Forrester Research firm analyst James McQuivey thinks that Apple is on the losing end of the NBC/Apple troubles, and that they need NBC back – FAST. “Don’t let the Macgeeks posting angry blogs against NBC fool you,” McQuivey’s report reads, “The loser here is Apple, which relies on NBC Universal to deliver 30 [percent] of video download sales. Any supposed backlash against NBC will not materialize because NBC has made its content available, for free, on NBC.com and six other major portals sites.”
He thinks that Apple needs NBC back — and FAST.
He’s wrong, though. Here’s why.
For Apple to get NBC back in the fold for iTunes store downloads, Apple is going to have to make some serious concessions to NBC/Universal.
I wonder if this analyst has ever heard of a little thing called the domino effect?
Because what would happen here is that if Apple caved to NBC for their television programming, then not only would other networks follow suit in demanding the same deal, but that effect could even tumble over into music – since Universal is one of, if not THE, largest music companies in the world.
For Apple to retain control over pricing in the iTunes store, it is essential that they not give in to NBC’s demands. The loss of that 30% of revenue would be nothing compared to the loss of control over the pricing within the iTunes store.
Apple has already recently made concessions within the iTunes store for feature film pricing, which could negatively impact the entire pricing structure, which makes it all the more essential that they not back down on this issue now.
As McQuivey points out, NBCs content is going to be available in no less than 6 other places or methods. Those other download methods would not go away if Apple suddenly let NBC charge more for episode downloads – so that even lessens the chance for Apple to retain that ever important 30% of sales. In fact, it’s highly likely that even if NBC shows had stayed in the Apple store, that sales numbers would drop dramatically from NBC’s half dozen alternative methods of download (not counting Bittorrent).
NBC is going to have to go out into the world and try this thing on their own. If they are successful, then we’ll probably never buy another NBC show in iTunes – and I can live with that. If there not (and with the ridiculous DRM – and constant commercials on their other offerings, how could they be?) then NBC shows will one day return to iTunes.
We’ll just have to wait this one out.