Obvious:

#1) Where did you see MS anything in the story other than in your infantile musings? and

#2) Microsoft sold its controlling share of MSNBC to NBC Universal almost 2 years ago!

Are all of you cogenital liars or just delusional?

Re:The option everyone's forgetting

[reidconti]

Is this intentionally funny? You do realize how Microsoft screwed their PlaysForSure customers with the Zune, right? Why would you spend a single penny on their media technology, knowing they're likely to do the same thing again?

Can't wait to see NBC's online sales dry up.