Tuesday, November 08, 2005

Why NBC, CBS and DirecTV are a Pack of Idiots

CBS, NBC to Offer TV Shows for 99 Cents - Yahoo! News. Here's how they think they're going to compete with Apple:


  • DirectTV is shipping new DVRs
  • DirectTVs DVRs have 160 hours of prorgramming -- they'll let the consumer use 100 hours, and they will download 60 hours of content which the consumer can then purchase, at 99 cents a show.


In other words, people who can already record the shows will be the only ones who can purchase the shows. Also, they are downloading EVERY single show for sale onto EVERYBODY's DVR, and then asking them if they want to buy it. So the bandwidth costs are alread spent by the time the consumer decides to buy -- and if they don't, DirecTV is out of luck. Mostly, people won't. If only 5% of all people buy a particular show, that means they have to charge at least 20x what it cost to deliver that show to recoup, which they either aren't doing. Apple, meanwhile, charges only to make a single copy of a show, $1.99. All that goes back to the Studio, with no additional bandwidth costs to Apple, the studio, anybody.

A pack of screaming idiots at NBC and CBS, not to mention DirecTV. This sort of thing could bankrupt them.

1 comment:

Steve said...

Here's another reason why they're idiots:

They're leaving the commercials intact on the purchased copy.