Is Apple’s inflexibility its Achilles heel?

Another twist in the NBC-Apple saga: after dumping iTunes as a distribution method for its TV shows, the peacock network has cozied up to Amazon and its Unbox service instead. It appears that Amazon — whose movie-distribution unit likely has one-millionth the market share that Apple’s does — gave NBC more flexible pricing terms than Apple was willing to.

achilles.jpgIn particular, NBC gets the ability to offer a series of shows as a bundle, which is the kind of “if you want the good stuff, you’ll have to take some of our other crap as well” deal cable subscribers have grown accustomed to. Apple has said that NBC wanted to boost the price of its shows almost four-fold, but from the sounds of it, Apple didn’t want to offer the kind of bundling NBC wanted either.

Apple has routinely resisted the pleas of both record companies and TV networks when it comes to variable pricing. As far as Steve is concerned, it’s one price or nothing, and Apple has argued that this protects the buyer by making things simple and keeping prices low. And as the dominant provider, the company has been able to maintain that position and have companies bow to its wishes. So far.

But would variable pricing be such a bad thing? Why shouldn’t users be able to pay less for the crappy stuff and more for the really in-demand content? That’s how other markets — markets that aren’t effectively controlled by one provider — usually work. Why is Apple so opposed to differential pricing? I must admit I don’t really know. But NBC’s move is evidence that content owners will go elsewhere if they can’t get the flexibility they want.

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About mathewi

I'm the chief digital writer at the Columbia Journalism Review in New York, and a former writer for Fortune magazine and the Globe and Mail newspaper.