NBCU & Amazon – Small Time Versus the Torrent of iTunes

In the midst of the corporate gamesmanship negotiations between NBCU & Apple, on the surface, NBCU’s linkup with Amazon might seem to have major impact.

After all, Amazon is the leading ecommerce site on the internet in traffic and sales but that pretty much means nothing when it comes to online on-demand entertainment.

Sure, Apple loses a couple tens of millions of dollars of revenue and a few million in profits but how many iPod sales will they really lose? A couple dozen execs at NBC who can’t expense one anymore? Apple could make up the revenue in minutes by releasing a special “High School Musical” video iPod.

While online video sales have not amounted to much (Apple reported 95 million movies/TV shows sold), the Hollywood gang don’t seem to understand that they can no longer control distribution.

And really, they’ve always been confused thinking that a tight grip on distribution meant more profits. At first, they tried to control all the theaters – but if people do not want to see a movie, it just doesn’t matter if it’s the only one playing at a theater (as it used to be – imagine that – one theater, one movie – freaky!) – for the longest time, they refused to sell movies to TV networks because of course, seeing a movie from 1938 on TV would cause people not to go out and see “To Catch a Thief.” But after they opened up to selling their old films to TV – lo and behold, hey, all those reels of films in our vaults that we were thinking about burning – they’re actually worth something! How about that!

Then when home video came along – of course, they panicked and sued that it illegal to tape a show airing IN YOUR HOUSE … of course, the Supreme Court ruled correctly – the twit MPAA head called it a disaster and said it would be the end of the film industry (his words were something to the effect that the VCR was Jack the Ripper … with the VCR being a deranged slasher of prostitutes and Hollywood … um being … Jackie, boy – you sure you want to use that analogy?) Anyway, lo and behold, the VCR figuratively and literally SAVES the Hollywood industry – turning it from a feast or famine toy-industry-ride-the-hot-hit and die next year into a real business Wall Street not only loved but enough to give up jobs to join the studios. There are financial quarters where a home video division of a major studio can gross $1+ BILLION dollars in sales!

So, by the 1980’s, you would think they learned – embrace new technology. All is good. All it will do is MAKE US MORE MONEY.

But right after that, they hated the DVD at first. Really, they were scared consumers would get confused since VHS was doing so well. Again, run scared first, panic second and then try to run away some more. Somewhere in 8th or 9th place was accept technology.

They apparently are also clueless about consumers. Consumers won’t buy films to watch over & over again. Consumers won’t buy TV shows, etc, etc …

They don’t seem to realize their immediate reaction to technology is ALWAYS PRETTY MUCH WRONG.

And to complete the cycle of how wrong they are – they keep embracing technology that consumers do NOT want like copy-protected CD’s or WMA online tracks that are restricted to two computers or the idiotic (original) Divx DVD format where you could rent silver discs that played for two days or gold ones for 30 days … and oh, never mind. Of course, 4 years ago, Disney and others tried to revive the disposable DVD – once it hit air, you had 48 hours to watch it. There are prisons with less restrictions.

They should just stick to making movies and TV shows and not worry their botox heads about anything else. Let the consumers decide because ultimately, we will PAY for everything many times as long AS YOU LET US!

We’ll pay to see a movie, we’ll pay for broadband to download your ads (in the form of trailers), we’ll pay for cable TV to watch it again, we’ll buy the video and years later, we’ll rent or buy the DVD. We’ll lose the damn DVD and buy another one. We’ll buy the Special Edition. We’ll buy the Director’s Cut. We’ll buy the Unrated Director’s Cut. We’ll buy the 5th Anniversary Special Edition. We’ll lose that and buy the box set. We’ll buy one for the car and one for the vacation house. We’ll buy the Blu-Ray version, the iTunes version and the airplane version. Is that good enough for you? But the SECOND you make it inconvenient for us, we’ll torrent it or just record it ourselves.

That’s the bottom line.

And the Amazon TiVo Unbox thing – nice but not exactly as easy as plugging in your iPod.

The Unbox thing is straightforward but so far, PC users that have the ability and an interest to download a movie playing app to play downloaded movies on their PC’s have not been a huge number. (Unbox does not work on a Mac).

It’s presumably as successful as MovieLink, Vongo, the Netflix version or the dozen or so PC choices – not very.

It’s nice but a hassle and if you’re sitting in front of your PC, you might as well sit in front of your TV.

To get it on your Tivo via Amazon Unbox, you need a Series 3 Tivo Box and a subscription – again, a nice add on feature but not exactly something you can pick up anywhere, plug it into your computer, buy, sync and be ready to go.

Distributors like NBCU get confused when they see the hurdles that viewers will go through with torrents and think that’s the normal course of action – they are forgetting TWO key things:

TORRENT is FREE
TORRENT is a little dangerous and has some cachet.

If you replace FREE with $1.99 or $4.99, suddenly, consumers don’t want to work that hard.

They return to the normal course of action – what is CONVENIENT at the RIGHT PRICE.

We live in an on-demand world.

And people don’t just want convenience, people want convenience 21st century style. People don’t want a frozen pizza anymore. They want a drive-through where they can get almond chicken, roasted vegetables and vegan apple pie by driving through somewhere and putting it in a microwave for 2 minutes.

They want to watch whatever, when-ever. If the networks or the distributors won’t deliver that, people will just MAKE THEIR OWN.

We live in a world where when the laws of convenience clash with a society governed by I-rule-all-and-whatever-I-say-must-be-right-because-after-all-I-am-awesome-and-I-rule and I will just just drive on the sidewalk if you block my shortest path. The networks better get used to that and sell us shrimp and THE OFFICE as we are cross-cutting through yards and shrubbery a-la-Ferris Bueller.

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7 Comments

Filed under Financial, Gadgets, Internet, Marketing, Media, TV

7 responses to “NBCU & Amazon – Small Time Versus the Torrent of iTunes

  1. Tom B

    The latest idiocy is Vivendi want to “give” away ad-supported MP3’s that are so crippled 1) you need WMA 10 or 11 (iPods not allowed!) 2) You CAN’T burn to CD 3) You must maintain your account by visiting the site every month. These bozos need to all go back to B-school– it’ll keep them out of trouble while they rapidly become irrelevant.

  2. Al

    Well, at least you get it.

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  4. I’ll definitely pay $1.99 for each episode on iTunes. Anything higher isn’t worth it I guess.

  5. Whatever the industry currently thinks turns out to be so wrong. It’s too funny!

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