Ut oh. Apple’s stock is eventually gonna drop (not right now, but in the coming years). You watch. iTunes is gonna stop being the one main source for music and tv content downloads. The entertainment industry is catching on that iTunes isn’t the only way to sell their music and tv shows. Variety.com reports:
NBC Universal topper Jeff Zucker warned Monday that new digital business models are turning media revenues “from dollars into pennies” and revealed that NBC U booked just $15 million in revenue during the last year of its deal with Apple’s iTunes.
Interviewed by the New Yorker’s Ken Auletta at a benefit for Syracuse U.’s Newhouse School, Zucker described the impasse that led to NBC U’s decision not to renew its current iTunes deal, which expires in December.
NBC U wanted to explore higher pricing for hit shows such as “Heroes” by raising the price from Apple’s standard $1.99 to $2.99 on an experimental basis.
“We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.”
In lieu of more flexibility on pricing, NBC U sought a cut of Apple’s hardware sales.
“Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.”
NBC Universal programming accounted for 40% of iTunes’ video sales. Zucker used iTunes as an example of the kind of digital business model that, he asserted, is corrosive to the media business.
“We don’t want to replace the dollars we were making in the analog world with pennies on the digital side,” he said.
NBC Universal topper Jeff Zucker warned Monday that new digital business models are turning media revenues “from dollars into pennies” and revealed that NBC U booked just $15 million in revenue during the last year of its deal with Apple’s iTunes.To read the rest of the article, go to: Zucker says Apple deal rotten. They don’t mention anything about Apple’s stock going down, but I have a feeling that iTunes isn’t going to be the only main source for video and music content. Apple innovated, and someone will eventually provide another platform for competition.
In other news … the sun is going to burn out one day (not right now, but in the coming years)
Nice analogy, abhay!
It’s been Apple’s life story to innovate and have others follow suit only to leave Apple in the dust.
If you have followed Zucker’s career at all at NBC, you’ll realize that he’s not been the brightest star in the bunch… just a person who has been in the right place at the right time in regards to promotions. I would agree that iTunes isn’t going to be the clearing house it once was for content, but that money isn’t going to go elsewhere. Piracy is much cheaper.