Tuesday, September 04, 2007

NBC's Incredulous Move

NBC's move to remove their shows from iTunes is a terrible misjudgment. iTunes is able to get people to pay for a product that is offered for free. It's like selling water. People are willing to pay for the convenience.

JP Morgan Analyst Spencer Wang, estimates that networks make a revenue of 1.44 per downloaded episode, compared to just 57 cents per television viewer through advertising revenues (article).

Many consumers who were willing to pay good money for an episode will go through less than legal means to acquire the show. There is no way NBC can recoup the lost revenue from their internet TV venture, Hulu, which has a questionable choice of name and will compete with ABC.com which streams shows for free.

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