NBC UNIVERSAL Set to Make a BIG Mistake

Question. How do you reward the service that helped save THE OFFICE from the brink of cancellation? If you answered, allow your contract to expire and attempt to start a competing venture, you my friend have been taking Michael Scott’s business advice a little too seriously.

Unfortunately, a competing service is exactly what NBC Universal is hoping to launch, with the NY Times reporting today that the company has decided not to renew its contract to sell digital downloads of television shows on iTunes. Brilliant move NBC! Just ask MTV how their URGE music store is doing against iTunes!

Yes, it’s understandable that NBC UNIVERSAL is nervous about giving Apple too much power and that they’re getting ready to launch their own online venture, but the reality of the situation is that iTunes works. Not only does iTunes allows fans to catch up on shows they may have missed. It gives audiences a chance to discover shows they never would have bothered watching and more importantly, helps generate new viewers for shows that are currently on the air.

Case in point BATTLESTAR GALACTICA. When the show initially premiered, this TV Addict had absolutely zero interest in watching a re-imagined take on a cheesy 70’s space odyssey. Yet when it came time for the second season to start, the critical rumbling was too strong to ignore — Ronald D. Moore’s take on GALACTICA was a must watch. So this TV Addict went straight to iTunes and downloaded the mini-series. Not surprisingly, we were hooked and quickly downloaded the rest of season one and two in order to catch up. Thanks to iTunes, SCI FI gained a fan and a powerful cheerleader for the show.

How about THE OFFICE? Anyone else excited to watch Pam and Jim’s relationship play out this season? If so, you have iTunes to thank. Said Angela Bromstead, president of NBC Universal Television, “I’m not sure that we’d still have the show on the air. The network had only ordered so many episodes, but when it went on iTunes and really started taking off, that gave us another way to see the true potential other than just Nielsen. It just kind of happened at a great time.” In their own words, NBC admits that iTunes played an integral role in saving one of their most important assets. Imagine NBC without THE OFFICE or SCI FI without BATTLESTAR GALACTICA. Is NBC Universal really that short-sighted to take their shows off the one service that helps generate viewers (and dollars) for them?

In the end, all NBC Universal [and every other Hollywood Studio for that matter] needs to know is this. Television fans like things the way they are, or to quote a recent poster on MacRumors.com, “Either I can buy a season of SCRUBS and THE OFFICE when it starts again or I can find it in some other manner that will not benefit NBC at all.”

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  • But the reason that NBC is moving away from iTunes is because they are going to make ALL of their programs available on their new website Hulu.com. This player, went up and running, won’t be all that different than what ALL the major networks currently have in place on their network websites.

    For the past year, almost ALL NBC shows have been available for free on NBC.com. Fans of The Office still have to pay to download on iTunes. Why not make it free for everyone?

  • Josh

    I don’t know, this doesn’t really make a difference to me. I never buy shows on iTunes. The lacking picture quality makes it so that it’s not even worth the $1.99 per episode. If NBC is going to sell HD or near-HD videos on their own service, I’m in. I’d much rather go that way than iTunes.

  • gmmr, While I appreciate the fact NBC wants to have their product within their ecosystem (hulu.com) — why not also keep their product on iTunes. People are just getting used to paying for product, instead of discourage it, why not keep the ONE system that’s actually working.

    Great, you can watch shows on hulu.com or nbc.com — How’s that going to help you enjoy THE OFFICE while on an airplane? I love watching shows on my iPod and Apple TV. It would be nice to be keep doing so.

  • I think they are doing it because they need Hulu to succeed, and if viewers can get the show elsewhere they might bypass Hulu all together.

  • ||TheTVAddictAddict||

    Hahaha…worst business move ever. In the end, it will be clear that this hurts BOTH companies…this is unfortunate for Apple.

  • Rich S

    Apple is only interested in selling IPods and not making any money off of ITunes. The more new content, the more IPods sold

    Meanwhile NBC is the first network to tell Apple that they need more money for each episode at the wholesale rate. For the last year I have been reading about how the music companies have been grumbling about how little money they recieve for their content they provide. NBC is the first to demand an increase and soon other companies may follow NBC’s lead.

    Now I believe NBC has to demand more as the people making the TV programs are demanding more for their participation in new technologies like video downloads. I seem to remember that a few of the union contacts are up for negotiating this year. The unions should get a bigger piece of the pie this time around.

    Iif NBC doesn’t demand more than they are, they are not going to be making anything from Itunes unless Apple raises it’s fee per episode and until then, Apple will be making a whole lot off of it’s IPods

  • Dear Rich,

    Thanks for posting! But according to the NYPost, NBC demanded $4.99 per EPISODE! Which is ridiculous, considering that would equal $110 for a season of TV with no extras, no production costs, no beautiful DVD box!

    I’m sorry, but I think it’s pure greed on behalf of NBC.

    If studios were smart, they’d continue the trend of $1.99 per episode. They have to teach kids that paying for media is the right thing to do. Right now kids growing up now think stealing music/movies/tv shows is simply the way it is. They didn’t grow up like us (or myself) buying CD’s, DVD’s etc….

    Mark my words…. this is a huge mistake for NBC.

  • NBC is the #1 provider of television content for ITunes. The Office, Battlestar, Heroes– all are owned by NBC Universal. Its all about supply and demand. The demand is clearly there for the NBC shows and any good businessman would grab this opportunity to up the price. If ITunes wants to keep profiting off NBC’s hard work, they better pay more, and since they were unwilling to, NBC bailed. Makes sense to me.

    Plus, just because you had a personal experience with BSG, doesn’t mean that’s how it works for everyone. I personally hate watching tv or films on a computer or ipod (I have exactly 0 videos on my video Ipod) and rent everything (including Battlestar Season 1 and 2, after the fact) on DVD if I want to watch it. There’s a reason tv screens are bigger…

    If people want to watch The Office on their computers and can do it for free straight from the source, why wouldn’t they? At least by cutting out ITunes, NBC is keeping all their own properties in-house and solely under their control. People won’t have to steal episodes if they’re on NBC’s own site, and NBC will still get paid by advertisers who pay to be featured on Hulu. Sounds like a pretty rock solid business plan to me.

  • Rich S

    I agree that 4.99 an episode is expensive, but Apple won’t raise the fee for video content by any amount and content providers are getting very little of that $1.99 that you pay to Apple.

    All I am saying is that NBC is the first company to stand up to Apple. People want to get paid for all their hard work and other will watch how Apples deals with NBC before they decide what to do.

    FYI: I watch most of my television on the network websites as I don’t have cable. If Hulu is better than the current NBC.com, I will be watching.

  • Hey Rich,

    I buy all my music on iTunes — and am not against paying creators for their work. I just don’t want to be taken advantage of. Asking for more than $1.99 is simply greedy. TV and Music bought online should be far cheaper than physical cd’s and dvds. Afterall, there are no shipping costs, packaging, design, transportation, shelf space etc.. with digital copies.

  • ||TheTVAddictAddict||

    I agree wholeheartedly with the TV Addict. 4.99 is total greed. Before the success of iTunes, it was pretty much all torrents and P2P networks that were illegally swapping files. Now, at least, these networks are getting SOMETHING for their content, and finally people are starting to catch onto the “buying” bandwagon.

    Apple and iTunes single handledly spearheaded the move to make buying content “cool,” convienent, and safe.

    The ONLY reason for this move is because of NBCs upcoming online store. If they try and charge $4.99 per episode, they’ll be in serious trouble.