NBC U and Apple ended a nine-month stalemate when Steve Jobs announced that NBC shows were coming back to iTunes. The obvious next question: who blinked?
NBC U chief Jeff Zucker has said the network’s bottom line is that it wanted some flexibility on pricing from Apple. “We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” Zucker said last fall, as well as the ability to bundle shows in differently-priced packages.
He didn’t get that. What he did get, however, was three price points for TV shows instead of one: 99 cents for catalogue shows, $1.99 for standard-def TV, and $2.99 for high-def shows. Zucker told CNBC’s Maria Bartiromo this fits his definition of “variable pricing:”
What happened a year ago is we got into a dispute over pricing and thought there should be variable pricing on the television content in the iTunes store. They didn’t want to, we withdrew our content. The fact is we have variable pricing and the programs will be on there at the 99 cents price point, $1.99 price point, and for HD episodes of the program, that will cost $2.99. So basically we were able to achieve our goal that not all contents should be of the same value. When we achieved that, we were happy to be on iTunes.
But from the looks of it, Steve Jobs maintains complete control of pricing, and will likely offer the three pricing levels to all studios with content on iTunes. And Zucker didn’t get as much pricing power as HBO (TWX), which is charging $2.99 for standard-def episodes of The Sopranos and Rome.
We know that iTunes is basically a non-business for the studios, so the timing would suggest NBC came back primarily to be able to use iTunes as another promotional vehicle for NBC’s fall shows, which it desperately needs to perform — on television.
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