If you go back to the original divorce papers, Apple says that NBC actually wanted to double the wholesale price of TV shows, making them $4.99. Even if you don't take Apple's word, NBC CEO Jeff Zucker said that what NBC wanted was a cut of hardware sales and to "take one show, it didn't matter which one it was, and experiment and sell it for $2.99."

That's a lot different than the pricing structure revealed yesterday. The $2.99 pricepoint is for high-def TV shows from every channel, not simply a popular show NBC tried to milk for more money. It's also commensurate with the elevated price for HD movie rentals or DRM-free tracks (though the DRM-free tax is bullshit). Yes, there is some flexibility in TV show pricing, but it's flexibility that benefits users—older shows are cheaper, and people get a discount for buying a Season Pass, which is pretty logical.

The price hikes that NBC asked for effectively didn't happen, and we can be damned certain they're not getting a cut of the hardware. They even come out and say that they didn't get all the pricing options they wanted. So, even if you consider selling older shows for 99 cents to be a concession on Apple's part, I fail to see how that's Apple bending to NBC's iron will: The pricing structure is not arbitrary (a show doesn't cost more just 'cause it's popular); we're not being asked to pay more than we used to pay for the same stuff; and the higher $2.99 price for HD or looong TV shows falls in line with how Apple has been treating HD video. See also: [Bits]

"In the long term, the consumer wants there to be quality premium-produced content, and in order for that to continue to be a viable business, there needs to be significant protection around it." This is the same NBC that was working with AT&T to build a network-wide dragnet for pirated content, so color us totally not surprised. Just don't know why Microsoft would agree to this and give people a reason to avoid Zunes (whether it's a legitimate one or not), when they're already way behind the iPod (which told NBC to take a flying hoo-ha).

Update 2: Saul has since updated the original post with Zune Insider's retort, but he also adds what Microsoft spokesman Adam Sohn told him yesterday when he asked about the copyright stuff:

"I don't think they are wrong, but we are not going to characterize those discussions. We have agreed to work with NBC across a range of topics, and protection of copyrighted material is certainly one of them."

"If you look at studies about MP3 players, especially leading MP3 players and what portion of that content is pirated, and think about how that content gets onto that device, it has to go through a gatekeeping piece of software, which would be a convenient place to put some antipiracy measures. We are financially harmed every day by piracy. It results in us not being able to invest as much money in the next generation of film and TV products."

Bill appears and after a brief state-of-the-industry intro, notes that this is his final CES appearance. He'll look back on some of his previous experiences, noting how far we've progressed since he declared the "Digital Decade" in 2001 for three reasons:
1. The promulgation of lower-cost HD displays and soon interactive surfaces.
2. Mobile intelligence - cellular and GPS enabled products that help us get through the day
3. Interaction with technology increasingly mirroring the way we interact with people

First announcement: NBC Universal is making MSN the exclusive home for NBC's coverage of the 2008 Summer Olympics in China. It's the first "long tail" Olympics: there will be thousands of hours of content available at nbcolympics.com, ranging from the most popular sports to the most obscure—from basketball to badminton. The video will be both live and on demand, with over 30 simultaneous live broadcasts; 2,200 hours of live broacasting and 3,000 hours of on-demand content. All of the video will be shared in Silverlight format in "near HD" quality.

Hands-on: Never-before-seen demo of the Surface table. In this demo, Bill designs a snowboard for himself—yes, a snowboard—using multitouch technology to try out different designs, then save them to his Windows Mobile phone and share with his friends. I only wonder what his insurance company thinks about his snowboarding plans.

Robbie Bach, Microsoft's President of Entertainment & Devices Division, will take the stage to cover the bulk of the presentation, talking about:

• Xbox's banner year - 17.7 million Xbox 360 units sold; 7 titles surpassing 1 million sales mark; U.S. users spent more on Xbox 360 in 2007 than more on any other game console ever

• TV show deal with ABC Television and Disney Channel for Xbox Live programming, available for direct download to Xbox 360. It includes 500 hours of content, in standard and high def, available at the end of the month, with shows such as Desperate Housewives, Lost, Grey's Anatomy, plus Disney shows including Hannah Montana.

• Movie deal with MGM - Xbox will offer MGM films in standard def and high def including the entire Rocky series, Terminator, Dances With Wolves, Silence of the Lambs, Legally Blond, Barber Shop and the Bond franchise.

• New application for Microsoft's Media Room IPTV, distributed by AT&T U-Verse: On TNT, NASCAR fans can choose a view of the race from the camera inside their favorite driver's car via their set-top box; Showtime boxing will let you choose camera angle and audio feeds from the trainer, ref, or the commentators; in CNN's coverage of US presidential campaign, viewers can vote on issues, gauging voter opinion in realtime.

• Media Center Extender support is growing in the consumer-electronics industry, led by Samsung, which will be working on a connected TV with MCE capability.

• Zune 2 off to a good start, with 1.5 million people starting Zune social fan pages since the service began in November. Bach will announce the availability of the Zune in Canada, the first distribution outside the US.

When Bill takes the stage again, he will demonstrate a "device of the future," something that won't necessarily become a product sold by Microsoft, but still a good glimpse of things to come. The device will ostensibly store and catalog all of Bill's memories so that he can pull up a reel of all his past CES keynotes. At one point, he will snap a picture of the Venetian auditorium and the gadget will recognize the venue, proposing various recreational activities he might enjoy after the keynote.

This is a rough sketch of the proceedings, one that's bound to change considerably. I'm told there will be some surprises—maybe a celebrity guest or some farewell treat. Who knows? That's why we plan to catch the whole event, and fill in any gaps that may be missing from this otherwise thorough digest. (You're welcome.) [Microsoft at CES]

It's not a bad deal, just a seemingly redundant one on NBC's part—how many sites do we need to be able to watch Heroes on? From the Netflix side, it's pretty good, though—it gives them more content on the digital distribution front, which might entice eyeballs to it that might have otherwise not strayed in that direction. Moreover, it might draw other networks into a deal with them if it proves to be click-sticky.

That said, I wonder if Netflix realized when NBC promised them "exclusive subscription video-on-demand rights to [Heroes]" that it was already available at 76 other sites. Don't worry Netflix, it's not you, it's them. They just came out of a really rough divorce, and they're just not ready for a real commitment right now. [Variety via NewTeeVee]

The ratings end is a bit more boring: NBC's tapping into TiVo's second-by-second ratings service to see what viewers are watching, pausing and skipping, making them the first major broadcaster to do so. It might be more interesting if we knew of something new they're going to do with the data, but odds are they just want it for selling ads. [Reuters]

The setup would work a lot like GooTube's—the networks would hand over a bank of material that AT&T/Vobile would run traffic on the network against, looking for positive IDs. If it matches the "video DNA" on file, it gets the hammer. Supposedly Vobile's ID tech is tops, at least among "a dozen or so other systems" tested by the MPAA. AT&T's reportedly been testing it since spring, though it'd launch until late 2008 at the earliest.

In order to keep consumers and net neutrality advocates from flipping out, one marketing strategy AT&T might use is to emphasize the filter as a way to catch child porn, since no one can really argue against stopping predators. On the flip side, an effective monitoring program is loaded with business propositions, from helping them net content distribution rights to being able to "offer far more detailed information on [customers'] likes and dislikes, in turn enabling AT&T and its partners to land lucrative deals with advertisers hungry for such data."

I could act all shocked and appalled like Wilson about AT&T being so disinterested in customers' privacy (to put it lightly), but it wouldn't be genuine, and I'd feel dirty in the morning for lying to you. [BusinessWeek via Broadband Reports]

"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]

"Once an industry initiative is formed, Google will be forced to accept the common model rather than use its own solution as a competitive differentiator," Forrester Research analyst James McQuivey said. "The pressure on Google to go along with this cooperative initiative will be intense, as the fate of existing lawsuits will likely hinge on Google's acceptance of the common solution."

The issue seems to be the same old, same old: NBC wants to bump prices and complicate the packaging/pricing structure, while Apple ostensibly wants to keep things the way they are: simple.

More than likely, NBC's going to pull a Universal music: no long-term contract, but short-term sales agreements to keep their content up. That way they can still make money while (maybe) maintaining some leverage for negotiation. There's still a few months left, so it's possible they'll come to an agreement, but greed makes for some strong fences. [NYT]

Also part of the announced deal are several free, ad-supported on-demand shows, such as "Friday Night Lights," along with content from Bravo, SCI FI, USA, Telemundo and mun2 on five new ad-supported channels available to MobiTV subscribers. But who cares about that when you can get this kind of awesomeness?

While over-the-air on demand has great potential, the 24-hour rental period is a deal-killer, unfortunately. $1.99 makes a great impulse buy if you're stuck on a train or in a doctor's office and missed Sylar impaling ******** on the ceiling the night before, but not if the content magically disappears a day later, especially when you can buy it from iTunes for your iPod to keep for the same price. Or for no price from BitTorrent. – Matt Buchanan

Press Release [MobiTV]

Zucker whines that "YouTube needs to prove that it will implement its filtering technology across its online platform. It's proven it can do it when it wants to." It sounds strange, considering NBC has an official deal with YouTube, but not when you consider how wishy-washy NBC has been, pulling clips not officially uploaded by the channel.

Murdoch's criticism is more of the same old, same old: "How do you monetize it?" It's still the question du jour for sure. Then again YouTube's founders, who each walked away with over $320 million seem pretty monetized. – Matt Buchanan

NBC blasts Google's YouTube over copyright [CNET]
Murdoch the latest media mogul to take on YouTube [CNET]