Friday, August 31, 2007

NBC To Pull Shows from iTunes

I'm sad today, because I just found out that come December, I won't be able to watch Battlestar Galactica anymore. Oh NBC will still be airing new episodes, and it will be available on SciFi, but NBC announced today that they will be pulling their content from iTunes.

See here's my problem. I'm a new father. I work full time. This leaves me precious little time to spend on entertainment. That time doesn't necessarily fall Friday nights at 10:00pm. I know, I should just get digital cable and a TiVo. However a digital cable runs me about $50 / month, and a minimum 1yr TiVo contract is another $300. That's $900 / year (plus taxes, fees, media access charges, etc) to watch what, maybe 24 episodes? That's about $37 per episode. I can wait until the season is over and buy the episodes on DVD, but that's a long time to wait.

No offense, but I preferred the $2 I paid to get each episode off iTunes the day after it aired. (Even cheaper if you get a season pass).

Media companies are facing a hard future. And they seem to be ignoring basic economics.

Demand is Dropping
I have limited time and dollars to spend on entertainment. Frankly, there's just a lot more compelling entertainment options out there today than a decade ago. In the olden days before the internet, you had basically Television, Movies, Books Music, and the Arts. Today you have YouTube, World of Warcraft, Facebook, Xbox, PS3s, Wiis, the list goes on. The overall supply of entertainment is increasing, and as a result, demand for any one of the options will be diluted.

Faced with falling demand, the large media companies are desperately trying to cling to their old profit margins the only way they know how, try and wring every last dime out of anyone they can. Yet this is exactly the wrong thing to do, as any first year Economics student will tell you. If you have infinite supply, and you want to raise demand, you lower prices.

I like Battelstar Galactica, but after the birth of our first child, I canceled our cable subscription. I just don't have the time to sit down and watch television anymore. Somehow I don't think I'm alone in this decision. The shows I really do enjoy, I try and buy off iTunes and watch them here and there as I find time. I'll be sad if I can no longer watch these shows because large media companies feel I'm not giving them enough money. It looks like instead of getting $2 per episode out of me, they'll be getting zero. Oh well, I have a lot of good books to catch up on.

It looks like Apple decided to just cancel NBC's contract now, rather than leave consumers with only half a season. Just another example of Apple looking at things from a constomer perspective. Wouldn't it be great if more companies did that?

Apple's Press Release on the topic.


Sam Douglas said...

I agree with what you wrote - I think there are companies out there who know that its in their best Apple - but there are a hell of a lot of old school companies like Microsoft, NBC, the RIAA etc that just dont seem to get it - they're increasingly isolating themselves - they will have gained too much negative reputation to claw it back quickly with a few PR exercises - its becoming ingrained in peoples psyche now - and all these young'uns who are effected by this too are tomorrows consumers - and they will vote with their feet.

Anonymous said...

I just don't know if it will all be enough to wake them up. I must admit to watching a number of shows from NBC and more from SciFi and USA as well as Universal HD.

I have to pay for their stations with DirectTV already and I know that they can track if I watch them through the DVR I use. So do I bite the bullet and remove the shows from my DVR to try to make a point?

I'll start pulling all of my season passes and try to send a letter/email to the company. What else can we do?