Why NBC Ditched iTunes for Amazon

amazon-itunes.gifNews earlier this week suggested NBC pulled out of iTunes because it wanted to charge more per episode than iTunes felt comfortable. But NBC is now going with Amazon.com for the exact same price ($1.99 an episode) – source WSJ.

So we can only conclude that NBC wanted a bigger cut of the action, got ticked at iTunes, or decided the bigger bet is Amazon.com.

To my knowledge, Amazon hasn’t proved its ability to be a major distribution channel, but maybe NBC has cut a deal that doesn’t preclude it selling its content directly (remember- television folks have this naive sense that they don’t need retail channels to sell their content). Otherwise I’m having trouble understanding how NBC sees itself selling loads of downloadable content via a relatively small player in a yet-unproven distibution model.

Remember folks… this “buy a TV episode” era, in Nalts humble opinion, is short lived.

I believe that people will want their video content in one of three ways:

  1. Free- supported by ads in whatever format looks good enough (download/stream).
  2. Paid – in a high-resolution video with a beautiful 4-color box.
  3. Pirated.

Will the networks sell a lot of episodes for $1.99? Sure. It’s a fair price for 26-minutes of good content. I’ve purchased a few episodes of The Office just for fun. But I still save them all on my bloated DVR and buy them on DVD too.

Per episode sales represent a very small chunk of the revenue potential for video distribution, and Amazon is just one unproven player in this amorphous space. NBC- you’re either brilliant or you’re acting like a television network. I can’t decide.

(Note- I haven’t read any speculation on this yet… had to purge before I got into “group think”).

Author: Nalts

Hi. I'm Nalts.

16 thoughts on “Why NBC Ditched iTunes for Amazon”

  1. Does quailty really mater for humor? I think not and that is another reason why comdey is so popular online and even pirated. The simpsons movie had people who filmed it using camera phones; and while many mocked the people who posted the clips; many watched as well.

  2. Funny, I kinda like the iTunes TV episode model. I never pirate shows or movies because it’s hard to track down quality torrents and it takes a long time to download. I don’t have cable ‘cuz I almost never watch it. So now I’ve been watching TV shows that I’ve wanted to catch on DVD. But then came LOST. I couldn’t wait for the 3rd season on DVD, so I downloaded them each week from iTunes. It’s a hell of a lot cheaper than $50/month cable!

  3. Netflix recently announced that subscribers can download films from their site. If they can pull it off, they could become a fourth distribution channel in your list above.

    Another possible distribution method (covered in #2 above) is through pay-per-view mechanisms like Comcast’s On Demand system. You pay $5 a month for anytime access to NBC’s content… not a bad model (although DVR subscribers could do the same thing if they could figure out how to program their boxes)

    BTW:
    Not sure I agree with “…remember- television folks have this naive sense that they don’t need retail channels to sell their content…”

    http://www.amazon.com/Office-Season-Three-Rainn-Wilson/dp/B000SINT4S/ref=pd_bbs_sr_1/103-5805725-7329451?ie=UTF8&s=dvd&qid=1189035224&sr=1-1

  4. Not sure how I feel about this. I never use itunes except to put music on my mp3 and to rip cd’s that I own. I know tons of people that do use it though. itunes is the main reason The Office wasn’t canceled after the first season. The word of mouth it got there was so big that the fan base grew very quickly. Before reading about the change to Amazon I didn’t even know they offered such a service.

    Just found this link about the pricing NBC wanted.

    http://www.apple.com/pr/library/2007/08/31itunes.html

    If NBC got their way you would be able to download the full 30 episode season of The Office for only $149.70. I love the show and to do my part in keeping it alive and running I spent $50 on the gift set this week. $149.70 would be pushing it.

  5. whats amazon? isnt that a rain forest?,btw,check out my video of a dog going down a slide upside down and in slow motion,and turn on the audio too,man i gotta lay off the mushrooms!

  6. seriously, I have never used itunes and the more I see and hear steve jobs the more ihate appleanything.

    but I think nbc went with brand (funny how that word has made its way back into the lexicon). amazon works for and on everything – when isee ipod or ianything ithink imacapple – not everything works with a mac and more people own PCs.

    the only competitions I think amazon has brandwise is google and it’s not an impossibility for google to buy amazon.

    I also figure google will be bigger than MS in 3-5 years and if they buy a weapons plant or Boeing they will consume GE. don’t laugh

  7. I just don’t see “buying” television shows episode by episode as being successful in the marketplace for any period of time. You don’t have to pay to watch a TV show, you don’t have to pay a fee to record or Tivo a show, so why pay to download one? Because it’s on demand? It just doesn’t seem like it will ever catch on and take a major foothold.

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