Apple vs. NBC IV: The Quickening
David Carr in the NYT takes a contrarian view of Steve Jobs’ face-off with NBC, which doesn’t like the single-pricing for its TV shows at the iTunes store. Carr says:
Let me get this straight: Steve Jobs insists that songs on iTunes cost 99 cents and television episodes cost $1.99 because consumers crave simple pricing.
Except, of course, when it comes to Apple’s own products.
He’s talking about Apple’s decision to lower the price of an iPhone by a third. The company endured a lot of complaints from first adopters and offered them $100 credit in Apple products.
Carr continues:
[W]hen you think about it, the media companies Mr. Jobs is fighting with want the opportunity to make the same mistake.
Earlier this summer, the Universal Music Group, owned by Vivendi, said it would not renew its contract with iTunes because it wanted more flexibility in setting prices. Last week, NBC Universal and Apple issued dueling press announcements, with Apple saying it would not carry television shows from the coming NBC season because the network wanted double the $1.99 price and NBC saying that was not true.
“Apple is not telling the truth. We never asked to double the wholesale price of our shows,” said Cory Shields, a spokesman for NBC Universal. “Our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.”
There’s an interesting issue here, of why Jobs won’t just let the record companies and networks do what they want. His reasons (which I attempted to limn below) are defensible; but since he makes his money from iPods, not the iTunes Store, why does he care? It could be that Jobs thinks he right. Carr’s not buying it, which is fair, but I think he missed a few things:
1) For the record, Apple does have a simple pricing strategy for the vast majority of its products, and doesn’t let wholesalers discount, either. In the past it has paid the price for this rigidity, of course.
2) When the NBC spokesperson says, “Apple is not telling the truth,” he carefully clarifies what he claims Apple is not telling the truth about. You’ll note he never says, “NBC does not, in any way, want to raise the price of its products on iTunes.” Absent that assertion, it’s reasonable to assume NBC did want to increase the price of its shows and that, when Shields talks about “making our products more attractive to consumers” he is talking about raising prices. So I think it’s NBC that is lying.
3) Then Carr makes this case:
[Jobs’] arguments against variable pricing (flat rates draw new customers and lessen the appeal of piracy) may have worked a couple years ago, but they are starting to sound a little self-serving. The Web, after all, can easily enable infinitely customized pricing. eBay proved that people will not only track prices closely, but act in their own consuming self-interest.
Should buying media be any different than bidding on a canoe or last season’s Banana Republic sweater?
First, again, it’s hard to see how Jobs’ intransigence on this issue is self-serving. Second, the appeal of piracy is not only still present, it is getting more appealing. In fact, there’s even more ethical wriggle room for consumers when it comes to video. It goes something like, “Hey, I watched this on TV, with commercials, which is the deal the networks cut with me the consumer. I made a VHS tape, but artificial constructs mean I can’t use that tape the way I want to—on my iPod for example. I might buy the DVD at some point, but I can’t play that on my iPod either. So fuck it, there’s no way I’m paying three times for the same show. I’m going to torrent a few episodes.”
Which is why, of course, buying media these days is different from buying a canoe.
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