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NBC denies Apple's claims

2 September 2007 5:44 by James "Dela" Delahunty | 8 comments

NBC Universal recently announced that it would be removing its content from Apple Inc.'s iTunes download store in December after failing to reach an agreement about DRM and variable pricing. Afterwards, Apple put out a press release in which it stated that NBC was asking for double the wholesale price, which would in turn make NBC's videos about $4.99 each for iTunes customers. Apple also decided that the content will be removed this month and not in December.

However, Cory Shields, EVP Communications of NBC Universal, has contradicted Apple's press release in a statement. "We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers," he said.

He also stated that NBC will in fact keep its shows on iTunes until December, which is odd since it appears NBC is making Apple's decision. Of course, NBC may have some protection against being dropped from the store before it wants to under contract. Shields also took a shot at Apple's infamous "iTunes-iPod" tie, linking it with Apple's pricing strategy.

"It is clear that Apple's retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying," he said. Apple has indicated in the past that its "one price fits them all" strategy is to aid the evolution of the young market and make the transition to this form of buying more attractive to consumers.

Source:
Ars Technica

Permalink to this article

Portable media players aren't ready for most consumers yet (23 September 2007)

NBC will offer downloadable TV shows (20 September 2007)

CBS is happy to keep selling television shows through iTunes (18 September 2007)

News Corp sticking with iTunes (11 September 2007)

Apple wants to lower TV show prices (8 September 2007)

Apple opens Wi-Fi tunes store (5 September 2007)

NBC TV shows to be available on Amazon's Unbox (4 September 2007)

Update: Apple talks out about NBC fallout (31 August 2007)

NBC abandons iTunes? (31 August 2007)

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ZippyDSM (AfterDawn Addict) 2 September 2007 8:35
Spin control! [ + quote]
duckNrun (Member) 2 September 2007 8:38
"We never asked to double the wholesale price for our TV shows" Well this could be a truth hidden within a misrepresntation or outright lie... For starters the $4.99 was a RETAIL price: what consumers would pay apple not what apple would pay NBC. So if they said to apple that they wanted pricing to be $4.99 their statement would be factual. Another scenario could be that they didn't say they wanted ALL of their shows to be that price, perhaps only SOME of their shows (read: new fall, first run shows). This would be a misrepresentation on NBC's part since they would, in fact, want some shows to hit this price. Maybe they just told apple they wanted pricing "up to $4.99"; again this would still make apple's statement true in regards to some of their offerings. Even though I am no fan of iTunes or apple I find it difficult to think that they would just throw out a number that had not been discussed. The quote from the previous article here on AD says: During a press release this afternoon, Apple stated that NBC asked for a huge increase in the per-episode price of their TV shows. According to Apple, NBC asked to have the price raised to $4.99 per episode, compared to the current $1.99 per episode. All other major broadcasters are signed for the next TV season at $1.99 per episode. Also a different article here quoting the NY Times only talks about a 'pricing scheme' but does not list a price. From the above it is obvious that the $4.99 is certainly a RETAIL price not a wholesale price, so therefore NBC can make the statement they did in this article and still be factually correct even though they are probably still being dishonest in regards to the price consumers would end up paying. Again, as I always state, even at $1.99 an episode the price is too high for me to be interested. A season pass of the shows I watch are oftentimes priced around what I will be able to get the DVD's at once they are released at the end of the season. I guess some people are willing to pay the DVD price for a DRM'd reduced quality version to see it now. A perfect example of the need for instant gratification... or the lack of a DVR or a friend who watched the same show. lol [ + quote]
duckNrun (Member) 2 September 2007 8:45
btw: my friends and I normally keep our current episodes on file until we know that the others have them. Friendship has saved us from missing shows at times due to pc issues (including not having it turned on the night of the episode) BUT if pricing was about 99 cents for an episode this would seem way more reasonable to me and perhaps I would consider using iTunes. And if the music was 30-40 cents, 320 bitrate and no drm (like Allofmp3.com or their current incarnation called Alltunes) I would buy there instead of where I currently do. [ + quote]
ZippyDSM (AfterDawn Addict) 2 September 2007 8:48
*Originally posted by duckNrun:* "We never asked to double the wholesale price for our TV shows" Well this could be a truth hidden within a misrepresntation or outright lie... For starters the $4.99 was a RETAIL price: what consumers would pay apple not what apple would pay NBC. So if they said to apple that they wanted pricing to be $4.99 their statement would be factual. Another scenario could be that they didn't say they wanted ALL of their shows to be that price, perhaps only SOME of their shows (read: new fall, first run shows). This would be a misrepresentation on NBC's part since they would, in fact, want some shows to hit this price. Maybe they just told apple they wanted pricing "up to $4.99"; again this would still make apple's statement true in regards to some of their offerings. Even though I am no fan of iTunes or apple I find it difficult to think that they would just throw out a number that had not been discussed. The quote from the previous article here on AD says: During a press release this afternoon, Apple stated that NBC asked for a huge increase in the per-episode price of their TV shows. According to Apple, NBC asked to have the price raised to $4.99 per episode, compared to the current $1.99 per episode. All other major broadcasters are signed for the next TV season at $1.99 per episode. Also a different article here quoting the NY Times only talks about a 'pricing scheme' but does not list a price. From the above it is obvious that the $4.99 is certainly a RETAIL price not a wholesale price, so therefore NBC can make the statement they did in this article and still be factually correct even though they are probably still being dishonest in regards to the price consumers would end up paying. Again, as I always state, even at $1.99 an episode the price is too high for me to be interested. A season pass of the shows I watch are oftentimes priced around what I will be able to get the DVD's at once they are released at the end of the season. I guess some people are willing to pay the DVD price for a DRM'd reduced quality version to see it now. A perfect example of the need for instant gratification... or the lack of a DVR or a friend who watched the same show. lol wow! [ + quote]
ZippyDSM (AfterDawn Addict) 2 September 2007 8:52
*Originally posted by duckNrun:* btw: my friends and I normally keep our current episodes on file until we know that the others have them. Friendship has saved us from missing shows at times due to pc issues (including not having it turned on the night of the episode) BUT if pricing was about 99 cents for an episode this would seem way more reasonable to me and perhaps I would consider using iTunes. And if the music was 30-40 cents, 320 bitrate and no drm (like Allofmp3.com or their current incarnation called Alltunes) I would buy there instead of where I currently do. its kinda silly they are holding to high prices unlike boxed items that have to be put together shipped and sold, digi distro only requirement is server fees. If they would lower the price they would sale more so they would at least look good(better rep) by breaking even or even sale more but holding to high prices jsut makes people ignore them. [ + quote]
Unfocused (Junior Member) 2 September 2007 12:41
*Quote:* more attractive for consumers More money (out of pocket) is not more attractive to me. Maybe I'm not the right kind of consumer. Try the Sony "Steve" model of consumer... [ + quote]
sciafb (Newbie) 2 September 2007 12:53
I see a spin zone creeping around...Just be thankful to your God's and the world that so far, Apple doesn't regulate your gas prices. One size fits all... LOL yeah ok... Can you say only SUVs allowed at the pump? Its cracking me up [ + quote]
borhan9 (AfterDawn Addict) 10 September 2007 14:28
*Originally posted by ZIppyDSM:* Spin control! Ditto. [ + quote]