Higher prices and stricter DRM will encourage illegal downloading

By now, I’m sure you know about the controversy between NBC and Apple, where NBC decided to ditch Apple’s iTunes Store and instead sell their shows through Amazon Unbox.

The reasoning behind NBC’s decision is that they wanted different prices for different shows. It might, to some people, sound like a reasonable demand. However, this stance basically comes from greed, and failing to acknowledge that one of the major things behind Apple’s success with iTunes store is the pricing model seems to me like a fundamental business error.

At iTunes, no matter what artist you want to buy music from, the price per song is the same. No matter what video/show clip you want, it’s the same price, and it’s reasonably low and fair. The consistency in this model has proven to be great in reaching people, because with such simplicity people will know what to expect and find it just.

Another reason for switching is that Amazon offers stricter DRM than Apple, which will, of course, make it less flexible for the end users and deliver less value per price for the product. So, NBC might very well get a higher price for their shows at Amazon, but since they will, I’m convinced, sell a lot less copies with that higher price and more “protection”, they’re bound to earn less money and gain more bad-will.

The sum is that NBC had a shot at actually selling more shows for downloading, lost out on it because of greed, and there will soon be a higher concentration of their shows available at any torrent web site. If they are serious about stifling illegal downloading and actually deliver something worth its price to their customers, my advice is for them to seriously rethink.

I also read that some analyst thought that this would mean less iPod sales because there wouldn’t be sufficient availability of video shows. Yeah, right. Like there’s no way for users themselves to convert video clips for iPod usage (Windows alternative), clips that they could get from any other source of their liking.


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  • Scott Powers says:

    It doesn't matter what networks like NBC or record labels or film studios do.. there will always be a call for piracy online. Why go pay $12 to see a flick in the theater.. or $30 after snacks and drinks… when you can download it for free via bit torrent spend an hour converting and burning it to dvd and watch it on your own tv for free? The logic is simple. P2P on any level will never go away.

    Sure NBC shot themselves in the foot with this greedy move but the fact still remains. Their shows were available on bit torrent before the move and they will be available now. They may see less sales but I doubt the download numbers spike at all as a result. If folks don't want to spend the money… i doubt they'll spend the time to learn a technology new to them like bit torrent.

    Rather than do that… the logical solution would be to just get in touch with your Cable/Satellite provider and have a DVR/TiVO installed. Customers may have to purchase/lease the receiver but on average the service fee for DVR from both Dish Network and Directv is only $6 a month. That can't be beat by any download seller. (I know prices because Satellite TV is my occupation.)

  • Robert Nyman says:


    Good input! I guess it's about making it as easy as possible for people, while doing it for a good price. Price-wise, of course you can't compete with "free", but if they were to offer better quality, extra material etc, all together with a guarantee that it is indeed a good version of the movie.

    Satellite providers absolutely have a unique opportunity to make money, just out of people buying through a service they already have.

  • Jules says:

    I can't remember the name of the site but a new music provider is taking a different approach to pricing. If a song is new and therefore is in less demand, the price is lower than when it reaches high demand (I think the price peaks at iTunes prices, $0.99 USD). Smart buyers will try to get in early than late.

    Purchasing downloaded music at prices equal to or more than buying a CD at a store doesn't really inspire people to buy music anywhere but if downloaded music were available at significantly less cost than purchasing a CD, sales would increase.

  • Robert Nyman says:


    Interesting approach, and probably one that's attractive to people!

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