NBC: No one will watch our shows more than once

Doesn't look like NBC will be joining iTunes' $0.99 TV show rental service anytime soon, as CEO Jeff Zucker thinks it's not enough to charge for 22-44 min. of... whatever soon to be cancelled sitcom they've shoved up against that inane reality show on that other network:

We do not think 99 cents is the right price point for our content. ... We thought it would devalue our content," Zucker said at a Goldman Sachs investor conference. He pointed to the fact NBC shows are already available for $1.99 for download on Apple's iTunes service.

But that's $1.99 to buy the show and watch it as many times as you want, not rent it and watch it once (or however many times you'd actually watch it during the 48 hour window). Want to watch it again next week, you gotta give NBC another $0.99, which brings them almost right back to that $1.99 and you still don't own it. Want to show it to a friend a month later, that's another $0.99, giving NBC almost $3, or more than they would have made for selling it to you.

But who am I to explain volume pricing, below impulse-buy thresholds, and -- you know -- match to one of the big media networks. After all, Zucker is the guy who yanked NBC off of iTunes entirely, only to come crawling back a short time later.

Fox, meanwhile, is keeping their options open, describing their involvement in the $0.99 program as a short term test.

Maybe someone should show them that Rolling Stone interview with Steve Jobs where he explained they aren't competing with other forms of purchase, they're competing with free.


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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

NBC: No one will watch our shows more than once


Umm...nobody rents the same show 3 times.
You are ignoring the larger issue -- control over the store. If rentals/streaming content are the future, NBC wants to be the storekeeper. Yout might want to consider the Rolling Stone interview further; if the networks are in fact competing with free, that is even a stronger motivation to run their own store, rather than trim your margins further by handing a non-negotiable cut of every transaction to a third party. At this moment, I think iTunes immediate position on iOS devices does offer enough extra benefit to those networks, but I can understand why they would not want to get themselves into that situation.
I doubt it is coincidence that the two primary investors in Hulu (NBC and Fox) are the ones refusing to go along with rentals via iTunes -- it immediately renders Hulu+ irrelevant, and, if they think Hulu+ or a similar network-run store has any future at all, they are not going to knife their own baby to join iTunes. (The third place investor, ABC would have far less reservations, as Jobs is on the board and is the single largest shareholder.)

Do these people know that their is such a thing a web site that I can watch there stuff for free 99% of the time, and how do they not know how essay it is to steel it.
99 cents is too much for someone who like to watch a lot of TV shows NBC is broadcast TV not cable why do they not just put everything online for at lest one year.

nbc actually have all their episodes on their website to watch for free. so charging for the is useless.

@(Copy of) Dev - Look at the number of Hulu+ subscribers. Now, look at the number of iTunes subscribers (and potential Apple TV users). If NBC, Fox and other media companies think that they can make more money by charging $9.99/mo (or whatever their "preferred" price-point is) per user for the content they're providing on Hulu+ over what the average iTunes user spends per month on TV shows, movies and the like (and soon-to-be Apple TV rentals), then it's quite obvious that they're not understanding what they truly need to do - which is to adapt to the changing market platforms and adjust, instead of seeing if they can keep the same old pair of boots on for the rest of their working lives.. Get it?

I agree, very well said Dev.
I'm sure another part of the problem is with Apple's cut of the price. I've noticed that Amazon VOD will do discount pricing for full season purchases while iTunes rarely seems to do the same. On top of that, up to this point the individual episode prices have remained matched to purchases, or in the case of ABC and FOX to the rental price for purchase instead on VOD.

99 cents actually would tempt me to buy the episode instead of just getting it from piratebay, just due to the ease of just purchasing and watching it... NBC is out of their minds. they better get on board, with internet being faster and more available. They better get people to pay for their stuff while they will, even if it is just a dollar

Most likely another reason why the big A won't allow flash on iOS devices - if we could stream all of our media, I doubt many people would buy or rent.

I don't understand why they freak out about lost advertising dollars. If they're charging customers directly for a rental, that's money they know they're getting. It's not subject to advertisers pulling out because of this or that, or deals falling thru, or any of those things that are out of their hands.
Surely NBC can't be making more than their (likely 70%) cut of 99¢ from someone watching it for free on Hulu with "limited commercial interruptions".

Jef fZucker. The guy crafted a sterling career for himself by producing the Today Show. He did so well that the brain trust handed the keys of NBC over to him.
He is so good at running their network that he took the #1 'Must See TV' network and moved them into last place - something that few people could do. This is the same guy who loves Law in Order so much he had to do 25 variations and loved The Office so much he made copies of it in 39 Rock, Community and Parks & (w)Rec.
So, Jef fZucker is making a move in online/digital to keeps his last place network's shows off of the top digital platform because it doesn't fairly value his last place network's shows. OK, I get it. Me. fZucker, good kick with job security after the company is sold because no ad revenue from poor ratings and no digital revenue stream will look REALLY good to the new owners.

If I had to give a dollar for every Seinfeld episode I watched, I'd need 3 lifetimes to pay it off. But, no, I'm not going to watch The Office more than once...

NBC will need to own their own store and be in everyone else's store. Just like Apple has the Apple Store but also works to get their stuff into Best Buy and other retailers.
And Fox is currently part of the $0.99 rental program :)

This post is absurd. Does Rene think Zucker made this decision? Certainly NBC has actuaries performing financial analyses of the options. And why does he always take Apple's side? The instant I heard Steve Jobs say "rent" and "TV show," I knew it was a terrible idea.

NBC Player anyone.....Network can still make $ off of ADs....isn't that how they make money anyways....

You miss the salient point in your own analogy - Apple, not Best Buy, has control over the everyday storefront price. I am sure that if NBC had the same control over the price in the iTMS, they would happily join. It is a big step to allow another entity control over the pricing of your primary product, and i can easily understand why NBC is reluctant to take it, regardless of the other benefits iTunes rentals might bring.
Also, one of the beauties of the Internet is that you do not have to be in every store, just a store that is accessible to the users you need to reach. Every storefront presence has a cost and benefit, so if NBC (or Fox) thinks the cost to their overall operations outweighs the benefit, they can stay out of any given store and still reach their customers. There is something to be said for ubiquity, particularly for an advertising-driven company like NBC or Fox, but it is not the only thing. Clearly, Fox thinks the position and convenience of iTMS rentals might be worth it (hence "trial"), whereas NBC is more skeptical of the tradeoff.

$0.99 is enough, there are plenty of people that will gladly get them for free instead...(illegally) I would rather just have a service like hulu and watch a minute and a half long commercial (like the Pepsi one) at the beginning, then I'd be commercial free throughout the rest of the show. Apple should look into this kind of TV, people are tired of the traditional way of TV right now.

"NBC: No one will watch our shows more than once"
I don't think anybody is watching NBC to begin with. It's getting increasingly getting more annoying to watch any :30 show when nearly 12 of that 30 minutes is filled with commercials. That's almost half the time. Piss on the networks. If you don't offer downloads at a reasonable price, I'll either rent it from Netflix or outright pirate it.

@(Copy of) Dev, why can't you just acknowledge that the marketplace has changed? We all understand that NBC wants to control its own store, but since it (and every other network) utterly failed to seize on the trend, recognize the paradigm shift in the marketplace, and embrace technology as a tool for making money (not losing it), why exactly should NBC be allowed to cry about it now?

99c is a key price point for many people. I know I buy far more music now just because of how easy it is. I used to just pirate it all. Same thing for TV. Torrents are relatively easy but at 99c I'm much more likely to just rent it without any hassle.

I think there might be something that's not mentioned here for the studios. Namely, if Apple's using the same pricing structure, the studios aren't getting that full .99. They could be getting the same 70/30 split as the other items at Apple, so they could be getting roughly 70 cents vs 99 cents per rental.

Please point out anywhere I said this was a good decision.
Reading can be fun.
As for "should NBC be allowed to cry about it" - I must have missed the WSJ article where refusing to do one segment of business with Apple was against some law. The market hasn't changed that much. Short of that, NBC is "allowed" to do whatever the hell they want because they have something people want to rent/buy. It is called a free market. Short of violating laws, they can choose to sell their own property where and when they want, and at what price. If they overplay their hand, their bottom line will suffer. That is the only "allowed" that matters. You may not agree with their choice, but despite your personal preference, that is their choice to make. Not yours. Your choice is to buy from them, or nit.

In this economy and with the Internet being so easily accessible to all media without paying. they should grab any money while they can I mean cmon we all seen the death of the compact disc!, but they made so much money before their demise now this is the same thing make some quick cash or they'll just download for free and you'll end up getting squat seems a real no brainer to me!

Funny since I have watched every episodes of The Office multiple times on Netflix. When I say multiple I mean around 10 times each haha. Whatever I don't care about $0.99 rentals since I get unlimited streaming for only $9/month through Netflix. I never really miss an episode so yeah.

TBH I think the rentals thing is kinda doomed anyway. From my point of view. I don't want to rent anything. I just don't see the point. Why would I when I could get a netflix membership and when they send me the DVD's I could rip the ones i really enjoyed and then watch them later at my lesuire. Okay okay, so technically that's piracy, but, its an available option.
Also, I tend to buy the shows I like through iTunes. I've bought the last two series of The IT Crowd, and currently the Inbetweeners because its available to be bought the day after its shown on TV here in the UK, and £1.89 per episode for something I enjoy is not outrageous, its comparable to a DVD of the whole series. the difference is, i get it quick. The DVD wont be released till after the whole series is shown.
To be able to rent something cheaply is not likely to make me take a punt on something I've not already seen and know i like. 99p per episode on a standard american series is still 24 quid to watch it all. And for that money, I could buy the DVD boxset.

@jeff Higgins sorry but you immediately lose your argument with @(copy of) Dev just for using the phrase 'recognize the paradigm shift'. Are you playing management buzzword bingo with the forum? What does that even mean?

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