Who came off better and worse in the recent Apple NBC iTunes
debacle?
The Internet is buzzing with opinions and viewpoints in the
light of the planned severance to come next week, when The Peacock’s
fall programming has its public debut.
Chris Tew covered the news soon after it broke,
and now we receive word that, following its exit from the iTunes shop,
NBC
has tapped Amazon for the distribution of its content for the season
ahead. So we figured we’d pick the story apart some
more.
There’s no doubt that both Apple and NBC are going
to lose out as a
result of this separation. Whether or not NBC did in fact want a
premium paid by iTunes customers for its new shows, doesn’t
really
matter all that much.
Sure, the alleged demands of $4 or so per episode
are no doubt outlandish, if that is indeed an accurate number. I dare
say $1.99 is a pretty hefty fee already.
Apple Provides NBC With Most Income
More important than anything,
however, is the fact that NBC needs the sale of its programming on
iTunes to continue, regardless of cost, because, simply put,
Apple’s
outlet has consistently provided the network with the most income this
side of the online-offline divide.
There’s really no getting around
that truth.
On the other side of the aisle, Apple sits defiant (over
NBC’s
“greedy” demands) but also undoubtedly frightened
at the possibility
that it may chart a potential 40% decrease in sales over the course of
Q4 2007.
The company has made it no secret that that very figure
comprises the portion of downloads of shows from the iTunes Store
produced by NBC. I know my basic math, and 40% is fairly close to half
of the pie.
That’s quite a large void to fill, don’t
you think? I can’t
imagine how they’ll manage the task, particularly on such
short notice.
Yet, yesterday NBC arrived with news that may give some the
impression that the network has moved on and found another suitor for
its content, and that it’ll do quite fine without a continued
partnership with Apple.
NBC Is In Denial
I must say, NBC is in denial if it believes its own hogwash.
Amazon, NBC’s new bridge to Web viewers, may have a
reasonably
trafficked marketplace, but it’s hardly worth comparing to
the much
more refined, much more digitally entwined storefront that is iTunes.
(Entwined in the way that the iTunes-iPod-Apple TV all work hand in
hand.)
Like iTunes, Amazon Unbox wraps content in a layer of DRM, so,
in
general terms, they’re both plagued with a similar problem.
So why does
one (Unbox) suck worse than the other (iTunes)?
Well, it’s pretty elementary really. Amazon
restricts use of
copyrighted content with Windows Media DRM. This means only a limited
number of computers (2) can be authorized by the consumer to access and
play back said content.
The same type of limitation is put in place for
transfers to portable media devices.
Apple does much the same thing with iTunes, but iTunes itself
seems
to come to its own rescue. Because it has the incredible benefit of the
iPod and the secretly quite powerful Apple TV at hand as well, things
work absolutely brilliantly for the ecosystem.
Even though DRM is a
terrible invention and should be eliminated at once, it
doesn’t cause
much trouble at all within the iTunes-dominated circle.
It is, after
all, the most overwhelmingly popular platform for all sorts of media on
the Web at the moment, and, well #1 ain’t a bad spot to be
in, is it?
The same simply cannot be said for Windows Media-based
solutions.
The issues which plague all online venues other than iTunes
are, in
effect, what make Apple’s storefront by default the most
logical space
for content owners to opt for when looking to make the greatest number
of sales possible.
NBC Decision Bad For Consumers
NBC’s decision to sever ties with Apple for its fall
season is bad for the network, but more to the point, it’s
bad for
consumers.
Consumers, after all, are the ones that have given NBC its 40%
share
of iTunes sales in the area of television programming, and they
won’t
take too kindly to have to venture elsewhere.
Nor perhaps even pay an
even greater premium – for things previously so easily and conveniently
made available through Apple’s very popular cross-platform
solution.
I dare say, because of this disruption, we’ll see
relatively few
consumers move to Amazon Unbox for their fix of Heroes, and instead
seek their weekly supply of entertainment via illicit means. And that
definitely won’t help NBC’s case in the least.
Perhaps we’ll see a regretful, grumbling NBC return
to the Apple
storefront after several weeks of poor results from the land of Unbox,
eh?
Paul Glazowski is a contributing author discussing the social networking world, his work can be found on Profy.com
