Print 61 comment(s) - last by SavagePotato.. on Nov 3 at 12:26 PM

"So that's a 'No' on a cut of the iPod hardware sales? Well, I had to ask."  (Source: NBC)
New allegations emerge which indicate more possible causes for the NBC and Apple split.

The story of NBC and iTunes' breakup is well known to DailyTech regulars.  Back in August DailyTech first reported the split.  It then went on to cover Apple's decision to prematurely drop its contract with NBC, which would have last until year's end. 
The coverage included a blast at NBC in which Apple alleged that the split resulted from NBC's greed $4.99 per episode pricing demands.  NBC fired back, finding a new home at Amazon's new Unbox download service.

NBC previously stated that it wanted to be able to offer free pilot episodes, control the packaging of content and have more flexibility in pricing.  It also wanted additional protection from piracy.  It stated that Apple was unwilling to work with it on these issues.

Now new allegations have emerged, which may provide shocking testimony to NBC's audacity, if they are true.

NBC President Jeff Zucker, according to a report in Variety, allegedly shared with The New Yorker's Ken Auletta during a benefit for former football powerhouse Syracuse University that NBC had wanted a cut of every iPod Apple sold as part of NBC's negotiations to renew their contract. 

Zucker is quoted as saying, "Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money.  They did not want to share in what they were making off the hardware or allow us to adjust pricing."

This revelation is being met with incredulity in the media industry.  After all, NBC was not alone in most of its complaints against Apple -- for example, iTunes’ fixed price of $1.99 per episode.  However, no other television network would dare make as audacious a demand as a cut of hardware revenues.

More surprising is how little money NBC was really making for Apple and itself.  In the first year of its contract Zucker is quoted as placing its iTunes revenue $15 million USD.  In comparison to the $16 billion USD in revenue that NBC Universal, this is only 0.3 percent of the company's total revenue.

It was noted that NBC Universal's theme park business did $100 million USD in revenue. On the other hand, this does mean that iTunes sold approximately 7.5 million NBC TV episodes.

It seems relatively obvious that such demands were the realm of fantasy.  Otherwise every television maker from Sony to LG would have to pay a slice to NBC, Fox and the other studios.  The “iDevices” would have to pay cuts to Fox, ABC and many more.  This is obviously an untenable business model, considering the drive for low cost expensive hardware that often is only slightly profitable at best.

Other networks such as FOX and ABC have not dared make such demands.

NBC has a chance to prove itself on its own with the new HULA service it is starting with FOX (coverage later today at DailyTech), its deal with Amazon Unbox and its NBC Direct service, reported about at DailyTech earlier this month.

However, until NBC shows a far larger business volume, its demands may appear undeniably like gold-digging of a hardware giant.

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RE: Chuck
By borismkv on 10/31/2007 2:30:59 PM , Rating: 1
You do realize that any time you correct someone in any way, what they hear ultimately becomes "It's a hard drive, you idiot" and not what you actually say, right? When you correct them, you put yourself above them. People don't trust people who are above them or below them. That's why poor people hate rich people, rich people hate poor people, liberals hate conservatives, conservatives hate liberals, and it's also why you seem to think that because a person hasn't spent their lives taking apart and rebuilding computers over and over again that that makes them "stupid." It's also why those same people refuse to accept your correction and continue calling a computer a hard drive.

RE: Chuck
By SavagePotato on 10/31/07, Rating: 0
RE: Chuck
By borismkv on 10/31/2007 6:19:46 PM , Rating: 2
Alright, this is the last thing I'm gonna say cause I've wasted too much of my time on this thread. Most of the people who are "being ignorant and refusing to learn" are doing so because they are frustrated with having to deal with the technology. More often than not they are frustrated because they've had to deal with someone who takes it upon themselves to try and educate them, but rather than having patience and trying to look at that technology from the user's perspective, they decide to use jargon or bludgeon the users with facts, like what the difference is between a tower and a hard drive. Many of them just simply don't have the time to deal with it or make the connections required to actually learn about the technology.

The point I've been trying to make is that so many technicians complain about how stupid some users can be sometimes. However, to me it seems that that stupidity is due more to the technicians not knowing how to help those users learn about the technology with patience and kindness. When I work with people, I always remind myself that it's my job to understand all of this stuff and help it work for the users. It isn't their job to understand it. They have a different job, and every minute I spend trying to correct them or teach them stuff they don't really want to know in the first place is time they cannot spend doing their jobs, and it's rude of me to assume that it okay for me to spend their time making my job easier, even if it eventually makes theirs less of a hassle. If they want to know some of the stuff I know, they'll ask, and I'll be glad to spend some time helping them understand everything. Otherwise, I'm going to spend my time making it work so they can do their jobs without having to worry about whether or not it's going to work.

RE: Chuck
By SavagePotato on 10/31/07, Rating: 0
RE: Chuck
By borismkv on 11/1/2007 1:12:43 AM , Rating: 2
Well, I've been doing it for about 12 years and I haven't gotten tired of it yet...guess you're just in the wrong industry.

RE: Chuck
By SavagePotato on 11/1/2007 10:25:30 AM , Rating: 2
If you are someone that enjoys having to talk to adults as if they are 2 years old, I'm honestly realy happy for you.

Back here in reality bills still need to get payed and work still needs to be done to do it. When it comes to working with computers I enjoy my job. That doesn't mean I have to enjoy talking to people that like to act like a baby when they are a full grown adult and come away from it feeling enriched somehow like you do.

RE: Chuck
By MPE on 11/2/2007 10:08:27 AM , Rating: 2
Just fix the stupid computer. That is what you are paid to do. Stop educating people who is paying you. Educate them when you are paying them. That is how the world works.

Your obsession, based on that assumes computers are simple machines, is classic nerd impotence syndrome.

Get a job of power instead of being exploited. Then again, you seem to be convinced that brain power alone makes you happy or better than anyone else. Hint: Unless you are Einstein - brain power is not enough. I'm sure even smart people from Google have realized that by now.

RE: Chuck
By SavagePotato on 11/3/07, Rating: 0
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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