“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.”
- Jeff Zucker [source]
Acting as a proxy soldier for the Music Industry’s third prong of attack on itself, Jeff Zucker, President & CEO of NBC Universal, attacked Apple (and the iPodfather) for destroying the music industry’s pricing model.
Zucker’s statement is painful because it’s so far from reality. The music industry was aware of the changing digital marketplace throughout the 1990’s and launched venture after venture to try and capture a piece of the digital music market. They failed. Again and again they failed. The iTunes Store opened in 2003 after Steve Jobs, likely sick and tired of watching the Music Industry’s bungled attempts to sell music hurt Apple’s iPod business, decided to bring his golden consumer touch to the world of selling music.
When the iTunes Store opened, the music industry had already spent 10 years trying to sell music online. With crappy subscription models, oppressive DRM, limited selection and overpriced music tracks (I’m talking to you, MusicNet, PressPlay and Rhapsody), they’d fail to gain any traction with consumers (not that it was their fault…labels like Universal basically made that impossible with their licensing terms).
Finally, Apple comes along with enough clout to make a deal and a simplified pricing model and the features consumers wanted (the ability to easily play tracks on multiple computers and burn CDs).
Zucker is mad that Apple wouldn’t let them sell downloadable copies of NBC shows for $4.99/episode (something that NBC took pains to deny, but Apple had confirmed). You read that correctly: $4.99/episode. You mean a season of Heroes is worth $115? In digital form? At 640×480 resolution? With no incremental costs to NBC for distribution? Wow. We are still talking about the show that beams for free through the airwaves to every home in America, right?
I can buy the DVD set for $40, but the digital version is $115? And the DVD set includes “several behind-the-scenes featurettes, mini-documentaries, 50 deleted scenes, select episode commentaries, the original pilot (w/ commentary), and a character map?” And I can get the HD DVD for $70. But Zucker wants to charge me $115.
Zucker, you’re nuts. I can’t wait to see Hulu.com. Perhaps they’ll sell episodes of 30 Rock for $30? Oh wait, Hulu content is free with commercials. Huh?
I get that the Industry is bitter at their inability to build a store that could sell their own products, but to blame Apple for the problem is complete crap. If Zucker really believes this, I would seriously question Hulu’s future. Apple didn’t do anything that the industry couldn’t have done (more easily) for themselves long ago.
[UPDATE]
Just how delusional is Zucker? “Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money,” complained Zucker. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.” So now he’s retroactively bitter about all that money Sony, Magnavox, RCA made selling TVs. Clearly the flavor of the month at NBC Universal is charging the hardware manufacturers for their content.
And just to be clear, Zucker, Apple made millions of dollars off of MY content: my music, my shows. Items that I own and purchased.
Pop open the Utilities folder and you’ll find Address Book’s new kid brother, an Apple application called Directory that was slipped into Leopard. 
Have you ever stared at Apple’s Mail program and wondered whether your email was actually sending or stuck in the outbox? Or wondered if the downloading of a huge attachment was causing your incoming mail just slowing to a crawl? 