Does Universal’s Participation in iTunes Movie Rentals Signal an End to the NBCU/Apple Cold War?
Last November, a lot was going on for NBC-Universal’s Jeff Zucker. The same week as he was set to launch Hulu, NBCU/Fox’s online TV syndication service, the writers strike began over a lack of terms in the writers guild contracts for payment based upon online content, which is expected to bring in around $1 billion US to the TV studios this year alone, but is considered “promotional content” </pitch for striking writers>.
As November began, Zucker sat down for an industry interview with the New Yorker’s Ken Auletta just as NBCU’s contract with Apple’s iTunes was set to expire. Zucker seemed intent on breaking Apple’s newfound prominence in the media industry, and reestablishing the studios as the designators of professional video’s business model. Just like with the record labels, Apple has refused to set a floating pricepoint for TV content, even on a trial basis, and while the $1.99 price won’t turn a $100 dollar bill into 100 pennies, Zucker is afraid it might turn into 100 nickels, claiming that in the previous year, NBCU had made only $15 million from iTunes distribution.
So NBCU packed up shop, and let its contract expire taking with it 40% of the TV/Movie content from iTunes (Zucker’s numbers, not mine). In a prelude to the writers strike, when NBC announced it would let its contract expire, Apple expected the public to take its side as the defender of content against the miserly NBCU, who would eventually be forced to capitulate (as Steve Jobs joked on stage when he announced ringtone support for the iPhone).
Well it looks like Zucker might be willing to “give peace a chance”, at least in terms of video rentals, as Universal is (apparently) on board with Apple’s new service. As of writing, I’m unable to find any Universal films on iTunes, but the majority of rental titles available now seem to be from Fox and Disney studios.
If Zucker wasn’t willing to budge, saying “We know that Apple has destroyed the music business – in terms of pricing – and if we don’t take control, they’ll do the same thing on the video side,” did Jobs? Or was it Zucker, who realized that the new AppleTV was in fact that iPod of the living room, and that leaving NBCU out of the Movie Rental service was tantamount to only releasing music on CD’s and Microsoft DRM download services?
More importantly, does this mean I’ll be able to start paying for The Office again, so I don’t have to be connected over broadband to watch on Hulu or acquire it through illicit means to watch untethered? Here’s to hoping iTunes Movie Rentals floats all boats, and that NBCU, along with all the other networks/traditional media groups, manage to realize that there are alternate revenue streams outside of just delivering eyeballs to advertisers. The web did. It grew up, became a lot more valuable, and made a lot more in the process.
