Zucker Says the Darnedest Things

When we last heard from NBC Universal's CEO Jeff Zucker, he'd refused to renew the network's yearly contract with Apple's iTunes Store, leading Apple to immediately pull NBC shows from the store rather than have them yanked midseason. In addition, Apple managed to control the story so that NBC came off looking clueless and greedy. You'd think Zucker would have learned to keep his mouth shut from that media drubbing.

You'd be wrong.

On October 29, Variety quoted from a Zucker/Ken Auletta interview at a Syracuse University benefit. Zucker claimed NBC U wanted to "explore" a new pricing structure by taking a single show (presumably the hit Heroes) and pricing it at $2.99 "on an experimental basis." Apple declined. Then, Zucker said, NBC U asked for a cut of Apple's iPod revenue.

"Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money," Zucker said. "They did not want to share in what they were making off the hardware or allow us to adjust pricing." He cited iTunes as a digital business model that was corrosive to the media business. "We don't want to replace the dollars we were making in the analog world with pennies on the digital side," Zucker said.

Where to begin? Wired's Tom Krazit nailed it when he asked, "How much revenue does Sony give NBC when it sells a television? How about Panasonic? Or Sharp?"

We're fairly certain that people bought television show downloads because the iPod Video allowed them to watch them, but we seriously doubt that many of those consumers bought the iPods to watch downloads. You could go so far as to say that Apple created $15 million worth of additional business that NBC benefited from rather than one that drained revenues.

Interestingly, the question of who should benefit from newly "found" revenue lies at the heart of the Writers Guild of America (WGA) strike against the Alliance of Motion Picture and Television Producers (AMPTP). When the last contract was signed, no one anticipated that DVD collections of television shows would become the immense revenue stream they have. (In terms of the WGA/AMPTP confrontation, "DVD" refers to all new forms of digital distribution, including downloads and cable network rebroadcasts.) The writers maintain that the last contract didn't take those forms of resale into consideration and that the new one should, while the producers have refused to negotiate on any terms until that is taken off the table.

We're sure that NBC Universal's new Hulu video download service has set aside some of its extra revenue precisely to compensate the writers. After all, Zucker wouldn't want to replace the writers' analog dollars with digital pennies, would he?

Of course he wouldn't.

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