You have to give Jeff Zucker points for bucking the “Steve Jobs can do no wrong” conventional wisdom, but he should have quit while he was ahead. According to a report in Variety magazine, the chief executive of NBC -- which recently pulled its TV episodes from iTunes -- complained in a recent interview at the University of Syracuse about how little revenue the network has made from Apple’s online store.
As I’ve mentioned before, Canadians never had access to NBC’s shows in the first place, so the decision doesn’t really affect anyone north of the border. But in the U.S., NBC’s move was one of the few blemishes on Apple’s almost pristine record of market domination.
Some of those listening to the interview might have sympathized with Zucker as he described how little NBC got from the relationship (just $15-million in revenue in a year, according to the network), and may even have nodded to themselves when he talked about how Steve Jobs -- a notorious control freak -- refused to budge on the fixed-pricing model for iTunes shows. Unfortunately for the NBC exec, his Apple-bashing routine quickly went off the rails.
First, according to Variety, he blamed the computer company for “killing the music industry in terms of pricing,” and for threatening to do the same to the video business. Killing the music industry? Nice try, Jeff. More like rescuing it from irrelevance. Until iTunes came along, the major record labels were adrift in the digital wilderness, watching CD sales plummet and an entire generation become addicted to illegal downloading. And what did the industry do in response? Launched a lot of lawsuits.
It’s true that iTunes forced the labels to charge the same price for every song, and also helped to dismantle the dominance of the album by encouraging people to buy songs individually. But there’s no question the industry has made far more from iTunes than it would ever have been able to make by itself in the online world.
After running that howler up the flagpole (among other things), Zucker then proceeded to top it -- by complaining that Apple had refused to pay NBC a cut of its iPod hardware sales. The network executive (apparently with a straight face) argued that Apple had “sold millions of dollars worth of hardware off the back of our content,” and said the decision to leave iTunes was in part a result of the company’s refusal to pay a portion of its hardware sales to the network.
It’s not clear what the interviewer’s response to this was. He may even have been too flabbergasted to think of a comeback. But a good one might have been to ask Zucker how much money NBC has gotten over the years from TV manufacturers, who have also (arguably) sold a ton of hardware to people eager to watch major network content.
Good luck with the new business model, Jeff. Judging by your interview, you’re going to need all the help you can get. For more incredulous responses to Zucker's take on Apple and iTunes, check out this Slashdot thread.
