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NBC Chief Admits He Wants to Overcharge Customers

October 30th, 2007

Jeff Zucker, the CEO of NBC Universal, more or less admitted that he wants to charge you a lot more for listening to music and watching TV shows over the Internet:

“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 said at a breakfast hosted by Syracuse’s Newhouse School of Communications.

NBC Universal recently snubbed Apple by not only pulling its TV selection from the iTunes Store and instead offering it via Amazon.com’s Unbox service, but it also started offering its music catalog on Amazon’s download service in the form of high-quality DRM-free tracks selling at 89 cents apiece, while pulling out of long-term music sales with Apple.

All the content producers have been claiming that they want more “flexibility” in their pricing, with the ability to “charge less” for some content, always emphasizing the “value” to the consumer. Well, it certainly seems like that’s what they’re trying to do–DRM-free songs at 256kbps for 89 cents? Free TV shows with just some advertising thrown in?

The thing is, Zucker laid out his game plan in his statement today: Apple “destroyed” the music biz by establishing a dollar-per-track pricing system that everyone now expects; consumers won’t go for $2 or more for a song any more, meaning that Zucker and his pals will have to settle for merely exorbitant profits instead of massively obscene profits, while stiffing the artists.

But there’s hope for TV and movies, Zucker is saying: Apple hasn’t won out that market yet, so there’s hope that we can charge $3, or maybe $5 per TV show!

So why aren’t they doing it already? What’s with the idea of selling better-quality songs for less, or TV shows at the same price or for free with ads? To destroy Apple’s grip on the market, of course. And that’s the danger of going over to Unbox or other services right now: do that, and you are more or less clicking on a check box next to the statement “I accept these terms”–but when you read the terms, they say that you agree to buying slightly cheaper stuff today in exchange for getting ripped off down the road. Not a good deal.

In the meantime, what is NBC paying the “artists” that they always mention when they blast pirates for depriving people of profits? Well, for a one-season DVD set of a TV series which brings in $40 a pop, NBC and the other studios pay writersfour cents. And they are risking a strike by writers because they want to refuse upping that payment to eight cents. They don’t want to pay a writer even two-tenths of one percent of the income from a sale.

It doesn’t take a genius to see what the whole motivation is for the studios, nor that they are endlessly greedy bastards who would charge you ten times more if they could figure out a way. While that does not make Steve Jobs a saint (he also would like to charge you as much as possible), at least the interests of Apple’s media distribution service coincide with yours–to charge less for music and video. And that’s not a terrible reason to stick with their service.

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