Who sets prices?

NOTE - The photo is not Jeff Zucker (but it could be)

NBC Universal seems to be blowing a gasket. On Sunday the Chief of the organization said "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" Mr. Zucker, meet reality (oh no, that may not be possible.) In the press reports of the dispute between NBC and Apple there have been claims about pricing disputes. Zucker seems to have said this is all about pricing despite his denials “We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.” He also said "They did not want to share in what they were making off the hardware or allow us to adjust pricing." It is odd that NBC, although they once did do this, does not derive revenue from TV or cable makers but Zucker seems to think he can ask for it from Apple. What nonsense.

NBC has decided to move their content to something called HULU.com (Great name Jeff - wonder how much your image consultants charged you for that brainstorm.) CBS and Fox have said they are happy with the current arrangements.

CBSs current chief seems to get the joke here. He was quoted earlier as understanding that the iTunes marketplace is as much a promotional vehicle as a revenue source. Fox's chief suggested that they would like a bit larger hand in determining price. But most content providers understand that electronic distribution reduces their costs in a couple of ways. No DVDs, no retail chain, no inventory. At the same time the distribution scheme allows people to get content 24-7 and to link simply because they are on the site. For example, at one point I wanted to find out what my daughter's interest in 24 was - went on iTunes and found an episode - then found out I could get a season pass and bought the entire first season. That would not have happened in a physical store and it certainly would not happen in a TV only related site like Hulu. Right now, NBC gets zip from all the TIVO recording that goes on. Any person who wants to can (and should be able to) convert the TIVO file into an MP3 so iTunes is adding a small amount of incremental revenue. NBC should also recognize that iTunes has been a great place to build audience. They have released pilot editions of new series where some people are lured into watching the series in the original. That helps build their Neilsens. But again Zucker does not seem to get the new world of media. It is strange that the CEO of a media company wants to live in the last generation of technology, but not surprising.

There is a real question about the appropriate price for TV shows on the net. Individual episodes should be less considerably than a movie. And the sum of the season should be considerably less than the price they get when they give you physical media. It might be slightly higher than $1.99 but it is not even close to the range that NBC seems to think they want. Jeff Zucker seems to have the naive notion that their whims will control pricing. Just ask the buggy whip manufacturers how much they are making now. They were pretty firm on price when technology moved them aside.