NBC Universal’s pulled its shows from iTunes over pricing disputes (NBC’s demands would require iTunes to sell individual programs for $4.99, not $1.99), but Fox parent News Corp. isn’t following suit — despite wanting more control over pricing.
Speculation is that Universal backed out because it expected its upcoming online distribution channel Hulu (a project in which News Corp. is partner) to fill in the gap but News Corp. doesn’t see the two ventures as competitive; Hulu offers free, advertising-supported streams, while Apple’s ad-free downloads are available to buy.
NBC explained their decision as such:
“It is clear that Apple’s retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying.”
If that’s the case, then why is News Corp. willing to suck it up and undervalue its content? Maybe to look better than the big, bad Universal which wants to drain its customers wallets. Or perhaps because it understands what Universal doesn’t: they need Apple more than Apple needs them.
CNET blogger Don Reisinger plays it out:
First, the company will tout its new video service, Hulu, as the savior for this generation. After that corporate-speak is completed, it will begin telling the world about the issues with iTunes in an attempt to downplay its importance. First, NBC will use the line, “Well gee, shouldn’t we be allowed to make some money too?” And after that doesn’t work, the company will resort to the classic, “Well, look at all of these pirates! It’s the actors who are getting hurt by this. Think of them!”
After this new PR campaign is complete, NBC executives–obviously without any grasp on reality–will sit there and expect their assistants to bring them financial numbers that show exploding growth in programming sales. With cigars firmly in place, the big shots will open up the revenue reports and come to one damning conclusion: revenue from programming has gone down, yet piracy has increased tenfold.
Meanwhile, back in Cupertino, Steve Jobs and company are left counting their iTunes revenue with nary a blink at the modicum of lost revenue they experienced from the NBC move. Give it about six months and NBC will be calling back with an olive branch in hand, hoping to get back onto iTunes. Only this time, NBC will have an even worse agreement with Apple.
And the loyal News Corp. may have made some headway reaching a mutually beneficial agreement with Apple.
(iTunes Voucher Image by sarchi)
