Letters to the Editor
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There are alternatives
Not perfect yet, but give them time. NBC is hoping that the bad taste they are leaving in people's mouths will be gone before it can bite them in the ass.
Right now iTunes is the best solution for a lot of people, because the interface is killer. But they are leaving that solution anyway.
Tivo and DVR solutions from content providers are good, but they still record commercials (and always will thanks to the ReplayTV decision) and even the Tivo interface is too confusing for some people. All other commercially available DVR interfaces I have seen just suck.
MythTV. Build your own DVR with a couple of terabytes of storage for the cost of a high-end DVR, including over the air HD. And it deletes the commercials very effectively and easily - click one checkbox one time and you'll never see another ad. Yes, you have to be able to install Linux, but rolling your own is now about as easy as installing Windows. MythTV is how a lot of BitTorrent content is being created.
And BitTorrent. At this point BT is just a standardized file-naming structure away from being Tivo. uTorrent already has an RSS scraper built in. If the file names become organized enough to eliminate the need for a doctorate in regular expressions to get it to work, which is a lot more likely than it might sound, people will be able to simply add a show to their favorites and watch it appear on their system later.
The point is that you have some powerful enities working against NBC (and the other broadcasters) because their users want simpler and easier ways to record and timeshift. NBC would be wise to avoid taking advantage of current and possibly short lived gaps between technology and user ability and start getting ready for the day when the only control they have over their content will be how happy they can make people with it.
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Remeber when VHS movies sold for $75?
When VCRs were new, the studios used to sell their movies for ludicrous prices and argued that people not buying at that price meant that, "nobody wanted to buy them." In reality it was the studios trying to stifle the new home-viewing market to prop up theatre revenues and ad revenues in showing their films on commercial TV. Of course when DVDs hit the market 20 years later at $15 a pop, peoeple bought whoile libraries of movies and TV shows.
Now the netowrks are panicing over the reality that they are dinosaurs who add ZERO value to the media equation. The simple fact is that, with things like iTunes, DVDs and broadband internet, people can easily buy their entertainment directly from the producers. There is no longer any need for the nets. And this has them terrified of losing their phony-baloney jobs.
Seriously, what value do the networks add? With TiVO, nobody watches their obsessively crafted scheduling ploys designed to maximize viewership by freezing out competitive shows that people might want to watch on other nets. Nobody but them cares about the infantile pissing contests around who "Owns" what night of the week. With no public benefit and no economic benefits accruing to viewers from the nets, why even have them?
The $5 TV show, like the $75 movie, is NBC's attempt to stifle online buying of "their" TV shows -- remember that NBC produces almost none of "their" programming other than news and talks shows, they lease them from the actual producers. The producers should just make the nets a small part of their operations. Lease to NBC and Apple at similar prices and let the market decide.
But this is modern American capitalism!! Markets are only free if billionaires control them. We can't have the stupid proles making buying choices on their own! That would be... socialism! Or something bad like that!
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I bet that was a fun meeting
I have this image of a bunch of Jack Donaghy's sitting around in a room and trying to come up with a new price. Meanwhile some under 35 exec slowly tries to convince them that they are insane. This would be like someone in the late 80s deciding that $15 cds are too cheap and selling them for $35 instead. "Look people will pay $35 for a Rick Astley CD."
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What's the problem?
One the major tenets of a free market system is that the seller of goods or services gets to set the price. Then the market decides if that price is viable.
In this respect Apple is behaving like Wal-mart; it is using its near monopoly status to dictate price to its wholesale suppliers.
Once a Wal-mart is established in a town, most competition (in the form of smaller stores owned by locals) is suppressed and the local stores go out of business because they can't compete with Wal-mart's prices.
When Apple uses its clout to keep prices low, they are also suppressing competition. It's very hard for any company to start up and compete with Apple's low prices for music and video, plus develop the hardware and software infrastructure needed to be viable in the market. Companies that are already in the market have to compete with Apple's dictated low prices so there is virtually no margin available for any profit.
However this doesn't mean that you are saving money with Apple. While the cost of music and video is lower at Apple, the cost of Apple's iPod models is relatively high. When you buy an iPod the profit to Apple is quite high compared to the cost of goods. This is how Apple makes it money.
And this is the crux of the media companies' complaints. No one tells Apple what Apple's prices should be. Because Apple controls its hardware manufacturing and distribution channels, it has complete autonomy in setting its own prices.
The effect is (just like Wal-mart) that music and video are used as near loss leaders to sell iPods and other hardware. Apple still makes a handsome profit on the hardware, but many of the media companies who supply the music and video feel the Apple system is unfair.
Despite the hysterical rants you hear online about the "outrageous prices" that media companies want to charge for their product, the truth is actually much less dramatic.
Many of these companies want to experiment with variable pricing based on the life cycle of a particular show or album/single. For example, if you want the new Avril Lavigne single on the day of its release, you might have to pay $1.49. Three months later the same track might be $0.99. A year later, it might be $0.79.
There has always been a certain segment of the population that will pay almost anything to have a product first. In the past the media companies have depended on this phenomena to shape their profits. In fact, almost all companies cater to this segment of the population.
You know that you expect to pay more for a movie's opening night in a theater than what you pay when it hits cable VOD a few month later. You know that if you buy a car on the first month it is introduced you will pay more than if you wait until the August before the new model year.
It's no different with media. The market of supply and demand decides these things, and companies should be allowed to experiment with pricing models.
It's not "corporate greed" or "price gouging." No body is going to die if the new Avril Lavigne's single costs $1.49 for a a couple of months. Media are not "essential goods and services" needed to sustain life!
Your choice as a consumer is either to play or not play. Decide with your wallet. But don't blame companies for wanting to do something that is their right under our free market system.