NBC Universal Now Says It Should Be Apple's Responsibility To Stop Piracy

from the oh-please dept

Sometimes you wonder how the folks at NBC Universal get anything accomplished, when they seem totally unable to accept responsibility for the market challenges they face, and demand that everyone else fix NBC Universal's business model problems. Remember, NBC Universal has been the main supporter of the idea that ISPs should be responsible for stopping any unauthorized transfer of content. But why take chances on having just one outside party prop up your business model?

Now, NBC Universal's "chief digital officer," George Kliavkoff, is saying that it should be Apple's responsibility to stop unauthorized usage by building special antipiracy filters into iTunes. Yes, iTunes -- the service that plenty of people use in order to legally purchase content. However, since iTunes is also the connection that most people use to manage their iPod content, NBC Universal thinks Apple should somehow block the ability to get non-authorized material onto the iPod. How would they do that? How would they know that a song is authorized vs. legally ripped? Don't bother asking tough questions like that. After all, if NBC Universal actually knew how to answer them, it wouldn't be telling everyone else that they're required to fix NBC Universal's broken business model. And, of course, it apparently hasn't occurred to NBC Universal execs that if Apple actually agreed to this (which seems extremely unlikely), it would just push people to jump to other solutions to manage their music, such as Songbird.

Kliavkoff then goes on to say: "It's really difficult for us to work with any distribution partner who says 'Here's the wholesale price and the retail price,' especially when the price doesn't reflect the full value of the product." Note the careful choice of words here. Remember, we were just discussing how the entertainment industry is trying to appropriate all value that is associated with content (even if that value is because of some other vehicle) back to the content owner. Kliavkoff's statement also shows a confusion over the difference between price and value -- and because of that he seems to be assigning all the value to the content and almost none to the service and technology Apple provides (sound familiar?). Coming from a "chief digital officer" that seems troublesome for the company's digital strategies. Then again, perhaps it shouldn't be a surprise. Companies that have a "chief digital officer" are already in trouble because they're sectioning off "digital" as if it's some separate function, rather than a key component that will impact all aspects of the business.

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  1. identicon
    Michael Long, 17 Apr 2008 @ 11:53am

    Pricing

    "'Here's the wholesale price and the retail price,' especially when the price doesn't reflect the full value of the product."

    Well, IMHO they have a point, in that in nearly every other industry the publisher or manufacturer sets the wholesale price, upon which the retailer bases the retail price. And they're not trying to "appropriate" all of the value, otherwise there would be no difference between wholesale and retail prices. Why isn't Apple's value reflected in that differential? (Or in the margins of an iPod?)

    The movie industry charges, say $18 for a first-release DVD, and over time that drops to $12, and then $9, and then it may hit the $5 grocery bin. Why is music any different? Why isn't, just for the sake of argument, the newest pop song $3, and catalog music a quarter? Isn't the latest, most popular song in fact more valuable? Isn't demand higher?

    Charge more, and people will either pay the higher price, or they won't. If they don't, the studio can adjust prices accordingly, just like every other business.

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