NBC: Our Way or the Highway

As far as I can tell, NBC will still allow users to go to their website and watch episodes of all their latest TV programs, but as of Friday, they'll no longer make their episodes available for download on iTunes.

The reason? NBC thought users should pay $4.99 per episode, while Apple insisted $1.99 was the right price.

I admit I've never paid to download a TV show, because most of the ones I would consider watching are also available for free. And I can sit through a grand total of five commercials (even 30-second spots, and even if it's the same doggone commercial, as NBC.com served them last season) for a good TV show that normally takes an hour to watch without a DVR.

I'm inclined to take Apple's side here, though. Adoption rates for television episode downloads aren't such that anyone who desires to make any money has the luxury of increasing the cost of entry to the service, which makes use of a media where it is difficult (if not illegal) to transfer ownership, to a level that exceeds what will be the final cost of the entire season on DVD. (a 15-episode season would run a subscriber about $75, and they wouldn't get the benefit of all the features available on DVD, including the ability to lend it to a friend without lending him your media player).

Now users wanting to watch the latest episode of Heroes will have to go to NBC.com and be served ads if they want to watch their shows (which will be removed before the DVD of the season is released), but if I didn't want online video to succeed so much, I'd consider boycotting any company who put their ads on an NBC.com show.

It just bothers me that instead of figuring out ways to give people what they want, they strive to find ways to force people to watch their 30-second spots. Right now it's limited to five per episode (or at least it was before they changed their web player), but that's probably because they don't figure they could get away with forcing users to watch more. Once they do, if their behavior here is any indication, you can expect them to increase the number you're forced to watch, and you can expect to never have the ability to transport the episodes on your media devices without doing backflips and using tools the industry is continuously trying to thwart.

What's your take? - Cam Beck

P.S. Before deciding to publish this, I tried to find anything NBC has said about it, but my Google search for "NBC PR" came up with Apple's explanation, and I couldn't easily find the PR section for NBC's website. Way to drop the interactive ball again, guys. Let's hope you're better at producing TV shows.

Update: MSNBC (via AP) reports that NBC will sell the ad-free episodes on Amazon's Unbox for $1.99 each. The dispute, NBC Universal claims, stemmed from a disagreement over how much control NBC would have over prepackaged offers and pricing, not single-episode pricing.

Even if true, it seems like such a sad reason to refuse to make a deal. People are willing to pay cash for your product in the form Apple is willing to offer it at a price you say you're comfortable with (and indeed even are happy with when it is over at Amazon). Something tells me we aren't getting the whole story.

Unbox works on PCs or on web-enabled TiVo devices, so Mac users and those who want to watch their videos on their iPods (or burn them to DVD and watch it over at a friend's house) are left out to dry.

Any way I look at it, NBC's decision leaves me scratching my head.

Comments

[Brian]

My take -- poor choice for NBC. At the very least, NBC was making $1.40 on every $1.99 episode, and setting their own wholesale on season sets. So really this boils down to NBC throwing a fit that they don't control their pricing, and greed.

I'll grant that it takes quite a few $1.99 episodes to recoup the cost of producing a TV series, but I'm inclined to think those episodes have long since been paid for by broadcast advertising, etc.

The sheer beauty of having your content in the iTunes store is that you send them a single MPEG-2 file of episodic content (well, and metadata, copy and images), and you never supply anything again. No inventory to manage. No retailer shipping product back to you because it's not selling. Just sales and the long tail.

I think this is worse for NBC than for Apple in the long run. I talked to someone providing content to Amazon for Unbox, and they were seriously unimpressed at the sellthrough with Unbox.

There are still a ton of networks and providers out there to bring content to iTunes (HBO comes to mind), and, imho, NBC is crazy not to fish where the fish are.

[Cam Beck]

Brian - Well said.