What Was NBC Thinking?
Sep 4th 2007Nik AgarwalBusiness/Finance
In case you have not heard, NBC has decided to pull their programming from Apple iTunes. Why? According to Apple, NBC wants to charge consumers $4.99 for episodes and package movies and episodes together. Currently, you are able to purchase episodes for $1.99 and only a day after the episode has aired on TV.
The official press release from Apple:
CUPERTINO, California—August 31, 2007—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.”
Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.
I think NBC, like other media corporations, is becoming greedier by trying to milk more money from the consumer. What NBC needs to realize is that consumers can easily download illegal versions of NBC programming just hours after they air for little to no cost. Jeremy Horwitz, editor-in-chief of iLounge, has written an excellent and detailed open-letter to NBC outlining why he thinks NBC is making a huge mistake. After reading his lengthy letter, I have to agree with him and also add that NBC has more to lose than Apple. People may think that Apple has quite a bit to lose, but Apple literally owns the market for both portable media devices and electronic media. I just wish that companies were driven more by consumer rights and consumer freedom, rather than penny-pinching profits.

