NBC Universal Now Says It Should Be Apple's Responsibility To Stop Piracy
from the oh-please dept
Sometimes you wonder how the folks at NBC Universal get anything accomplished, when they seem totally unable to accept responsibility for the market challenges they face, and demand that everyone else fix NBC Universal's business model problems. Remember, NBC Universal has been the main supporter of the idea that ISPs should be responsible for stopping any unauthorized transfer of content. But why take chances on having just one outside party prop up your business model?Now, NBC Universal's "chief digital officer," George Kliavkoff, is saying that it should be Apple's responsibility to stop unauthorized usage by building special antipiracy filters into iTunes. Yes, iTunes -- the service that plenty of people use in order to legally purchase content. However, since iTunes is also the connection that most people use to manage their iPod content, NBC Universal thinks Apple should somehow block the ability to get non-authorized material onto the iPod. How would they do that? How would they know that a song is authorized vs. legally ripped? Don't bother asking tough questions like that. After all, if NBC Universal actually knew how to answer them, it wouldn't be telling everyone else that they're required to fix NBC Universal's broken business model. And, of course, it apparently hasn't occurred to NBC Universal execs that if Apple actually agreed to this (which seems extremely unlikely), it would just push people to jump to other solutions to manage their music, such as Songbird.
Kliavkoff then goes on to say: "It's really difficult for us to work with any distribution partner who says 'Here's the wholesale price and the retail price,' especially when the price doesn't reflect the full value of the product." Note the careful choice of words here. Remember, we were just discussing how the entertainment industry is trying to appropriate all value that is associated with content (even if that value is because of some other vehicle) back to the content owner. Kliavkoff's statement also shows a confusion over the difference between price and value -- and because of that he seems to be assigning all the value to the content and almost none to the service and technology Apple provides (sound familiar?). Coming from a "chief digital officer" that seems troublesome for the company's digital strategies. Then again, perhaps it shouldn't be a surprise. Companies that have a "chief digital officer" are already in trouble because they're sectioning off "digital" as if it's some separate function, rather than a key component that will impact all aspects of the business.
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Filed Under: blame, business models, economics, itunes, piracy, responsibility
Companies: apple, nbc universal
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Basically, NBC wants Apple to institute the same restrictions that have caused all the other content providers to fail miserably.
Kliavkoff even referenced the recording industry when complaining about pricing:
The music industry guys would have something to say about how the pricing has affected their product over the last few years
Of course, he blissfully ignores the fact that Apple essentially rescued the labels from the constant failures of their own online ventures, such as PressPlay and MusicNet.
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Too many chiefs.
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Too many chiefs.
not computers.
It's up to the consumer to determine the
value of a product.
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next
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Pricing
Well, IMHO they have a point, in that in nearly every other industry the publisher or manufacturer sets the wholesale price, upon which the retailer bases the retail price. And they're not trying to "appropriate" all of the value, otherwise there would be no difference between wholesale and retail prices. Why isn't Apple's value reflected in that differential? (Or in the margins of an iPod?)
The movie industry charges, say $18 for a first-release DVD, and over time that drops to $12, and then $9, and then it may hit the $5 grocery bin. Why is music any different? Why isn't, just for the sake of argument, the newest pop song $3, and catalog music a quarter? Isn't the latest, most popular song in fact more valuable? Isn't demand higher?
Charge more, and people will either pay the higher price, or they won't. If they don't, the studio can adjust prices accordingly, just like every other business.
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Re: Pricing
That being said, the music industry needs to recognize they can't set a flat wholesale price for every song either. They need to discount the deep cuts in their catalog.
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Re: Pricing
No it's not. Why would it be? There are many older classical recordings that are far more valuable than any recent ones. And the new DVD prices are set higher even if they are not popular. Besides, what does popularity have to do with selling digital media? It's not like the law of supply and demand matters.
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Bad NBC-U, BAD!!!
As for Apple, if they said "OK" to this proposal, people will just leave and go somewhere else (like Songbird, as Mike suggested [is it me, or does Songbird look oddly similar to iTunes?])
I'll just go to my local radio station's website. They sell DRM-free tracks for $0.99, and have many songs that iTunes doesn't have.
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Re: Re: Pricing
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Re: Pricing
Actually, it does, but here the price/value relationship matters more. They have a "product" that's in demand. Because more people want it, they may be able to set a higher price, because more people may be willing to pay that price in order to have that music now, and to have it when everyone else has it, is listening to it, and is talking about it.
in short, their product has both value and a price. You, in turn, decide if that value is worth the price asked.
You're implying that bits are just bits. They're not. I have a 15GB file that's full of bits I'd be happy to sell you. But since all of the bits are random, I doubt you're going to want to pay me my asking price of $20.
But let that be the entire last season of Heroes, and you might reconsider. If you're a Heroes fan, and you missed that last half of the season when you were out of the country, $20 may seem like a bargain.
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Re: Bad NBC-U, BAD!!!
From reading up on that program, that seems to be quite intentional.
And I'd like to think Mike for pointing that program out to me. I've been looking for an iTunes replacement. Songbird doesn't seem to be up to snuff, but it's only version 0.5. It shows quite a bit of potential.
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Re: Pricing
They had every opportunity to set their own prices when they were trying to set up their own distribution services. If they want access to iTunes customers, for better or worse they have to play by Apple's rules. The standardized pricing and relaxed DRM were set up to eliminate the two main factors that caused the recording industries previous online efforts to fail. The fact that those are the two things NBC is complaining about should tell you that content providers still haven't learned their lesson.
The content producers are still perfectly capable of setting their own pricing. All they have to do start their own music service and potentially lose their built-in iTunes customer base if they implement DRM. They're also going to have to fight against the customers' now built-in expectations of pricing.
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Price is determined by Apple
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Re: Pete
Don't disagree that the royalty length is too high, but don't underestimate effort it takes to record that album; months not weeks. The rental costs for studio space for that time alone can be huge, and thats not forgetting the associated capital costs in equipment and production. Generally, these costs come out of the artists royalties.
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No, don't complain!
The only reason that they haven't fallen already is that the mainstream public doesn't realize what's really going on here. But if you screw with thier iTunes, they sure will.
Muahahahahahahahaha!
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Actually, Why Not
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Do they want my business ?
Doesn't look like it.
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Please sell some content... please?
Oh well. Hey, check out my other commentary about value vs cost I posted yesterday at this link It fits this new discussion nicely-
http://www.techdirt.com/article.php?sid=20080411/153919828#c155
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Re: Actually, Why Not
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Letting Record company set the wholesale price.
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Reality
But when the DRM stops even the average user from using it, he's going to start looking for ways around it. E.g. downloading it. But if he's already bought it, he has a license to use it, so downloading it may not actually be illegal...unless it is considered "circumvision of DRM"...
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