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Amidst Apple iTunes Store standoff, NBC offers up TV shows on Microsoft’s Zune
Tuesday, May 06, 2008 - 09:22 AM EDT

"After a pricing spat with Apple led NBC to pull its video content from iTunes, the broadcaster has struck a deal with Microsoft's Zune online store," Nancy Gohring reports for IDG News Service.

"On Tuesday, as part of an announcement about new Zune features, Microsoft planned to say that it will start selling television programs at the Zune store for viewing on its portable music player. NBC is among the broadcasters supplying videos for the service," Gohring reports.

"The videos, which also come from Comedy Central, MTV, Nickelodeon, Turner Broadcasting and VH1, will cost US$1.99 each. Users will be able to choose from 800 episodes," Gohring reports.

MacDailyNews Take: So, how long will these video files last, Microsoft? Please see:
EFF demands Microsoft issue refunds for music that no longer PlaysForSure (not that it ever did) - May 01, 2008
Microsoft to shut down PlaysForSure DRM services, strand customers to existing PCs - April 23, 2008

"The price is significant because it is the same that Apple charges for most TV programs in iTunes. However, at the time of the dispute between Apple and NBC last year, Apple said NBC wanted to increase its wholesale price of each episode by so much that Apple would have to charge $4.99 per episode. Apple said it wouldn't agree to that price change," Gohring reports. "'We have worked closely with them around flexibility and protection of IP,' said Julio Estrada, general manager for Zune Social. 'Zune will control the price of the episodes, but we're open to understanding which episodes can be priced lower and how we may introduce premium content which may be priced higher than $1.99,' he said.

MacDailyNews Note: From Microsoft's press release: “Partnering with Zune will allow us to develop innovative content offerings for their customers, including flexible pricing and packaging options beginning this fall,” said JB Perrette, president of NBC Universal Digital Distribution. “NBC Universal is excited to offer our hit television shows to Zune customers.” ...Each television show will be priced at 160 Microsoft Points per episode (approximately $1.99) at launch.

Microsoft's "Points" are a scam. More on that here: Zuned: What’s the ‘deal’ with Microsoft Points? - November 12, 2006

Gohring continues, "Microsoft launched the Zune in late 2006, joining a market that had been picking up steam since Apple launched the iPod in 2001. Microsoft has sold more than 2 million Zunes. That compares to more than 10 million iPods sold in the first three months of this year [and over 140 million units total as of January 2008].

Full article here.

MacDailyNews Take: Zune is an abject failure propped up by Microsoft and their willing accomplices in the media.

What NBC has done is the equivalent of a major retailer closing all of their highly-profitable, market-dominating stores around the world in order to open a single mini-mart in Estonia.

Obviously, NBC is currently run by a fool (Jeff Zucker) who thinks he can out-negotiate Steve Jobs. It ain't working out so great, now is it Jeffie?

Apple has sold over 140 million iPods to date. In fact, Apple sold 22.121 million iPods during the last 90 or so days of 2007 (holiday quarter). In other words, Apple outsold all of the Zunes ever sold in just 8 days in December. Happy Hanukkah, Jeff.

How long will it take for General Electric (NBC's corporate parent) CEO Jeffrey Immelt to step in to fix the inept Zucker's mess?


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May 06, 08 - 09:27 am Comment from: piratZafryki

Hey, what's up with Estonia?! wink

May 06, 08 - 09:32 am Comment from: Steve516

Wow, did you see the MASSES of people rushing to the store to buy Zune's after this announcement! Simply astounding... And traffic on their site has been staggering!

And then, everyone woke up.

May 06, 08 - 09:37 am Comment from: HolyMackerel

"…develop innovative content offerings for their customers, including flexible pricing and packaging options…"

Well, until they close down the service in 2 years time and you can't upgrade your PC lest you lose access to your legally purchased episodes. And you can't even burn them onto a DVD to remove the DRM.

May 06, 08 - 09:37 am Comment from: Cubert

"Zune is an abject failure propped up by Microsoft"

Don't you mean "pooped up?"

May 06, 08 - 09:42 am Comment from: G Spank

This is the funniest thing I've heard in awhile!!!

LMAO! Thanks, MDN, this is why a check in from time to time.

May 06, 08 - 09:42 am Comment from: Predrag

What they're not saying is that the price is actually, wait, wait for it... 160 points! Yes, that's it, 160 Zune Points. Now, if I'm a Zune Marketplace user with some 895 points in my account, quick, someone tell me how many episodes can I buy? If a season has 12 episodes, how many more points do I need for a full season? How much actual money is this going to cost me? Let's see: the exchange rate for this made-up currency is 80 per US dollar. This is about the same as Albanian Lek today. Maybe if I pretend I'm a tourist in Albania, this Zune Marketplace would make more sense and be easier to understand; let's whip out that calculator now...

I love bringing this up every time they mention this Zune Marketplace concept. This is surely a bean counter's wet dream. To all the rest of us, it is obviously a colossal hassle and I'd love to meet an ordinary person who is using this out of their own free will.

May 06, 08 - 09:45 am Comment from: Spudly

NBC execs don't really know what they're doing with their media...except using it like a battered child in a bitter divorce.

May 06, 08 - 09:45 am Comment from: M.X.N.T.4.1

Interestingly, Universal are now offering shows through iTunes UK - at two prices depending on the age of the show.

May 06, 08 - 09:46 am Comment from: M. T. MacPhee

Brings a whole new meaning to "MSNBC".

May 06, 08 - 09:48 am Comment from: Predrag

BTW, I took a moment to google up an exchange rate list to find out which currencies of the world are worth around 80 to a dollar; Albanian Lek was the closest, with Bangladeshi Taka right behind it at about 70 to a dollar...

May 06, 08 - 09:50 am Comment from: Chaz

Sorry MDN, when you deal with GE, it's only GE that makes money. That's why M$ is in on the deal. They make so much money from Windoze and Office, they don't mind losing money on Zune. Where the heck is Carl Ican when you need him??

May 06, 08 - 09:52 am Comment from: Botvinnik

"What NBC has done is the equivalent of a major retailer closing all of their highly-profitable, market-dominating stores around the world in order to open a single mini-mart in Estonia."

beautiful, just beautiful. heh heh

May 06, 08 - 09:53 am Comment from: Ampar

" . . . a single mini-mart in Estonia."

Yeah, but the black bread and blood sausage there kicks ass.

May 06, 08 - 09:54 am Comment from: Swing Geezer

I have to repeat the oft uttered query:
"Does anyone know anyone with a zune?"

May 06, 08 - 09:54 am Comment from: John

That will really help sales for NBC, NOT!!!!!!!!!

May 06, 08 - 09:56 am Comment from: Ampar

Ballmer's first job out of college was assistant product manager for Duncan Hines' Moist & Easy cakes and brownies. His cubicle mate was Jeffrey Immelt, now CEO of General Electric.

Coincidence?
After all, they probably shared some special, moist and easy brownie moments together.

May 06, 08 - 09:59 am Comment from: Zune Tang®

Is that fear I smell coming from the I-Pod lemmings? I think what we have here is the beginning of the end for the I-Tunes Store.

As I recall 'BJ and the Bear'—I love that little trucker monkey—as well as 'Buck Rogers in the 25th Century' were both fantastic NBC offerings. Hubba hubba Erin Gray. Grrrrrrrrrr. And now that type of quality programming is only available at Zune Marketplace. Ha! How are you I-Pod dorks gonna enjoy the madcap misadventures of that cute little Twiki? YOU CAN'T! Because he's only available at Zune Marketplace. Losers.

The tide is most definitely turning in Zune's favor, so much so that I can confidently project Zune to be the winner of the MP3 player wars. Buh-bye Apple.

Your potential. Our passion.™

May 06, 08 - 10:01 am Comment from: Not Bill

Allow us to offer "innovative content offerings for their customers, including flexible pricing and packaging options..."

Translation: We will be able to behave like wireless phone companies, offering packages. We will try to get the consumer to spend as much as possible, leave money "on the table," and even charge a higher rate if they exceed their package allocation. Oh the innovation! Isn't it wonderful!

May 06, 08 - 10:01 am Comment from: Sherm

@Spudly

"NBC execs don't really know what they're doing with their media...except using it like a battered child in a bitter divorce."

That is an excellent analogy!

LOL

May 06, 08 - 10:04 am Comment from: One guy from Finland

Estonia is a great country. MDN Please edit...

May 06, 08 - 10:06 am Comment from: Jay-Z

I live in New York and have only ever seen one Zune in the store. I guess in a city of 8.5 million people, one of them was bound to be one of the six people who bought a Zune.

May 06, 08 - 10:07 am Comment from: iLuvMyMacs

You know... I'm being truthful here- I have yet to see anybody with a Zune. I'm serious. Not one person. I go to the gym 4 times a week- I commute to Boston periodically, etc. NEVER saw anybody with a Zune.

May 06, 08 - 10:08 am Comment from: Spark

"... using it like a battered child in a bitter divorce."

Good one, Spudly.

@Swing Geezer: No, and I've never even seen one in the wild.

May 06, 08 - 10:09 am Comment from: obtusegoose

140 million users vs 2 millions users. That be good business sense NBC.

*rolls eyes*

May 06, 08 - 10:16 am Comment from: Predrag

Another New Yorker here. I live in Manhattan and take subway quite often. About six months ago, I saw one guy with a Zune on the subway. To put it in perspective, at any given time, in any given subway car, on any given day, there will be at least 5 pairs of white iPhone/iPod earbuds clearly visible. Keep in mind this is a low estimate and doesn't account for the aftermarket black ones that people buy to avoid being mugged for their iPods (two years ago, this was big story in the news).

Let's watch Zune's 'success' with their (MS)NBC alliance. With their points system and the exchange rate of the Albanian Lek, they may as well be selling in Albania only.

May 06, 08 - 10:21 am Comment from: LateRegistrant

My aunt is Estonian, she lives in the U.S., and she doesn't have a Zune. So this is definitely not going to work.

May 06, 08 - 10:21 am Comment from: Viktor

Smells like Motorola spirit in here. Just wait one year and Jeff Zucker will run with the same luck as the old motorola CEO (I do not recall his name, but he was fired after the failure of the motorola mobile division and mocking about the iPhone).
Isn't Jeff Zucker last name supposed to be written with "S" and not "Z"?

May 06, 08 - 10:22 am Comment from: Johnsson

On another note, shaw wu's clients are bound to be happy today as the stock takes a dip. I'll buy some more after next reports of delayed iPhone rumors leads to another 150-160 dip.

May 06, 08 - 10:22 am Comment from: TowerTone

This oddly coincides with my searching Limewire last night (which I never do, honestly) for episodes of 30 Rock.

Alas, it felt "dirty", so I shut it off before the download was complete....wait.

May 06, 08 - 10:23 am Comment from: Steve

Microsoft's strategy is to give the appearance that their atypically inferior product is the same or comparable, and at a lower price point. Par for the course. I'm not surprised they are expanding their Zune Marketplace with audio, video and books -- yet another in the very very long line of Microsoft blatant copying of Apple's business strategy.

NBC has turned out to be very low class partner. While they demanded higher sales prices from Apple, then went and negotiated a deal at lower prices with Microsoft. I won't be patronizing any of those shows, anywhere.

MDN: I understand Estonia is a beautiful little country.

May 06, 08 - 10:25 am Comment from: johnsson

That will be the time when Wu tells his clients to sell.

May 06, 08 - 10:26 am Comment from: SB Dude

Purchasing a TV show I'll only watch once for $2 is not really that great of a deal. I'd rather purchase to rights to watch it just once for much less.

For now, for NBC and Fox shows, I watch them via Hulu. The content looks great at full screen on a 24 inch iMac, (not so great at full screen on a 30 inch screen)

Though the commercials are a real drag some are only 15 seconds long with the longest being 30 sec. You can't fast-forward thru them so I just turn the sound down and wait for the 'time left' counter to reach zero. (Except for the Direct TV commercials which are as funny as the shows I watch)

I other bad thing about Hulu: there are not all episodes of certain shows and some don't even have episodes for this year. So, I haven't been able to duplicate ALL the shows I used to download from iTunes, but most. For the rest there is always...

May 06, 08 - 10:27 am Comment from: Kevin

I saw one once in the wild, my wife's cousing bought one . . . he had to keep explaining it as Microsoft's version of the iPod . . .

The Great One (in this case, Wayne, not Steve) said that you have to skate to where the puck is going, not to where it's been.

In this case, NBC is skating to the bench.

May 06, 08 - 10:29 am Comment from: MacMan

While I loath Micro$oft and the Zune, in all fairness we cannot say it's 140 million to 2 million as far as NBC is concerned. How many of those 140 million can view video? I'd be surprised if it was half that number.

Still, 70 million is nothing to sneeze at.

Just trying to put it all in a more accurate perspective...

May 06, 08 - 10:33 am Comment from: Demon

Any by the way if your Zune/MS Marketplace Account Expires all the points in it are history and your not entitled to a refund under MS Terms of Service.
How does a Zune/MS Market Account Expire? Well according to a friend (that had about 10,000 points in a XBox Live MS Market Place account) if you don't add points to the account every 60 days it can expire, if you don't log-in to the account for more then 60 days it can expire. When the Credit Card Linked to your account expires, so does your account. If you piss off MS Tech Support for MS Marketplace your account can expire. Your account can also expire because of MS Software bugs or due to MS SQL Failures. An Once your account as expired all you can do is create a new one.

May 06, 08 - 10:36 am Comment from: dix99

And let's not forget the deal they worked out a couple of years ago..

http://macdailynews.com/index.php/weblog/comments/11611/

Did Microsoft have no choice, but to sign bad Zune royalty deal with Universal?
Saturday, November 11, 2006 - 12:20 PM EDT
"So the big Zune news this week is that Microsoft’s deal with Universal Music Group includes a per-unit royalty on each Zune player they sell

I see Universal making another $2 this year, from Zune sales.

May 06, 08 - 10:38 am Comment from: tt

In other news a man waiting for corrective eye surgery removes his eye with a rusty spoon.

May 06, 08 - 10:39 am Comment from: HotinPlaya

"they'll be able to watch them on their TVs through their Xbox, connected to the Zune."

Before AppleTV, I just hooked my iPod directly to the TV ?

May 06, 08 - 10:50 am Comment from: Jim - TIV

well, I guess that means that the 5 people who have Zunes can now watch NBC.

May 06, 08 - 11:03 am Comment from: art

I certainly hope the one Zune owner likes NBC shows.

May 06, 08 - 11:07 am Comment from: melving8

Meh... I guess NBC is saying to iPod users is to continue to bitorrent their shows. Fine with me.

May 06, 08 - 11:09 am Comment from: Raymond in DC

I saw a Zune in the wild once - never since. The owner looked s-o-o-o lonely. Me, I'd love to be a fly on the wall when Zucker tries to explain to his board why he abandoned the millions in iTunes revenue and settled instead for pocket change from Microsoft.

May 06, 08 - 11:09 am Comment from: shen

come on guys and girls, you all know there is more than 6 zunes in the wild......

i have personally seen 2. i watched both crash and reboot. funny stuff.

May 06, 08 - 11:11 am Comment from: Ampar

" a single mini-mart in Estonia"

FWIW, I don't think that was a slam on Estonia. It was just a small place reference. A single mini-mart in Vatican City or Liechtenstein or Barrow, Alaska?

May 06, 08 - 11:16 am Comment from: Cubert

@Ampar,
Or Ballmer's brain.

May 06, 08 - 11:18 am Comment from: Ampar

To MacMan:

To continue the fairness, how many of those ~2 million Zunes have downloaded and viewed video? Or just tried it once? (The same questions go to the iPod owners too.)

Yes, perspective.

May 06, 08 - 11:18 am Comment from: Missy Pants

"Microsoft has sold more than 2 million Zunes"

Isn't that NEWSPEAK for;
"Microsoft has SHIPPED/THREATENED TO SHIP more than 2 million Zunes" ?

May 06, 08 - 11:19 am Comment from: Ampar

To Cubert:

Do you mean abandoned, unresponsive nanotechnology?

May 06, 08 - 11:24 am Comment from: the Iron Jib

What is wrong with these big companies that they can be so amazingly STUPID?

I have long suspected that the only reason 'business' works is because all the morons agree to sell to each other and make illegal deals.
It must be weird to be Steve Jobs - a smart man in a world of fools.

As for the Zune; its extremely doubtful that there are anywhere near 2 million in customers hands.
Maybe 200,000.
Maybe 10% of those will go to the zune store or whatever it is.
Maybe 10% of those will buy a TV show - once.

Thats a big 2000 sales. And that is a serious prediction.

So NBC will pick up maybe $4000. wow.

May 06, 08 - 11:26 am Comment from: Ampar

Missy Pants makes an excellent point. A company notorious for counting channel stuffing for sales could have 1,999,995 devices in resellers' inventories.

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