No surprises to see NBC heading over to Amazon’s Unbox online video service, following the content owner’s decision to ditch a deal with iTunes.
Amazon has catered for NBC’s variable pricing demands, with new shows likely to be priced more highly than older ones. Apple refused to budge on its fixed price policy, which appears to have been the dealbreaker.
SeekingAlpha reports that NBC’s programming represents almost one third of iTunes sales, so it is by no means a small loss for Apple. The deal will lapse in December 2007 - Apple can continue to sell old material until then, but it won’t have access to any of NBC’s new season shows.
The deal with Amazon kicks off on Monday, when pilots of NBC’s latest programmes will be made available for free. Thereafter the company will channel new content through Amazon Unbox. Shows will be made available one day after they have aired on TV.
Will other content owners follow suit? Apple will be hoping not. As an aggregator of rich content with proprietary hardware it is reliant on establishing some kind of comprehensive offering.
Vertical search aggregators are judged on the quality, scope and timeliness of their results, and it is no different in Apple’s case (specifically with music and video). Some analysts are suggesting that Apple’s hardware business could be damaged if others in the media industry pull off some copycat manoeuvres.
All of this must feel like a stab in the eye, if you’re working at Apple, since the success of the iPod and iTunes helped change people’s behaviour (in a positive way, if you’re a music exec), by driving adoption of digital music and vastly increasing the amount of paid-for downloads.
Content owners are also looking at providing competition with Apple (et al) by launching and owning their own online distribution outlets. To this end NBC has hooked up with Mr Murdoch’s News Corp and plans to launch ‘Hulu’ next month, through which it will channel TV shows and movies for download.
So, does this mark a seismic shift in the way content will be sold online, or will Apple – with an installed user base and plenty of repeat customers - prevail?