Steve Mage

Did Apple Cave or Did NBC Bend?

I hate to say "I told you so..."

news.cnet.com/8301-102...

Did Apple Cave or Did NBC Bend?

Angela Bromstead, president of NBC Universal, which owns and produces The Office had this to say: “I’m not sure that we’d still have the show on the air. The network had only ordered so many episodes, but when it went on iTunes and really started taking off, that gave us another way to see the true potential other than just Nielsen. It just kind of happened at a great time.” (Prior to the spat, 2007)

Here is the bottom line: NBC’s SEASON suffered last year. That is at least partly attributed to not being on iTunes. And while profits for Studios from iTunes are not CURRENTLY anything that warrants a second glance, fast forward a few years when on top of the 65 million current iTunes account holders, another 50 million or more Americans have iPhones or iPod touches… This landscape is changing fast, and NBC knows it.
Let’s recap last year, shall we? Jeff Zucker made a complete IDIOT of himself when he threatened (unfortunately for NBC, very publicly) to remove all NBC content from iTunes by the end of the year. Apple, instead of cowering in dismay, did Mr. Zucker one better: They immediately and unceremoniously removed all new NBC content post haste (Early Sept. 07).
Here is the word on the street: Apple made the decision to completely ban NEW NBC content from the iTunes store for a period of exactly one year. That is why even though Apple and NBC appeared to “make nice” in January, you haven’t seen NBC content back on iTunes until now (Early Sept. 08).
Apple approached this issue in this way in order to send a message to the other networks that might be contemplating doing the same. “You’re free to leave whenever you want, but chose wisely, because it'll cost you once you decide you want back on the gravy train.”
Apple’s financial reports never registered even the slightest blip from a missing NBC over the last 12 months. In fact, their growth has been unprecedented and their profits have been Apple’s largest in history.
NBC can't say the same. Their financial reports show blood from last season's fiasco, and their Nielsen Ratings were in the toilet.

And in the end, NBC is back and you and I can still buy The Office or any other new NBC show at $1.99, just like we could last year. No change there. Don’t let the spin people fool you. NBC did NOT get what it really wanted. But the variable pricing scheme (for HD and older shows - a simple no brainer) sure helps make Mr. Zucher LOOK like he saved a little face, doesn’t it? And Apple is classy enough to let him keep some of his pride and even have his day in the spotlight, too. They know people can see where the cards really lie.
NBC made a massive miscalculation. End of story.

But here are a few classic NBC CEO Jeff Zucher quotes for you anyway:

“Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.” - NBC Universal chief executive Jeff Zucker, Oct. 29, 2007

Can you imagine, no cut for NBC from Apple’s iPod & iPhone profits??? Of all the nerve!

“Apple has destroyed the music business–in terms of pricing–and if we don’t take control, they’ll do the same thing on the video side.”
–NBC Universal chief executive Jeff Zucker, Oct. 28, 2007

I think GE needs to make sure Zucher sits down with a public relations professional...say every Monday & Wednesday at 11:00 from here on out.

“We’ve said all along that we admire Apple, that we want to be in business with Apple. We’re great fans of Steve Jobs.”
–NBC Universal chief executive Jeff Zucker, Jan. 20, 2008

What is this? Schizophrenic Economics? Or the public apology of someone who realizes he made a serious miscalculation?