Nearly two months after the fizzle out between NBC Universal and Apple during contract negotiations, NBC U CEO Jeff Zucker spills what some of the contested terms were. Most surprising is that NBC asked for a cut of hardware sales. Not the fact that they wanted a cut, but that they actually asked for it—they'd have more luck asking the devil himself to reverse whatever deal Steve inked with him. (Though handing content providers a slice isn't unprecedented.) Also, that pricing "flexibility" NBC pissed and moaned so loudly about was what we all expected: ""We wanted to take one show, it didn't matter which one it was, and experiment and sell it for $2.99." So in short, it was all about money.
"We don't want to replace the dollars we were making in the analog world with pennies on the digital side." Given that NBC apparently only netted $15 million in the last year of its deal with Apple despite accounting for 30-40 percent of video content sold (depending on whether you ask NBC or Apple), all the other contract sniggles aside, it's no wonder they bolted for Amazon—who probably ponied up a sweeter revenue sharing deal—and Hulu, where they'll have a sizable chunk of ad revenue. [Variety, Thanks John]









Comments
Can't I just rip a show off Hulu for free and move it to my iPod?
Like Apple would ever share hardware profit... They'd be more likely to ask NBC for lower prices, DRM free, and all-around blackball them.
Either way, I won't be using anything that isn't Apple/iProduct compatible.
I don't get the record companies wanting a cut on hardware. Do you think they ever got a cut on record players sold? or tapes? My guess is no. If a product is good, people will buy it. If it sucks, people will probably download it for free, listen to it once, and then throw it away.
Zucker's an ass-clown. iTunes was a billboard for programming on NBC and they just screwed the pooch.
Hey! that user created ipod touch commercial just aired on heroes here at about 8:24 central, go check it out! I cant believe Apple didnt mention the actual creator of the ad either, he must have been paid very well
Note: Flexible pricing ALWAYS MEANS HIGHER PRICES. NBC wasn't talking about lowering some of its 30-minute shows to $.99/show. No, it was all about raising the prices.
As for getting a cut of hardware.. I wasn't aware that the networks were getting cuts on TVs or that radio stations get a cut on all FM tuners. Talk about greed.
For me, I don't want to go to yet another F'ing website to see some shows. Nor do I want to be tied to a streaming site which prevents me from watching any shows while I travel. Since NBC's actions, I'm actually watching LESS NBC on both my iPod and my TV. I'm tired of supporting these companies and their idiotic actions.
The AppleTV sorta sucks. I'd say that NBC would be better off backing another hardware provider and dictating that they give them a piece of the pie for their exclusive content.
@TOASTMAN91 Shame on you! SHAME SHAME SHAME! Tubgirl as your icon? I mean, COME ON!
@mcjake: Ha Ha Ha! I was wondering how long it would take someone to notice not to mention I didnt think it would work! Trust me I have to close my eyes (and my mouth) whenever I click on my account!
Content has no value anymore; something NBC and the other big media companies must learn if they are to survive. Too much content is available for free, either legally, supported by ads, or illegally, supported by the free and open nature of the internet.
Consumers want the hardware; ipod sales have proven that. Consumers want the the content for their hardware, and they can get it whether NBC collects $2 through iTunes, or from some internet software.
@ianmac47: You couldn't be more correct imo, the moment they notice it's only ones and zeros will be the day they just finally give up, it will happen. They need to become more creative with how they get ad money, and this isn't it.
So they actually did want a cut of the hardware. Buwahahaha. What a bunch of clowns. Of course MS caved in - because they are desperate to push units - but expecting Apple to shell over $ for something NBC had absolutely NOTHING to do with is hilarious.
The balls on NBC! Asking for a cut of ipod/apple TV sales. Screw that! I for one am becoming less of a fan of Network TV anyways. So I say, "so long NBC", good luck with that Hulu-doku thing. You won't see me visting that site. Viva iTunes Music Store! Viva Apple! I know, I know I sound like a fan-boy, so what.
LMAo TUBGIRL. man, it looses all the effect when it's thumbnail sized, though props for using the most disturbing photo on the net as an avatar.
Lets see If i get banned for it? hopefully not since Giz seems to get a kick out of it,
Wow, I cant figure out who is more 'right on the money'@ianmac47:
or lucky_you calling Zucker an assclown?
Like most people if its available on iTunes I pay for it; and if its not I'll get it on my iPhone/iTV.
tim
At least Zucker had a sense of the importance of the hardware. All the network's tv on the web is a waste of time. Apple's got the most non-TV media consumers of any platform by an order of magnitude. They are taking their time with the living room but AppleTV is amazingly easy to use. With a bit o' software it makes a Netflix subscription worth its weight in gold. As far the early adopter experience, Apple has blown everyone else away. Did you ever try Amazon Unbox in the early days? Never again. The living room is up for grabs but the Apple model is hard to argue with. Pay for what you want to watch... if an advertiser wants to fund it... god bless. 25% of the advertising? Amazing. The thing I don't get is how inept the cable cos are. They have the set top and can't code their way out of a paper bag to take advantage. Good show.
When I saw the first episode of Heroes I got hooked. I found myself downloading episodes from iTunes. Then, because I am not as rich as the Gizmodo staff, I started tuning in to NBC so I wouldn't have to pay to watch.
I don't watch a lot of t.v., so when NBC pulled their content off iTunes I knew there was no way I was going to see every episode. Rather than watching only some episodes, I stopped watching all together. I haven't seen a single episode of the new season of Heroes and I my life went on. Goodbye NBC.
@toastman91: MmmmMMmmm. Orange juice.
@mudman: "When I saw the first episode of Heroes I got hooked. I found myself downloading episodes from iTunes. Then, because I am not as rich as the Gizmodo staff, I started tuning in to NBC so I wouldn't have to pay to watch."
Bingo, mudman. Same with me and 30 Rock. The show would've come and gone had it not been for iTunes.
That's what Jeff Zucker can't seem to understand. To think that they gained nothing more than $15 million in revenue from the actual sales of episodes is preposterous.
Hey, NBC/Universal! Because of your greed, I'm going to go out of my way to NOT buy any of your DVDs. PS: When Hulu launches, someone will eventually figure out a way to download all the shows to their computer without the DRM. Then everyone will just edit out the ads and upload them to their iPods.
While I think NBC should have stayed on iTunes, but kept the contract unexclusive (why not give their customers options?), I don't think NBC should be scoffed at.
Remember, Apple is banking on a good amount of monthly revenue that AT&T would otherwise pocket ([gizmodo.com])
i'm happy they are starting hulu. i dont think i should have to pay to watch an episode of a show i like to watch. i realize nbc as well as fox have shows on their own websites but the player on nbc sucks. i will never buy an episode of anything, or a movie from itunes. i wont even buy songs from there because there are less expensive ways to get music for an mp3 player. i dont really understand why someone would want to watch show on the tiny ass screen of and ipod or zune, i'd watch them on my laptop except for the fact that video quality blows my dog.
also considering how much they sold on itunes it is apple that should have given nbc more money. you apple fanboys are retarded, your worse than microsoft and nintendo fanboys put together. with all the stupid things apple have done lately it makes me wonder why you guys defend everything they do.
as i've mentioned before on this topic - NBC corporate execs - you are bunch of greedy wankers!
they're behaving like blue chip dinosaurs who just don't get the way the world is going.....and we all know what happened to the dinosaurs!
BY REEBS82 AT 10/29/07 11:31 PM "i dont really understand why someone would want to watch show on the tiny ass screen of and ipod or zune"... You don;t get out much do you?... Ever travel? You know, Plane, train, passenger in a car, etc?
I too got completely hooked on Heroes WAY AFTER the first season ended - would've never bothered if it weren't for iTunes.
$15 million... that's NET PROFIT, because they want to make it look as paltry as can be. I can't even imagine the ridiculous overhead costs they included to get to that NET number, Hollywood is notorious for it's accounting... but it doesn't really matter, because even if all NBC made was $15 million dollars, that's an EXTRA $15 million above and beyond what they milked from advertisers on free TV. So a broadcast network gets 98% of it's revenue from it's advertisers (surprise!)... and another 2% from an entirely new source, the pay-for-episode download crowd... Let's not promote it, support it, you know - see if we can grow that to 5% or 10% of total profits??
Grab gun, shoot self in foot - hobble along for the rest of eternity. Brilliant.
I just want easy. If Hulu, or NBC.com, or whatever doesn't make it so simple - I'll just skip the show.
I cannot even believe there are people mad at Apple over this. They basically fought to the end for you to have reasonably priced content. They fought for you the consumer... Just like Walmart and Costco do with manufacturers... so why wouldn't Joe consumer support that?
@reebs82: It's a huge conspiracy to upset you, and you alone. We've been posting like this for years just to bait YOUUUUUUUUUUUUUUUU!
btw, Heroes season 2 sucked so far.
@Type-E: I know, huh? I feel like I'm just waiting for "Lost" to kick in.
100% of zero revenue will still be zero.
What clowns like Zucker still don't realize is that people don't pay for content - and never have. They pay for the convenience of the distribution method.
If companies want to make more money, they need to fire overpaid CEOs.
I'm afraid its still beyond me why anyone would pay to watch a television show that they can watch for free.
BTW... watched about 10 minutes of Heroes.. *yawn* ...thank God for the remote.
All the whinning from NBC is crazy. NBC says iPods sell because of their content, so they should get a cut... well, like others pointed out, VCRs, DVD players, and computers sell because of their content too. Have they gotten a dime yet? We seem in perpetual countdown mode for Apple to introduce a TiVo/Cable card solution and NBC knows it. Apple's trying to make NBC a part of that, and they made their chose not to be.
Universal got a cut of money from Zunes and then proceeded to refuse to let their songs be shared even 3x3 via squirt. I thought that was a riot. They want it both ways. --Meanwhile, people quietly buy EyeTV to record favorite shows, and rip their own DVDs to both computer and iPod... not giving a hang what NBC wants.
NBC can kiss my ass. I'm done with them if this stupidity keeps up. Will not sign up for Hulu. Idiotic name, and idiotic concept. I don't sit in front of my comptuer to watch shows, I stream them to my TV. Bittorrent will work fine for that if they didn't want my $1.99.
i find it very odd that a group of, presumably, informed tech consumers would be so pissed at NBC for being "greedy" when these same people are getting completely ripped off by apple. "I won't support NBC anymore because they're greedy bastards. Instead I am going to continue to support iTunes(Apple) because they're a nice wholesome company that operates almost as a non-profit." Oh wait, what's that you say, Apple has some of the largest mark-ups in price over cost and development than anybody out there. Nevermind.
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