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NBC Universal CEO Zucker: ‘Apple has destroyed the music business’
Monday, October 29, 2007 - 03:22 PM EST

"'Apple has destroyed the music business,' said Jeff Zucker, [President and Chief Executive Officer of NBC Universal], today at an event organized by the Newhouse School of Public Communications. 'If we don't take control on the video side, they'll do the same' to video," David Schatsky blogs for Jupiter Research.

"Zucker made the comment in response to a question by moderator Ken Auletta of the New Yorker. (Auletta did a fabulous job of volleying one penetrating question after another at Zucker)," Schatsky reports.

"Zucker put in context the highly publicized conflict between NBC Universal and Apple over pricing on the iTunes TV show store. NBC sought to introduce flexible pricing; Apple refused," Schatsky reports.

Full article here.

The Financial Times also has a report on Zucker's comments, "'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 said at a breakfast hosted by Syracuse’s Newhouse School of Communications."

"As part of NBC’s push for more flexible online pricing, Mr Zucker said he urged Apple for months to price one programme at $2.99 per download – as opposed to the current $1.99 – as an 'experiment' but was rebuffed by Steve Jobs, Apple’s chief executive."

Full article here.

MacDailyNews Take: If by "destroyed," Zucker means "saved," then he's completely correct.


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Oct 29, 07 - 02:26 pm Comment from: MadMac

I too was blind, but now I see.

These dolts can't tell when their butt's have been saved from their own incompetence and outdated business model. Well, perhaps they can but if they admitted it, they would admit to their own irrelevance.

Oct 29, 07 - 02:26 pm Comment from: TowerTone

And NBC had "saved" the news business.....
(and by "saved" I mean destroyed)

Oct 29, 07 - 02:27 pm Comment from: xizm

"Destruction leads to a very rough road
But it also breeds creation"

Red Hot Chile Peppers

Oct 29, 07 - 02:27 pm Comment from: Tommy Boy

Mr. Zucker needs to learn that if it ain't available for a reasonable price it is always available for free on BitTorrent.

Oct 29, 07 - 02:32 pm Comment from: kelly

This is what I call "Creative Destruction".

Oct 29, 07 - 02:32 pm Comment from: CheekyGit

Sticks and stone, Jeffy. Sticks and stones.

Oct 29, 07 - 02:35 pm Comment from: January 24, 1984

He has to blame somebody.

Loser.

Oct 29, 07 - 02:37 pm Comment from: ron

Zucker-Zucker, the money hungry - - - ker.

Apple has leap-frogged all you middlemen. Retire now, while you still have the chance.

Oct 29, 07 - 02:38 pm Comment from: Mittens Romney

And now you understand the creative power of Shiva the Destroyer (aka Transformer). wink

Oct 29, 07 - 02:39 pm Comment from: lbuschjr

The music business has been destroyed by the music labels all jumping on one bandwagon after the next, pushing the next boy band, Britney look-alike, and other fad after another until the person is so over-exposed no one wants to see them anymore.

Try finding some talented artists, letting them make their music, and let the creativity flow. THAT would save the music industry.

BTW, last time I checked, people hadn't stopped listening to music. They just aren't buying the crap shoveled at us anymore.

Oct 29, 07 - 02:40 pm Comment from: Macromancer

Let's translate:

Destroyed = removed the record labels' ability to gouge the hell out of consumers by charging 18-20$ for a CD with one good song and 9 crap songs. Sorry fellas, gonna have to cut back on the hookers and blow.

Ironically, MW is 'value'

Oct 29, 07 - 02:42 pm Comment from: Synthmeister

The link give almost no info on what went on at the discussion. NBC says they want to "experiment" with different business models or something. I love to know how they a justify giving up one business model which is actually making money before they have developed an alternate model.

Oct 29, 07 - 02:42 pm Comment from: Andrew

"Flexible" can ONLY mean higher prices for consumers. Period.

Even if NBC adopted a $2.99 per tv episode download, that's something like $70 for a season! Per consumer! And it's not as good quality as a DVD, nor does it have the extras! Hummm oh I forgot, it's about paying through the nose for convenience.

Oct 29, 07 - 02:42 pm Comment from: mackle

considering the source, this is unqualified praise. in the terms of the legacy "music business" model. this is quite true and it needed to be destroyed to save the consumer and content creator. kind of like destrying a champion thoroughbred on the track after it has broken an ankle. you do it to stop the suffering.

Oct 29, 07 - 02:42 pm Comment from: The Power of One

If the One is named Steve Jobs.

Just this caution: absolute power corrupts absolutely.

Who is Steve's next victim? He has already proven he has little respect for Apple customers (shiny screens, corrupt iMovie replacement, no cash for phones, etc), so before we get so sumg about this, better listen for the sound of a guy in stealth Levis coming up behind us.

Oct 29, 07 - 02:46 pm Comment from: Olmecmystic

These suited fat cats kill me. They don't have a problem with a world dominated by M$ (NBC has been in bed with them for years, i.e. M$NBC) but even the THREAT of a future digital world with terms dictated by Apple is untenable.

Yo, Zuck, kiss both cheeks, OK? What you forget is every one of us can get content anywhere, and paying for it is optional (Tivo/EyeTV/not to mention Bit Torrent, as someone already has). Just ask those record companies whose business you claim Apple (ha!) destroyed.

Unbelievable.

Peace.
Olmecmystic

Oct 29, 07 - 02:49 pm Comment from: GS

In a GE company, if your not the #1 in the market, your sold off as weak value.
For Zucker he is weak value.
They follow an interview with him soft selling HULU on CNBC with their new commercial touting 'unbiased'. What a Hollywood portrayal of themselves..
I hope 70% of the movies next year are just released digitally.
I can also believe that Zucker can't remember when the problem of illegal downloads was the industries biggest problem.
Now it is the fact that one site has too much traffic, but they'll sell movies to WalMART.
Give him a chance, he partnered with the enemy to make a 'better' alternative...Good thing he hasn't run for President yet...He would make Iraq look like a good decision.
He will end up looking like a Merrill Lynch leader in the next 24 months.

Oct 29, 07 - 02:51 pm Comment from: moBeOS

I would back this comment only if they were going to experiment by lowering their prices. They are mad to think anyone would pay more money per episode.

Oct 29, 07 - 02:52 pm Comment from: Andy

This almost makes me want to start buying NBC stuff again just so I can stop buying NBC stuff again!!

Oct 29, 07 - 02:53 pm Comment from: Forrest, Forrest Gump

Zuker!

'nuf said.

Oct 29, 07 - 02:53 pm Comment from: Olmecmystic

Beatles: "All we are say---ing, is give peace a chance!"

Steve Jobs: "That's for when NBC calls!"

Audience: Hilarious laughter.

Peace.
Olmecmystic wink

Oct 29, 07 - 02:53 pm Comment from: ChrissyOne

The Music Business is dead!

Long Live MUSIC!!!

Oct 29, 07 - 02:57 pm Comment from: Chuck U Farley

What a mucking foron!

Oct 29, 07 - 02:58 pm Comment from: Yours Smugly

Apple has saved from Big Music bloodzuckers.

Oct 29, 07 - 02:58 pm Comment from: max

What he meant to say was "Apple has destroyed our business model" - which is true

Oct 29, 07 - 02:59 pm Comment from: Yoda

Disruptive technology, iTunes is.

Oct 29, 07 - 03:01 pm Comment from: TMAN

Perhaps the Music Business needs to be destroyed.

An artist or band could record music, negotiate with Apple, and sell their music directly on iTunes Music Store.

No need for middlemen, Record Labels, or expensive CD burning/distributing.

That way, most of the profits for the music goes directly to the artist/band.

Oct 29, 07 - 03:06 pm Comment from: jdoc

This guy is obviously put off by the fact that he faces losing control of his own market by a business model that he stubbornly refuses to implement. But before we go and blame Apple for the 'destruction of the music business', why don't we just listen to what the artists have to say about all of this? Surely it's their business too, and I'd think that they would tell us what they'd be happier with- Apple's model, business as usual, or something else.

I believe that most, if not all artists will say that Apple has done a good job of rejuvenating the music bizz.

Oct 29, 07 - 03:06 pm Comment from: TV boy Common Sense

i thought hip-hop and rap destroyed the music business....

Oct 29, 07 - 03:13 pm Comment from: Harry

.. You have to destroy before you can rebuild .. Lord Shiva said it already a long time ago.

Oct 29, 07 - 03:14 pm Comment from: Dude

I wish I had the name of the guy who posted this and what site it was, I only thought to copy the text. This has to be the finest example of why the record industry has no clue, it was teh last time NBC started these shinanigans.

1. You start buying out all the small players, in many cases swooping in for the kill when really all of these labels needed was a little investment.

2. You start jacking up prices on physical product, changing formats to force re-purchasing along the way (kind of what Microsoft is attempt with their iPod ripoff).

3. You start killing true a&r;, and artist development, and then wonder aloud why your financial recoup isn't at expectations (maybe you should try developing artists for a REAL amount of time, past their first hump). Instead you pretend to let the labels you bought out develop for you, only to shutter their doors once they've developed their existing roster as far FINANCIALLY as you think they can.

4. While you weren't looking, simple hotline file trading and ftp sharing catapults into the monster that becomes p2p. You should have seen this coming, especially considering how much $$$ you waste on inefficient promotion techniques and PR shite. Instead, the U was too busy "acquiring" content to realize the world had developed a new way to distribute it.

5. Because you didn't react fast enough, you lost LOTS of money (so did the other big guns. get over it)

6. Because you still didn't react, a newly re-appointed Steve Jobs beat you to the punch, figuring out what hundreds of other content and device companies couldn't.

7. After you realize that "this Apple stuff might actually work", you use various offensive means to kill off the BIG thieves in the p2p arena, and try to scare the crap out of the public. You try multiple bad ideas for going on your own, mainly because they lacked the simple and effective design of iPod/iTunes.

8. You start whining that "we should have flexible pricing", "we should control the pricing models", "we can't manage the system, because we not smart enough to, but it should still belong to us". What don't you understand about simple and effective? You guys/girls are worse than OPEC. Would you like to dictate how much milk and eggs should cost too?

9. Microsoft realizes they are never going to gain real traction in the market with PlaysForSure (like anyone didn't see that coming). They decide to once again copy Apple play-for-play and announce the Zune (or is that iTurd?).

10. You see an opportunity to spoil the success, excuse me, THE ONLY TRULY SUCCESSFUL ONLINE CONTENT DELIVERY MODEL, ahem, by poisoning m$'s iPodalike with a petty overhead fee. Why should Microsoft care? They won't sell a fraction of what Apple does. Or did last year. Or the year before. What kind of payments do you hope to see? $1000? $5000? $100 000 [that's stretching it I think]. Your just trying to create what the dirt in your world calls "leverage" against Apple next year when negotiations begin again. How much will that mean next Xmas? A HELL of a lot more. If you truly believe the model isn't Artist-Intended, DEVELOP A BETTER ONE! Oh wait, you've tried to (albeit late), OVER AND OVER AGAIN. And the public has flatly rejected every attempt you make to hi-jack their wallets.

11. Your CEO justifies all this with 1 sentence that completely and transparently puts on display the spite, irreverence, and disrespect your entire organization displays to it's customers. And you wonder why they've stolen so much from you. Maybe you should have kept your CD prices in check at Retail! If I make a product for $5, and expect to see $5 profit on it's sale, why would I let retail channels make more than I do? The consumer fallout you've suffered is NO ONE'S FAULT BUT YOUR OWN.

11 moments in time. 1 stupid sentence. First rule of business "listen to your customers".

Now we know for sure how you feel about your customers. Unbelievable.

Oct 29, 07 - 03:14 pm Comment from: doc

If he thinks what has happened to the music business model is bad, wait till he sees what happens when iBank comes online. Direct, person to person iLoans backed by iGold with low iInterest.

Oct 29, 07 - 03:14 pm Comment from: Macromancer

"He has already proven he has little respect for Apple customers (shiny screens, "

What? comments like this just make you look like you need to gete your head out of the oven.

How does a shiny screen translate into somoen have disrespect for a group of consumers. And before you answer, just remember that no one is forcing anyone to buy anything, and your comment has a slight ring of the entitlement generation to it.

Oct 29, 07 - 03:16 pm Comment from: Dude

Note on above:

it was when Doug Morris called all iPod owners thieves. Fits here too.

Oct 29, 07 - 03:21 pm Comment from: shiftOpt k

I've said it once b4. Isn't the whole price thing about Apple wanting to sell NBC's content for too cheap? Then why is it alright for Amazon to sell the same content for the same price, and even cheaper, than Apple? Sounds like NBC has some personal issues with Apple or something.

Oct 29, 07 - 03:23 pm Comment from: @The Power of One

1) Most people are fine with the glossy screens, and while there is of course a vocal minority who want matte screens, there was also a vocal minority during the Intel switch. In the long run, except for a few graphics professionals, glossy screens are better.
2) I personally never used iMovie before the replacement and now I get great use out of it, so you can't call Apple just disrespecting its customers for offering it. And for the customers, like yourself, who apparently don't like it, they still offer the old version. So how is that bad at all?
3) Are you JOKING? Steve Jobs is greedy for not offering iPhone refunds in cash? Look, I'm happy I got my refund, but considering that anyone who bought an iPhone before the price cut wasn't expecting a refund, it was FREE MONEY. If free money given is the worst thing you can say about Apple, I'd hate to see what you have to say about NBC.

Oct 29, 07 - 03:23 pm Comment from: Thank God for Apple!

Until the early 1980s the health industry made millions ineffectively treating peptic ulcers with bland diet and psychological counseling. Ulcers were a lifetime subscription. Then Robin Warren and Barry Marshall showed these ulcers could be cured with a 14 day course of antibiotics. They got the Nobel Prize in 2005, but the "industry" denied, ignored and diminished the value of their work for decades for ongoing profits at the expense of the patients. Let's hear it for disruptive technology.

Oct 29, 07 - 03:25 pm Comment from: Frank

F8cking idiots.
Complaining that Apple makes money off the recording & broadcast industry is like complaining Sony's stereos and televisions were profits off the recording & broadcast industry.
I'd love to see the video companies charge television manufacturers a dime off every tv.
Man, those idiots really blew it, and they just don't get it.

Oct 29, 07 - 03:29 pm Comment from: DWJ

From my perspective, I'm a 47 year old male who grew up with album oriented rock, and frankly, I'm tired of big music cramming whoever THEY think is great down my throat.

Indie bands and labels have single-handedly renewed my interest in music.

I could care less what Universal has in store for me.

Oct 29, 07 - 03:31 pm Comment from: Goople

of course his statements about Apple destroying the music industry are utterly rediculous....however I do believe streaming video Flash (like Hulu) is the future of the video/film industry

Lets get Flash 9 Update 3 on AppleTV and iPhone and let the games begin.

Two different animals, music and video. I believe Apple is right about uniform pricing for music, but wrong about uniform pricing for video.

They should embed the Hulu viewer right in the iPhone

Then companies like Brightcove will take care of the independents and keep the majors honest.

Throw in Silverlight as well and Apple will clean up the device market.

Oct 29, 07 - 03:46 pm Comment from: Eric

Maybe if 95% of the music they put out didn't suck people would buy it.

Oct 29, 07 - 03:51 pm Comment from: Whatever

@Dude

You don't need to look elsewhere, it was here at MDN, lol.

The poster's name is beatboxrob.

Oct 29, 07 - 03:51 pm Comment from: smackman

Please allow me to translate the headlines....
"Apple has destroyed our ability to squeeze the ignorant public"

'Nuff said..

smile

Oct 29, 07 - 03:54 pm Comment from: macview

Is this the same Zucker that makes those airplane and Naked gun movies? - cause he's fricken hilarious!

Oct 29, 07 - 04:05 pm Comment from: Toby

If you're going to make a mistake, make a big one.


All that higher prices will do is make people want to steal more.

Oct 29, 07 - 04:07 pm Comment from: Zucker's Boy Friend

Zucker is a F@£ker

Oct 29, 07 - 04:09 pm Comment from: Dave

Since the original announcement by NBC about removing their content from iTunes, I removed all NBC channels from my TV's and TiVo's (NBC, MSNBC, Sci-Fi, Bravo & USA networks). You don't miss what you don't even now is on... I hope others do the same.

Oct 29, 07 - 04:09 pm Comment from: JackH

I thought, ok, give this guy a chance, have a listen. But then when I see his tanty is all because Apple wouldn't let him charge *more* for tv progs, he lost me.

So is this how Apple was going to destroy the video business? By charging a reasonable price instead of one, some 33% higher!

And we assume this is how Apple destroyed the music business ("in terms of pricing"), by giving the consumer, not the publisher, a fair price. And funny how that pricing has destroyed the music industry, they've only been able to sell a piddly billion songs thru iTunes. Poor buggers. Oh, I see, if Apple had've charged say another 33%, those greedy scum publishers could have made an extra $300m! None of which of course would have went to the artists.

Oct 29, 07 - 04:10 pm Comment from: Bunson Honeydew

Apple came up with a way to conveniently and easily purchase music instead of stealing it and they are just ruining the whole damn thing.

They are going to ruin the whole industry.

Oct 29, 07 - 04:15 pm Comment from: Big Al

That lying NBC shill. $2.99 for the show you want plus $1.99 for the bundled crap show you don't want = $4.98 for the popular NBC TV shows.

Oct 29, 07 - 04:17 pm Comment from: JB

Note to NBC-Universal:

You were offered the chance, however indirectly, to have variable pricing on music when Apple introduced iTunes Plus music at $1.29 per track. If you'd played along, a premium price tier could have been established, and you could have made more money. But no, you dolts pitched a fit about DRM issues. Then just to spite yourselves, you later released your music DRM free for less money than you could have got through Apple. Now everyone expects DRM free for 99¢ or less. Like I said -- dolts!

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