NBC jumps to …

Days after its public spat with Apple, NBC is taking its “Office” episodes and going to … Amazon, which apparently has a video downloading service called “Unbox.” Who knew?

The agreement with Unbox will offer certain returning NBC shows, including “Heroes,” “The Office” and “30 Rock” for $1.99 an episode, the same price iTunes charges. Unbox also will bundle shows and offer discounts on full seasons, an option Apple wouldn’t provide. Beginning Monday, viewers will be able to download the pilots of NBC’s new shows from Unbox for free before their television premieres.

(Rebecca Dana in the WSJ [$].)

The story subtly clarifies the pricing dispute: Dana says that “Apple said it had refused NBC demands that Apple pay more than double the wholesale price for each NBC television episode on iTunes.” (My emphasis.) That might explain how Apple could say NBC was trying to double the price to consumers (because Apple would raise prices correspondingly) and how NBC could safely deny it.

The NYT in its story adds one crucial bit of information:

While Amazon has solved many of the problems, Unbox is still limited in one important aspect: It is not compatible with Apple’s iPods, which are by far the most popular portable video players.

I just bought the new season of “The Office” on DVD. There are 22 episodes, and it cost me $40-something. It’s available on Amazon for just over $30, so let’s say the average price is $40. That’s less than $2 an episode; throw in a big assortment of extras, notably ten or fifteen minutes of deleted scenes per episode, and the price goes down significantly. In other words, NBC was already making a lot more money per episode of “The Office” online, without all the costs for extras and packaging and so forth, that it is on the DVD–and NBC wanted to jack up the online prices more.

As I said below, I don’t know why, in strictly financial terms, Apple cares what content providers charge for their wares in the iTunes Store. But given the relative pricing of DVDs and the online downloads, I think there is evidence here that, instead of viewing the remunerative digital sales as gravy (”The Office” episodes were among the iTunes Store’s biggest sellers), NBC was greedily trying to figure out how to jack up the price even more.

In today’s fabulous corporate culture, such attention to detail to squeezing every last dime out of your customer base is laudable. But in today’s fabulous digital culture, most of NBC’s products will be available, inevitably, online, for free. If you’re an iPod owner used to downloading “Office” episodes, will you buy a new video player so you can patronize this new Amazon store? Or will you get the shows bootlegged from a friend?


No comments yet. Be the first.

Leave a reply