NBC Universal shacks up with SanDisk, video content now on Fanfare

NBC might have removed its content from iTunes, but the company is still determined to sell media online, and it's announced a partnership with SanDisk to deliver shows on the Fanfare service. Starting in January, the "beta" portal will offer all the usual NBC suspects like The Office, Heroes, and 30 Rock, as well as shows from USA, SciFi and Bravo. As you'd expect, content will be hardcore DRMed to SanDisk's TakeTV players, which is disappointing, but NBC and SanDisk have said they'll collaborate on new "consumer content acquisition models," whatever those might be. All in all, it's a pretty big win for SanDisk, but it still seems like NBC is looking over its shoulder to see if Apple's watching -- the press release mentions flexible pricing and packaging rather directly. It's okay, guys -- everyone needs a rebound.

[daedalus @ Dec 11th 2007 1:17PM]

Out of the frying pan into the frying pan...

[Scott @ Dec 11th 2007 1:22PM]

*face in hands* SO STUPID.

[fred @ Dec 11th 2007 2:40PM]

Stupid?

Let's just cut the bull and get right to the heart of this.

NBC didnt do things the way Apple wanted them to. NBC pulls out of iTunes.

This is their right. They wanted to be able to make a better return on their product and did not want to be serving under Apple as just a marketing point to sell iProducts.

So what this is boiling down to is that some people here see what NBC did as an affront to Apple, and thus they feel a bizzare desire to see it as a affront to them. So now any move that NBC makes, other than putting all of their stuff back on iTunes, no questions asked, will be met with posting like the above, threats to steal their contents and other forms of hothead behavior.

If no one wants NBC's content then they wont buy it, but acting like they should be required to do business the way Apple or its fans dictates is really "SO STUPID".

[tonybullard @ Dec 11th 2007 2:56PM]

No, what's stupid is for content companies to continue to let Apple become one of the largest online content providers in existence. It already sells most of online music...why would they want to contribute to it gaining that same stranglehold on TV?

People need to drop their company loyalties and realize that diversifying this kind of stuff is better for the consumer. Ultimately this will play out and the consumer will benefit.

[Scott @ Dec 11th 2007 3:15PM]

First, you sound like you have some vested interest in NBC's decision. As if you were somehow involved in this collaboration and that my comment has somehow insulted you. If so, I apologize. Otherwise, lighten up.

As a response to your thoughts:

I think it was probably more along the lines of Apple didn't do things the way NBC wanted to and NBC pulls out. The series of events the way you describe them doesn't make logical sense.

Certainly NBC can do whatever they want. I'm sure they still make the majority of their money through advertising on live television, they should have plenty of wiggle room to figure out how they want to sell digital content. I'm certain that the decision NBC made was in the interest of making money, nothing else. Corporate politics don't serve the bottom line when the two companies are not competing.

What NBC did was not an "affront" to Apple, nor was it intended as an "affront" to the people who prefer to use iTunes and iPods. However it does negatively affect the iTunes and iPod consumers. And as such, despite the intent, those consumers feel slighted. I am sure NBC did not consider those people when making the decision. Their bottom line is more pressing.

I don't think that the only solution to the distribution of digital media is iTunes. The real solution is eventually going to be the same system we have for buying real world consumer goods, multiple sources for the same commodity with competing prices. I can go buy a loaf of bread at a number of grocery stores, and choose which store I go to for the same product based on my needs. A single supplier for any single commodity time and again proves itself to be detrimental to the consumer. And in the digital age where a purchased commodity can be reformatted and re-distributed for free, a single source is going to end up being detrimental to the suppliers as well.

This is not about brand loyalty, this is about economics. But more importantly it's about digital economics, something new and more complex than most people realize.

[fred @ Dec 11th 2007 3:36PM]

"First, you sound like you have some vested interest in NBC's decision. "

Not at all. I don't even watch NBC shows.

The rest of your response was very good.

[Duscrom @ Dec 11th 2007 1:25PM]

Dear Apple
Quit being monopolistic bastards and open up iTunes, quit using it as a stairstep to sell more iPods, give returns to the content creators. you market iTunes as a STORE... treat it like a store.

[Derbeste @ Dec 11th 2007 1:27PM]

"NBC Universal shacks up with SanDisk, video content now on Bit Torrent."

I fixed your title for you, Engadget.

Your welcome.

[blinkcowz182 @ Dec 11th 2007 2:02PM]

*you're....Sorry I'm seeing someone about it.

[Derbeste @ Dec 11th 2007 2:23PM]

Eh...don't feel too bad. I noticed the same thing about 1.5 seconds after I hit "Add Your Comments".

/shrug

Maybe I should see someone about it too...............I'm so lonely.

[Brad @ Dec 11th 2007 1:30PM]

Say what you will about NBC, but leaving Apple really was the right decision for them. The iTunes / NBC was not a particularly good business deal for NBC. They didn't make very much money, and were under the thumb of another company, at the weaker side in negotiations. This whole venture is a chance for them to see if they can make money on their own, or if someone besides Apple is a worthwhile partner. So far, it hasn't really been that bad.

"It's okay, guys -- everyone needs a rebound."
It's true, and anyone looks better than that egotistical, abusive ex you came from. "You'll never do any better than me, but I could do way better."

[Mystic @ Dec 11th 2007 1:41PM]

Wow! No, the better business decision would be to have your shows sold in as many online stores as possible.

[Dan S. @ Dec 11th 2007 3:10PM]

You're right.... $15,000,000 in pure profit, with $0 invested by NBC Universal isn't a lot of money. Hell, if I was making only $15 mil by sitting around and picking my ass, I'd be dropping the source of my income like a hot rock and badmouthing them in public, too.

/sarcasm

[Brad @ Dec 11th 2007 4:38PM]

@dan s: Apple demands exclusivity, Apple demands total control over pricing (and therefore profit) structure. And $15M in revenue is NOT $15M in profit, and it certainly is NOT what 7.5M $2 sales come out to.

I'm sure it seems that way to you, but I'm also guessing you're about 14 and have little to no understanding of the volume of work that goes into inter-operating with a hostile business partner. It's a very time consuming and expensive process. If the people you're supposed to be "partnered" with give you destructive ultimatums, completely controls the advertising and marketing of your product, and effectively treats you like you have no place else to go, paltry profits (and yes, even $15M over two or three years is paltry) are not worth dealing with them. Plus this hurts Apple more than NBC, which gives NBC a stronger bargaining position if they decide to return to the table. Or if they negotiate with any of Apple's competitors.

The fact is that there are other places to go. AmazonUnbox, TivoDirect, Hulu, XboxLive store, and even NBC Direct (a free service where NBC makes money off adds and increased viewership), Video on Demand, IPTV, and more every day.

It isn't quite as simple as you make it out to be. They didn't get free money for a $0 investment. The truth is they probably netted less than $1M when you factor in the opportunity cost and the inability to sell to other media-player-directed stores (as has been implied, but never officially divulged, about Apple's video store contracts).

So go play with your iPod and don't assume you understand the slightest bit about an industry you are only the tiniest speck of, kid.

Note: "/sarcasm" implies that you are such a poor communicator that sarcasm can't be garnered from your words, and so must be outright stated. That's bad.

[Derbeste @ Dec 11th 2007 5:07PM]

"Apple demands exclusivity"

Source?

I'm only cuz just just last month I saw a slew of NBC downloadable on Amazon - well before NBC pulled out of iTunes.........wierd.

And just last week, I saw Fergie on sale on iTunes as well as Walmart.com and Amazon........surely reality has bended!

More bluntly stated....you're full of shit.

[Brad @ Dec 11th 2007 5:28PM]

The Apple store contracts are extremely closely guarded and as such are never divulged to the public. However there has never been an instance where content was offered on the iTunes VIDEO store at the same time it was offered by another device-centered store (Zune store, for example). Amazon does not have a device that competes with iTunes, so it is not part of that non-compete.

I actually discussed this further down in the post. Next time read the whole thing.

More bluntly stated, you're only semi-literate. Congratulations.

[ilogic @ Dec 11th 2007 5:31PM]

"Go Play with your Ipod" - Not the wisest comment from you, as NBC has simply partnered with another "Apple" that will only allow playback on a specific device with heavy DRM. You don't know much either. The difference is NBC gets to set the pricing scheme, so all this crap about doing things "on their own" is just as ignorant to say. Don't talk to people like you're an insider just because they, like you express a different degree of ignorance. Chump.

[Derbeste @ Dec 11th 2007 5:39PM]

"non-compete" is not NEARLY the same thing as "exclusivity".

Secondly, there is not a place in your posts where you specifically limited "Apple" to "iTunes VIDEO". Actually, when you say "Apple demands exclusivity", you are implying everything they run, iTunes VIDEO, iTunes AUDIO, and even iMAC.

You're still full of shit. Congratulations.

[Brad @ Dec 11th 2007 6:29PM]

@derbeste: Fourth paragraph of my original post, middle of the third sentence, but here it is again since you can't seem to make it that far down without getting lost or whipped into a frothy-mouthed fit:

"...factor in the opportunity cost and the inability to sell to other media-player-directed stores (as has been implied, but never officially divulged, about Apple's video store contracts)."

Next time argue against the entire post, rather than picking a specific sentence, claiming it is never discussed or backed up (though it is), or claiming that a poster on a public news site should somehow be able or allowed to pierce the corporate veil and explain to YOU the exact nature of Apple's media distribution contracts is just unrealistic, nor does it in any way weaken the primary argument I put forth.

All that I (or anyone else, for that matter) can comment on is what is plainly observable. If you can show me an instance where VIDEO CONTENT has appeared on the store of another device company (which competes with the iPod) at the same time as on iTunes, I'll happily redact that aspect of my statement. To this end, you have not actually provided any counterexamples. Fergie is a musical artist, and Amazon does not have their own iPod-competing device. I clarified the "exclusivity" comment in very post you argued it wasn't clear in.

I don't know what more you want, other than that at this point you're attempting to save face in front of anonymous spectators in a thread that's probably all but ignored, due in no small part to your dissolving it into a meaningless back-and-forth of "Nuh-uh!"

I strongly advise you to read up on John Gabriel's Greater Internet Fuckwad Theory (source: http://www.penny-arcade.com/comic/2004/03/19). I believe it may help you avoid such situations in the future. "You're full of shit" is in no way constructive or conducive to an open dialog. Consider that I didn't simply ignore your post but actually sought to impart some knowledge for what it was: not an attack on your character, but the simple fact that I work in this industry, and deal with these companies on a daily basis.

I'm done. Have a nice life.

[Mystic @ Dec 11th 2007 1:39PM]

Then why not keep it on iTunes AND offer it on other services that use flexible pricing? Oh, I know why, because this 'flexible' pricing will allow you to screw consumers even more.

[MrWhite @ Dec 11th 2007 1:45PM]

Not making much money and not making any at all are two different things. It would have been a much wiser choice to put your content on multiple online sources. 15 Million in revenue is nothing to snub your nose at, when they (NBC) didn't have to do anything other than wait for a check to arrive.

NBC was butt hurt because they couldn't tell Apple how to price the product. Because we ALL know there is a limit on what you and I would actually pay for content that we normally get for free and record on our DVR's. Apple knows this, NBC apparently does not. NBC fails hard at life, period.

[cliff @ Dec 11th 2007 1:47PM]

I almost feel sorry for SanDisk shacking up with the tards at NBC.
NBC's best DRM is the fact they make shows no one wants to watch anyway..
Ohh wait, I might tune in to watch the remake of "Knight Rider" next season.. How original!

[OptimusSlime @ Dec 11th 2007 2:20PM]

You do realize that SciFi is owned by NBC? And almost all of their programming is original?

[Nick @ Dec 11th 2007 3:17PM]

1. star trek and stargate spin offs are not "original"
2. *MOST* of the programming maybe "original", but almost all of it is crap.

[NHAnimator @ Dec 11th 2007 1:59PM]

Let's see, with the writers on strike, this is what NBC wants me to pay for:

Celebrity Apprentice and Deal or No Deal, from a beta portal, to a DRM device I don't own or want.

[NHAnimator @ Dec 11th 2007 2:00PM]

And isn't Take TV a USB flash drive? Even if I wanted to watch NBC shows, can they not be (legally) downloaded to ANY portable device now?

[Dan @ Dec 11th 2007 2:10PM]

Another thing you can say about rebound relationships - they never last.

[Tired_ @ Dec 11th 2007 2:31PM]

This whole thing between NBC and the iTunes Store reminds me of a petty, slutty girl I knew in high school. When she broke up with her boyfriend, she slept with every guy she could find, to get back at him. Seems like every day we hear about NBC getting into bed with another anything-but-iTunes store.

[Dan S. @ Dec 11th 2007 3:12PM]

Looks like no one ever told NBC about Electro-Gonorrhea -- aka "The Noisy Killer"

[Pretol @ Dec 11th 2007 9:08PM]

And Apple is like the dorky geek I knew in high-school, he never got laid with anyone. Just masturbated to the image of himself every night.

[darkzero63 @ Dec 11th 2007 2:59PM]

Sandisk products are usually a "flash" in the pan anyway.

[Db @ Dec 11th 2007 7:31PM]

Let NBC stay on iTunes and let them charge what ever they want and see how much money they get verses the *fixed* pricing.
Oh yea, and lets put the shows on a format that no one uses and ignor the iPod and Zune users.

[JohnTitor @ Dec 11th 2007 3:21PM]

I like Sansa's better than iPods but if they want the video business with Fanfare to work, they first need a player to support it not just a storage device like TakeTV. And they need more capacity. If they could bring back the old View with 32GB, they'll be on toward success

[rip @ Dec 11th 2007 3:30PM]

Let's see... NBC goes from a potential market of 50 million plus to a market of about 1,000,000.

Yeah, NBC is gonna make some kind of crazy money by jumping ship.

Zucker is some kind of genius.

[rip @ Dec 11th 2007 3:31PM]

sorry, I added an extra zero or 2 to that 1 million.

Its more like 100,000

[JohnPQ @ Dec 11th 2007 3:46PM]

I'm glad they left iTunes. Apple needed a good slap in the face. They are nothing but a bunch of greedy snobs. Could you imagine living in a world where they had 90% of the market? Very scary!

[Derbeste @ Dec 11th 2007 4:28PM]

Said world would be exactly the same except we would be referring to MS iPods and Apple Windows.

Maybe THIS is the world someone imagined! O.o Dun dun dun!

[jsk @ Dec 11th 2007 4:46PM]

And oh look, FanFare is Windoze ONLY. I am "shocked." (according to their FAQ, no Mac support at all and no apologies or even "support in the future if their customers ask for it" BS.)

Even weirder, while you can browse and preview video on your M$ box, you have to have use their little hardware device to actually watch the video. Wow, that's convenient. Got "Winner" written all over it.

[Matt @ Dec 11th 2007 4:50PM]

NBC is an anti American station and should be banned. Join the boycott on NBC and support our troops... down with NBC!

[noza @ Dec 11th 2007 5:23PM]

Yes, NBC does not support The Party or its Glorious Leader! All good, true Patriots should stand up to protect innocent Citizens from their un-American slander!

[Smack @ Dec 13th 2007 12:34AM]

85% of CONSUMERS own an iPod. Kudos, Apple. NBC does not like Apple controlling their own property, so they pull content. Fine. For NBC to expect that 100 million satisfied iPod owners are suddenly going to switch gears, buy a completely new piece of hardware and start using an inferior set of products and services just to watch NBCs CONTENT, then NBC is smoking crack. The Arrogant bastards deserve every penny they're not about to make in this deal.

NBC is a Dinosaur, trying to heave itself out of the tar pit folks. These are death throes, bid them good riddance and be done. The network does not make the show. They DISTRIBUTE IT.

Apple, you've made your stock price double this year, and served your investors, the public, better than most companies in this world. Keep it up, and do whatever you think is best, since ITS WORKING.

[Dan @ Dec 11th 2007 6:49PM]

Another step in the wrong direction! Another step to them collapsing on themselves. As usual with corporations, profits to them, screw everyone else over. IN reply to Tired_, they are probably going to be getting a diagnosis of STD's. Wait, they already do but they aren't listening to the doctor, oh well!

[CircleCircleDotDot @ Dec 11th 2007 7:55PM]

...Guess those iTunes sales would come in handy right about now with the $500,000.00 refunds your giving to all of your advertisers, since you have no new content due to the writers strike and your viewership is down, huh NBC?


Irony...

[josh @ Dec 11th 2007 8:58PM]

I love Apple. However, I don't want them to control all digital media distribution either, that would be disastrous. The thing is, Apple doesn't care about that. They want to sell iPods and Macs and iPhones and Apple TVs. And one way of doing that is by making it really easy and affordable to get all this great content.

Apple doesn't care if iTunes songs can play on non-Apple players. If they did they wouldn't have introduced iTunes Plus. It's not like Apple has been forced to start selling songs without DRM, they chose to do so. And the same goes with video, although right now the studios won't let Apple sell the video without DRM, or give it away. Apple doesn't own the video and they don't care about protecting it. Apple is betting that their hardware and software and digital storefronts are so much better that people will prefer to use them, rather than feeling forced. Few companies actually operate this way.

As to whether it made sense for NBC to pull out of their deal, that's certainly debatable since we don't know the details of their contract. I would argue that the revenue they were generating is significantly more than they're going to generate through other means, but they have every right to try their luck. It's possible that their contract forbade NBC from making video available in certain other formats/avenues which they would have liked to try out, and that's why they left iTunes. If they had been free to experiment, it would seem logical that they would do so, and if they started making more money through some other means they would surely drop iTunes or attempt to renegotiate. If not, they still have that revenue coming in. My guess is that's exactly the sort of thing Apple would try to stop, and so this very well might have been NBC's only recourse.

That being said, I don't think their announced partnership with Sansa is a step in the right direction, seeing as how (as many have pointed out), they've only left one closed system for another, much less popular one. The only way NBC is going to be successful (on the scale of iTunes) with videos is to make a better experience than iTunes. And the first step to doing that is realizing that more DRM (which they control) is not going to make a better experience.

[Pretol @ Dec 11th 2007 9:04PM]

If apple is so friendly and happy. Tell me why is iTunes incompatible with every single player other than iPod? Apple is a monopolistic SOB, they try to grab everything and serve it only through their apple channels to the apple customers.

[josh @ Dec 11th 2007 9:16PM]

@pretol If Apple is a monopolistic SOB then why do they have songs called iTunes Plus that you can play on any player you want? In a few years' time (maybe less) all songs will be sold without DRM and you can freely buy any song off iTunes and listen to it on the player of your choice.

[Pretol @ Dec 11th 2007 9:01PM]

Oh, when... when will they come out with a generic distribution model where everybody can download whatever show and play it on whatever player they have? A place online where you can watch the shows (with advertisment every 10 mins, I don't care) Screw iPod-only iTunes... Screw some SanDisk distribution model (whatever it may be), or maybe it's friendly to non-San players, doubt it...

There's a reason you can find torrents of these shows season by season. Nobody is providing this stuff... All these solutions are failing, including the mighty (selfish) Apple's iTunes...

[h0mi @ Dec 11th 2007 11:01PM]

Wow. Just what we needed. Another download service. And you thought the blu-ray HD DVD format war was bad.

Look at the bright side. Anyone who thinks HDM is going to die so that digital distribution will take it over... you're not looking at what a mess DD is right now.

[joshdill @ Dec 12th 2007 9:28AM]

But that's what this whole debate is over. FanFare won't be "another download service" because no one who uses iTunes is going to drop it and come running to a new device, on a new service JUST to download NBC shows. If they were interested in NBC content, they probably bought an iPod already. The bigger point is that NBC obviously doesn't "get" the digital market. If they did, they wouldn't pull their shows off of the #1 online music store (#4 music store, online or otherwise). They're throwing away their prime real estate to go with an unknown service. So, since they don't get it, how do you think they're going to promote this new content service. They're not. Maybe there will be a banner ad or two on their website, but you can bet they won't run a TV ad for the service. When they were on iTunes, the content advertised itself because it was ON iTunes. Now, if NBC wants to sell shows online, they're going to have to invest in marketing the product, something they couldn't do before. Is that really worth the pennies per episode that they couldn't make on iTunes?