Imagine that you are a big shot executive at NBC and you need to make a decision to renew or not renew your distribution agreement with Apple's itunes. NBC is a media company. They sell entertainment, news, schmaltz..you get the idea. The old way of doing this was through 'box sets', DVDs at Wal-Mart, Target or some other retailer. iTunes sells your product 24hrs a day, 7 days a week, complete with real time sales figures, demographics, metrics (this is worth a lot of $money, kids). And nothing is lost or stolen. NBC, CBS, FOX and the other cable networks all offer programming via iTunes for about $1.99 per episode, retail. And remember we (NBC) represent about 40% of the iTune videos sold!
So, what do you do?
(A) Renew the agreement and promote current offerings on your network.
(B) Ask for more money, maybe sharing some of the marketing costs.
(C) Accuse ipod owners and iTune users as being criminals and make DRM demands...oh and ask for a 100% increase in your 'cut'.
Well, this being Hollywood and the closest source of intelligence is La Jolla or San Jose, good decision making is never their strengths. So NBC wants to move its offerings to hulu.com (who?)
and charge above and beyond the usual $1.99...good luck. 99%+ of your market is familiar with the iTunes brand. Who's heard of Hulu.com? Up until a few months ago, it was a site hosting pics of some tech-guy's daughters and pets. I'm sure he got a $check out of the deal...so hats off to him.
The word of the day at NBC should be Bittorrent.
hulu.com...
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