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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.
Go ahead, scream motherfucker, for all the good it'll do you!
expandfairuse.org
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?
Visit Jonesblog and say hello.
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 :(
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?
I just wrote quite the comment on the previous story on HULU, of what I think about the traditional Media Industry: my view
it's complete rhetoric, but I believe networks like NBC have lost their usefulness in light of real choice based network (ie internet).
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.
...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.
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.
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.
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.
Monstar L
Is that the pricing models (especially the 99c per song) take away the media corps ability to use price as a marketing tool and a way to get consumers to buy the content the media corps what them to buy (instead of what they really want to buy)
I'm that kind of idiot. I'd been watching Battlestar Galactica via iTunes -- personally, I don't mind paying a reasonable amount for content and $2 for an episode seemed reasonable to me. However, it is obvious that NBC is not interested in my money at all. Fuck NBC. It's easy.
What changed under Obama? Nothing Good
http://greenobyl.com/ please.... think of the children!!
Apple pays the record labels for every download they sell. If they're not paying them enough, the labels have the right to take their business elsewhere but (except for NBC) they don't, so by definition they're making enough money.
The key to understanding his complaint is his phrase "in terms of pricing". What that means is that the labels can no longer monopolistically control the price of recordings any more.
And I think this is a good thing, good for the fans, and good for the people who really deserve to benefit from it: the musicians.
I think such a loss of control is the reason the labels are so opposed to Internet radio: because everyone and his dog can run a streaming radio station from their home, Internet radio takes away from the big labels the ability to decide who the big stars are going to be. Payola just doesn't work anymore when fans have a choice of thousands of streaming music stations to listen to at every computer.
The result of this is that I've noticed artists who were first made popular at places like Radio Paradise getting airplay on traditional broadcast stations. And I can't remember the last time I listened to a ClearChannel station.
Request your free CD of my piano music.
This is what i don't get. The concept of MP3s has been around for years, long before Apple decided to dip it's toe in the water. How much warning did the record companies needd that this was going to happen?
... .atrac which only works with their hardware and so never took off.
/. discussions but in this case, hey, they deserve everything thats coming to them.
What should have happened was this
1)Record companies seen this coming.
2)They should have developed a file format of their own and licensed it to Apple and M$ and Zen and iRiver. It might have DRM, it might not. As it would work with all the players out there it doesn't really matter. This is in contrast to Sony and
3)Come up with their own on-line music store. Well, duh! One between them all or one each. If you don't have to pay the cd store or Apple then its more money for you.
4)Profit.
As it is all they can do is stand there and watch as everyone elae has a slice of their pie. I am normally pro record company in
I have excellent Karma and I am not afraid to Troll it.
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.
An appropriate Halloween metaphor for the media middleman industry.
You media conglomerate networks and telecom provider companies don't seem to get it. We (the viewers) want you (the companies in control of the wires and the infrastructure) to simply deliver to us what we like. Without a hassle. That means that until I can get my Bill Maher every Friday night, until I can grab my Jon Stewart and Bear Grylls and Stephen Colbert and Ellen Degeneres and Charlie Rose and Bill Moyers and Alton Brown and Mike Rowe and Keith Olbermann, on demand, by paying something to you for it, I'll get what I want for free, via torrents or video blogs or other means.
As it stands right now, I would have to subscribe to a cable company's entire digital cable lineup to get all of these stations, and I'd be subsidizing Fox News, CNN, ABC, CBS, Home Shopping Network, Lifetime, Hallmark, and who knows what other garbage.
I'm not doing that anymore. I've nearly convinced my mom to drop her cable along with me. That's $55 something per month each, $110 * 12 = $1320 per year, we're paying for 100 ad-drenched channels, most of which we never watch anyway. Do you see how useless you've become in the internet age? Wake up and fix your problems, or you'll be gone in less than a decade.
it's a blue bright blue Saturday hey hey
Sheesh, evil *and* a jerk. -- Jade
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.
...where we have COMPETITIVE markets, not fixed ones. Seriously - music companies seem to think that they can just demand that no one compete with them, and get away with it. If their costs for media production are so high that they can't make a profit at the same rates Apple can, perhaps it is they who need to look at their production costs. Obviously, if Apple weren't making a profit out of the iTunes Store it wouldn't continue to exist. The networks and labels need to realize that they have to adapt to the market, because the market isn't something to which they can say "jump" and have it ask "how high?"
It would also be trivial to post it in formats compatible with the iPod.
What format that supports DRM do you propose? If you want DRM, I think Apple has the strings on that one. It's either iTunes or no DRM.
The truth shall set you free!
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.
"unable to set profitable rates" = "unable to rip everyone off anymore"
grunka-lunka-dunkity-dahfitable,
we don't care if your service is profitable!
stuff |
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?
I'm a consultant - I convert gibberish into cash-flow.
How have they destroyed the music business? Everywhere I go, especially when I ride public transit, I see people listening to iPods.
They haven't destroyed the music business (yet), but there's a lot of ambiguity about what's on those iPods. Less than 4% of the content was sold by iTunes, something like an average of 20 tracks per iPod were sold. We don't know how much of the rest was legally obtained or not. My sister builds her collection by borrowing CDs from the library.
Am I the only one who thinks that $1.99 per ep is too much? At that rate you might as well buy the box set, then at least you get a decent resolution and you can always re-encode it to fit the ipod later.
Honestly, these hippies and their money, give it to me if you're having problems spending it.
Someday, I'll have a real sig.
Err... Borrowed music (from a library, from friends, off the airwaves) are how a lot of people have been getting music for decades.
In the early 80s I used to occasionally make mix tapes for friends overseas so they could hear what was new in the U.S. I don't know if this is legal. Then again, George W. Bush stated on the record that he received a mix tape from one of his daughters, and he hasn't been sued yet. My thought is that this falls under fair use.
Libraries are great resources for all types of media. If I end up with an extra copy of a music CD, or if I upgrade a VHS tape to a DVD, I always give the old copy to the local library.
My dad has several hundred music CDs, which he is quickly converting to mp3 to put on his iPod. I can pretty much guarantee that none of his music is available on iTunes, as much of it was brought overseas and is in another language, and the stuff he bought in the U.S. is limited distribution stuff not from any of the big labels.
So, as two data points, I rip my own CDs and CDs I borrow from the library or friends under "fair use", while my dad rips his extensive CD collection of stuff not available on iTunes.
Help! I'm a slashdot refugee.
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.
Zucker whines
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,
As an amateur calligrapher with family members who are performers, I can confidently assert that:
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.
[fade in from black]
[hip charismatic kid]: Hi, I'm a Mac....
[middle-aged, sorta nerdy guy]: And I'm a P.C......
[insane looking creature who appears to be made from a conglomeration of movie monster parts]: And I'm the Entertainment Industry.....GIVE ME YOUR WALLETS YOU THIEVING BASTARDS!
Some bring out the best in others, some the worst. Some bring out far more.
Hmmm. I thought it was mostly FDR and WWII which achieved that.
... and then they built the supercollider.
You do know that the "Universal" in NBC/Universal is Universal Studios, don't you?
From Jeff Zucker's bio at Wikipedia (http://en.wikipedia.org/wiki/Jeff_Zucker):
"Chief Executive Officer of NBC
On December 15, 2005, Zucker was again promoted by NBC, to Chief Executive Officer of NBC Universal Television Group behind Robert Charles Wright, vice chairman of General Electric and chairman & CEO of NBC Universal. Zucker was responsible for all programming across the company's television properties, including network, news, cable, and Sports and Olympics. His responsibilities also include the company's studio operations and global distribution efforts [emphasis mine]. Zucker reports to Bob Wright."
I bet you drink a lot of Maalox in a job like that.
In the "old days" the FCC's "financial interest and syndication rules" (quick history) made it unprofitable for the big-three networks to own the content-production side of the business as well. The rules prohibited the networks from selling "reruns" of programs they produced (e.g, The Johnny Carson Show) to local television stations, a practice called "program syndication." Since all the risk capital in program development is upfront, a program's profits are not made on its initial showing but in "reruns" to cable networks, local television stations, and overseas distributors. By prohibiting the networks from profiting in this aftermarket, the "fin-syn" rules made owning the production studios uneconomical.
Nowadays, anything goes. CBS created Viacom and sold it off to comply with the FCC. Now Viacom owns CBS. NBC has merged with Universal Studios, and Disney bought ABC/ESPN by first buying a multi-market TV station owner. Australian-owned Fox has interests in newspapers, movies, satellite TV, US local television stations in the US, and many more outlets I'm sure. What were once strict divisions between media production and distribution have long since fallen by the wayside. In large part these pro-business changes reflected the opinions of new FCC commissioners appointed by Republican administrations. They also represented a change in the structure of television from a world where three networks commanded 90% or more of the viewers to one where they fewer than half that number. (http://www.boston.com/ae/tv/articles/2007/10/16/cbs_network_scores_another_ratings_win/)
Subscription models don't work for music. They may work for video, but that remains to be seen.
The whole idea of a subscription means you amortize the money you pay across the amount of content you use. Use lots of content, and you only pay a little bit per item. That sounds great when you first start out, because whoever offers the subscription has a huge library of stuff you've never seen before, so the idea of searching cheaply has an obvious appeal.
Thing is, people tend to re-use music and video. I can read a newspaper or magazine, throw it away, and never want to look at it again. If I hear a song I like, I want to hear it again later.
That's where the problem starts. When I build a library of items I want to use again, every item in that library competes with the others for my time and attention. If "really liking" a song means I want to hear it at least once a week, and I spend about 2 hours per day listening to music, I can only have about 350 songs in my "really like" playlist. Adding more songs means I'll hear less of the stuff I already "really like." The time each new item takes away from stuff already in my library has to be subtracted from the value of adding the song.
Eventually, the cost of adding another song balances the value of having it, at which point the song is basically worthless to me. Having a million songs to explore means I could spend a three years, twelve hours a day, doing nothing but listening to tracks I haven't heard yet, and never listening to anything that I already knew I liked. Very few people want to do that.
Once you start using content more than once, the idea of amortizing the cost over the number of plays starts to make sense. If I spend $0.99 for an iTunes track and play it 99 times, I've paid a penny per play, and the cost just keeps getting lower the more I play the thing.
So subscription models are good for people who want to explore a large body of stuff, and outright purchase is good for people who want to build a library of stuff they'll use frequently.
They make their money by controlling access to TRANSMITTERS and screwing:
* producers (the people who actually put the shows together,)
* consumers (the people who want to watch the shows the producers put together) AND
* advertisers, (the people who pony up the cash for access to the process while getting sold on nebulous "audience share" numbers based on the "facts" that people don't have any friggin' lives, families, pets, bladders or colons to distract them.)
NBC and the rest of the broadcasters are entirely UNNECESSARY on the internet.
No wonder they're running around like buggy whip makers after Henry Ford.
They're all going to get KILLED (and the world will go on fine after they're gone.)
They first show that gets to solicit money directly from the audience is going to slaughter them; absolutely slaughter them.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
Here's the thing - Apple and the content cartels have always been natural enemies. It's astonishing to me that the cartels have taken this long to figure it out, Apple's known it from the beginning.
The big media companies do not create anything. In one of their business practices, they do enable the creation of content by providing the up-front capital. But because of their lock on distribution, they can extract completely unreasonable terms from anybody who wants to get paid for producing that content. With the way that the business is structured, there's only one game in town - it just has many faces. It's highway robbery in the classic sense - they control a critical piece of the road from creation to the consumer and get to take away as much as they can carry.
That is, there was only one game in town. Now comes the Internet - you don't need a network of affiliates all over the country, you don't need to buy into a basic cable distribution package, you don't need to grovel at whatever deals the incompetent cartel executives tell you are in your best interests and ultimately you don't have to just swallow it when they tell you to dumb it down and add more tits and action. If you can get it created, the Internet will take care of the distribution for what is essentially free (at least, if you can figure out a way to make money, it'll be a tiny fraction of what people will pay).
The content cartels' days are numbered, and they're going to blame everybody they can for the extinction of their business model when it's really just the march of technology that has finally obsoleted their highway robbery.
We're not there yet but Apple, and anybody else who can figure out how to cut the cartels out of the decision making process while still allowing content creators to make money, is going to put these dinosaurs in the ground. And not a minute too soon.
"It is our blasphemy which has made us great, and will sustain us, and which the gods secretly admire in us." - Zelazny
Everybody I hear lately (including some other 'younger than me' forty year olds) waxes nostalgic for TV that they gave a damn about, (way back in the nineties. :-) I. gave up on TV as a medium about then anyway. (Now I'm doing podcasting, instead of sucking on the glass teat. [And no, you're not welcome to listen unless you have MS too, {in which case: "Welcome to the 'cast!"}])
And PBS is not quite the model to do things by.
Its still a network and I can't ignore the hokey cooking shows that take time from Ken Burns documentaries, and vice versa.
Its still a *broadcast network* and if I'm not there at 11:00 PM to watch Charlie Rose, well then I pick up whatever episode I want whenever I want off the web.
So who needs PBS? Charlie Rose certainly doesn't.
The *broadcast model* is BROKEN and the internet model WORKS.
NBC has total control over transmitters.
"We doan need no stinkin transmittters."
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
Nice strawman, because I never said anything like that. The country was facing crisis, people were starving in the streets. There were very few jobs. The social programs changed that, and allowed us to get back to a point where economic wellbeing was possible. How do you think those starving people would have started their own business in those consditions?
Forcing others to spend money on things they are not voluntarily willing to choose makes them worse off then when people voluntarily spend money on things they voluntarily willingly choose.Who said anything about forcing people to do things? They voted for FDR, didn't they? And his measures were very popular. Personally, I think letting people starve in the streets is much worse.
Pretending people who are robbed are better off from being robbed is pure fantasy.What's with you and the crazy strawmen? When did I ever imply that people being robbed is good or better than anything?
."Science" is just a misnomer for "best guess at present" given unknown variables which may or may not exist.Wheras "economics" is just making shit up in an attempt to get rich and manipulate others.
... and then they built the supercollider.