News

NBC CEO: Apple Destroyed the Music Business

Tuesday, October 30th, 2007 at 8:35 AM - by

NBC Universal CEO Jeff Zucker is pointing the finger at Apple and the iTunes Store as the reason media companies can't sell their wares online at what he considers to be profitable rates. His comments came during a speech at the Syracuse Newhouse School of Communications where he also urged media companies to take a stand against Apple, according to the Financial Times.

Mr. Zucker said "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."

Mr. Zucker's comments follow a very public feud between Apple and NBC over pricing at the iTunes Store. NBC claimed it wanted more flexible pricing for TV shows, while Apple claimed that NBC wanted to charge too much for programming.

Ultimately the two companies parted ways when NBC refused to renew its contract with the iTunes Store.

Mr. Zucker added that he urged Apple CEO Steve Jobs to price one TV show on the iTunes Store at US$2.99 instead of the standard $1.99 as an "experiment." He said that Mr. Jobs refused, and also would not entertain the idea of sharing iPod sales revenue with the broadcaster.

In an effort to bolster sagging revenues, NBC has decided to team up with News Corp to launch its own online video service dubbed hulu. Unlike the iTunes Store, hulu will be Web browser-based and shows will include commercials that viewers must watch.

hulu is available now, but is still in beta testing. If analyst predictions are any indication, it will shut down within a year, and NBC's content will return to the iTunes Store.

20 comments from the community.

You can post your own below.

+ show options

Your current settings, click to change: Sort Oldest First, Show Guest Posts, Hide Community Stats

Bosco said:

member since 03 Jun 2002 with 1001 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 10:34 am

Here's a little business idea for anyone sitting in a dorm right now...

1. Buy the following domains and forward them to hulu.com.

2. Issue press release.

3. ???

4. Profit.

OK, here's your list: huknew.com, hucares.com, hufarted.com, huareyou.com, huletthedogsout.com, huframedrogerrabbit.com, husyourdaddy.com. Go.

Quote this post ↓

mahuti said:

member since 09 Jan 2003 with 374 posts, TMO Staff, send him a message or view his profile

Tue Oct 30, 2007 10:37 am

"destroyed the music business-AS-USUAL" ie, pillaging the consumer. What a maroon.

Fox & NBC's H.U.L.U.=

Happy Users Losing Uniformly.

Hell-bent & United at Losing Users.

Having Unsatisfactorily Lost, Ultimately

Quote this post ↓

geoduck said:

member since 30 Dec 2003 with 1915 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 10:38 am

"We know that Apple has destroyed the music business "

should read

"We know Apple destroyed the music labels ability to screw the customers in any way they wanted "

because that's what they really did. The subtext to his whole speach is all about keeping control in the hands of those who view the "video side" as another cash cow and the consumers as contemptable dupes that will meekly accept, and pay any price for, whatever drivel is thrown their way.

the iTS is not perfect, but it is a first step toward letting the people choose what they want to see. It is a step toward breaking up the huge media empires that controll so much, from sit-coms to news.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 10:57 am

Simply unbelievable. Do they think we are all mindless morons? I can go to Walmart and buy a FULL season on

DVD for under $30 and I'm supposed to pay $50 for individual episodes in a lower quality format without the

extra content. Same with CDs. Why should we have to pay MORE for lower quality products. $2 for a bit of a song for a ringtone?!!

Media companies, YOU destroyed your own businesses!!!

Quote this post ↓

tuscmat said:

member since 06 May 2004 with 35 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 11:14 am

This man is truly remarkable in his arrogance and hubris. Talk about his own version of "let'em eat cake"! He's right up there with emperor Nero only Zucker's violin is his mouth and greed.

Quote this post ↓

vasic said:

member since 09 Aug 2005 with 278 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 11:15 am

This is PR campaign. In the same vein as WMD, Mission Accomplished, etc. What Zucker is doing is going to the extreme in order to make a strong point. He wants to nudge people's perception, if only a bit, and the only way would be to blast away at full force.

Let's make sure we're not misinterpreting this. NBC wants control and they feel they're losing it with Apple. However, the point is not that the iTunes business model is detrimental to the labels and studios (and favourable to the consumers). The labels are seeing here only one thing: them losing control over pricing (for the time being). What they refuse to see is free cash coming their way through all those downloads.

It is obvious to everyone that iTunes single-handedly saved music business from themselves. ITunes is bringing one in 8 dollars to the industry. If iTunes never existed, music business would have NEVER figured out how to sell downloads (they kept trying before iTunes, unsuccessfully). In fact, they keep trying to figure it out on their own, through rentals (bean counters' wet dream of recurring revenue stream), and still can't see it.

The point, in the end, is that labels and studios know that iTunes is their only salvation. They hate it with passion, as it takes away the control of their business. Nobody wants to have someone else control the way they do business, especially if it is a multi-million dollar business. They are trying everything they can think of to undermine iTunes's success, in a foolish hope that they will invent an alter-iTunes with same effectiveness, popularity and, eventually, success, but under THEIR control. It ain't happenin'. For the time being, the future of their businesses is in Apple's hands and if they wish to survive, they better embrace it.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 11:53 am

Bosco wrote:
Here's a little business idea for anyone sitting in a dorm right now...

1. Buy the following domains and forward them to hulu.com.

2. Issue press release.

3. ???

4. Profit.

OK, here's your list: huknew.com, hucares.com, hufarted.com, huareyou.com, huletthedogsout.com, huframedrogerrabbit.com, husyourdaddy.com. Go.

Ha that cracks me up... thanks for the laugh

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 12:58 pm

I don't mind comercial driven content I can leave the sound up and do my other work why the repetitios goes on. I do mind if it takes up t much time. I do mind if they want me to pay for it or monopolize my screen.

The music problem is they want the control. Online downloads have revolutionized the music Industry for the small label or musician. Check out magnatune for one there model is fabulous and I hope many adopt it.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 1:06 pm

Somebody needs to tell Mother Zucker about her little boy Zucker, who is going to ruin everything for every Zucker out there.

Quote this post ↓

Tiger said:

member since 17 Jun 2003 with 1010 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 1:13 pm

Would Mr. Zucker like some cheese to go with that whine??????

Talk about refusing to accept any level of personal responsibility, say, that the content isn't WORTH what he's peddling it for?

I hope he has fun on his experiment with Hulu. Haven't they learned yet that cutesy names don't do anything for consumers? After Google, the rest just seem to fail. In the meantime, I'll go back to my iTunes. Me, and the other millions of consumers NBC walked away from.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 1:55 pm

Has music really gotten better in the last five years because of iTunes? Or is iTunes now just another one of the corporate entities with their fingers in the pie? I think iTunes has basically become a bully in its own right, just as bad as the labels. It forces too many restrictions on artists. Why do all songs have to be the same price? Why is 7 minute track the same price as the 45 second track? Why can't I set the relative value for different albums? The newer one more expensive and the older one cheaper? These are valid concerns, and some of them are the same ones that NBC has. The newest shows can fetch more on the market than the older seasons. It's common market sense, and Apple does the exact same thing with its products, see the iPhone and iPods for an example of price flux. CDs come down in price for a reason, new releases are in higher demand. Why should iTunes keep artists from selling their product in a fixed pricing structure? Sorry, but it's called being a bully.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 1:59 pm

Hmmmmm, I remember him saying that it wasn't true that they wanted to raise the prises for shows in iTunes.

Mr. Zucker, 12 more months and your job is gone.

Quote this post ↓

Dirt Road said:

member since 24 Oct 2002 with 1239 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 2:26 pm

So he was making this speech at a school, and nobody stood up and yelled "Suck it up, ya crybaby!" ???

Sheesh, even in 1980 there was still enough steam in college kids to "pffft" at some GM engineers when they were showing off their new computer diagnostics system and told us the codes wouldn't be available to consumers. I still remember them looking surprised, and wondering why they'd think we'd like the idea.

Kids these days have too dang much respect for the wealthy.

Quote this post ↓

Actual Reality said:

member since 16 Aug 2005 with 44 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 2:30 pm

Guest wrote:
Why can't I set the relative value for different albums? The newer one more expensive and the older one cheaper? These are valid concerns, and some of them are the same ones that NBC has. The newest shows can fetch more on the market than the older seasons.

You're neglecting one major factor in price fixing: SUPPLY. In the digital realm, there is no need for supply to fulfill demand, therefore everything is equally available. Therefore all songs should be the same price.... I don't buy that tripe about new songs being worth more than older ones... I'm sorry, by that logic "Oops, I did it again" or "Barbie Girl" would be more valuable than "Yesterday" or "Stairway to Heaven" -- I don't think so.

This is a different market - Supply restrictions are not there, therefore products do not become scarce, removing any need to jack prices... The music industry just cannot seem to comprehend this idea.

Quote this post ↓

Bosco said:

member since 03 Jun 2002 with 1001 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 2:33 pm

Dirt Road wrote:
So he was making this speech at a school, and nobody stood up and yelled "Suck it up, ya crybaby!" ???

I bet he gave his speech to FEMA employees, fresh from peppering their boss with questions at a fake presser.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 9:35 pm

So, do TV manufacturers share there profits with NBC? My guess is not.

Quote this post ↓

A guest said: (hide)

Tue Oct 30, 2007 10:06 pm

Zucker is an old school ass. Can you say GREED? He should go cry with the other greedy jerks at the RIAA. A buck a song would make 18 bucks for an 18 song CD, or about what a CD costs. But, since the record companies can't get a group of 18 songs together that a consumer would pay for all they can do is cry and whine and stamp their little greedy feet. Their little pea brains couldn't grasp the paradigm of the future so screw them.

Quote this post ↓

Hieronymus Murphy said:

member since 02 Apr 2007 with 10 posts, unranked, send him a message or view his profile

Tue Oct 30, 2007 10:44 pm

Jeff Zucker is a witless tool trying to find someone to blame for the failure of the media megacorps (like NBC) to "get" what's going on with podcasting, videocasting and the digital distribution of music.

Jeff, why don't you and the rest of the media dinosaurs crawl off to the boneyard and die?

Quote this post ↓

A guest said: (hide)

Thu Nov 01, 2007 1:28 pm

oldschool tosspot wankers like zucker are so useless and irrelavent these days, they should just be taken out back and shot. no one would miss them and the music world would be a better place for it.

Quote this post ↓

A guest said: (hide)

Mon Nov 05, 2007 6:41 am

...which brings me to my last point, children. Don't smoke crack!

Quote this post ↓

Post Your Comments

  Remember Me

Not a member? Register now. You can post comments without logging in, but they'll show up as a "guest" post.


Please enter the word exactly as you see it in the image above. Registered users aren't prompted for this. Having trouble reading the image get a new one.