Corporate Stupidity

A couple of months ago, Farhad Manjoo of Salon posted about this last summer's snit between NBC Universal and Apple. The short form: NBCU wants more control over the price of downloads of their content from iTunes, and Jobs was insistent that the price remain the same for everything ($1.99/download). So NBCU said "Screw You," and walked away from iTunes, taking their bat and ball with them.

Why am I writing about this now? Because NBCU's policy only became effective early this month. And so now, while the writers are on strike and it might be a good time to download shows from iTunes that you haven't seen before, you're hosed, because they're gone.

And I don't mean just the latest seasons; NBCU pull their entire catalog. And this isn't just for NBC shows; it's for NBCU-produced shows. So while Heroes and 30 Rock were on NBC and are of course gone, so is Monk, which is on USA. And Eureka, which is on SciFi. And so on. Don't matter about the channel; just matters about the production company. And who the hell pays attention to that?

This is asinine from so many different directions that it's hard to unpack. But consider these few main points:

• NBCU loses all the iTunes users. That's a lot of users. Yes, they're offering their stuff through other channels--e.g., Heroes is available through Amazon.com's UnBox--but how many iTunes users are going to want to fart around with a new format, try to come up with conversion tools, or whatever? (You can currently only watch UnBox videos on your computer.) Those iTunes users are lost.
• If NBCU jacks up the price--as they clearly want--who will pay? While I would hesitate to say "all," I have to believe that the vast majority of their content is available through torrent download sites. One of the great advantages to iTunes is that it is reasonably priced and easy to use. If NBCU makes it unreasonably priced and difficult to use, who on Earth is going to pay when they can use some other difficult method that's free?
• I don't know how much NBCU was making for their downloadable shows, but for their back-catalog, not only are they not stealing away their own viewers, they're getting that legendary holy grail of business: money for nothing. They upload their episodes to iTunes--episodes that may be years old--and people pay for them. That revenue is now gone. And for what?

As a personal user, I have purchased 'way more TV episodes than I probably should have, simply because it was easy and reasonably priced. I watched half of last years' episodes of Monk through download. All of Heroes. A few episodes of Eureka. And now NBC is getting no revenue from me--none--because I simply don't watch commercial TV. I'll wait and order the DVDs from Netflix. That's not a lot of money--$100, maybe--but now NBCU will get none. Multiply that by tens of thousands, and that's a lot of dough. That they were getting for no extra work.

I always knew that entertainment companies were idiotic about new media distribution formats, but this really takes the cake. NBCU wins the Doug Corporate Boneheads of the Quarter award. Congratulations, guys!