I posted a piece, approximately six weeks ago, around the notion of shifting leverage in the pervasive world of distribution and content:
The topic, as it relates to Apple in particular, continued to heat up this past week. NBCU announced it is not planning to renew its distribution arrangement with Apple’s iTunes product come December. Apple then turned around later in the week and suggested it will pull NBC content down altogether in the September timeframe. Here was one piece I liked on this topic during the week:
There is obviously some jockeying going on in this case. NBC content accounts for 40% of the video sales of iTunes. NBC is in a JV now with Fox to launch a new digital platform called Hulu. Clearly, some of this relates to the fact that NBC is posturing that Hulu’s presence makes them less reliant on the iTunes distribution platform. Humorously, a few places including TechCrunch, noted last week that Hulu means “cease and desist” in Swahili. Some branding and trademark folks clearly didn’t do their homework on that one.
But, aside from the negotiations, if Apple was to lose NBC content, or jettison NBC content in the coming weeks, it will have little impact on iPhone or iPod sales. I do question though what happens if this is the beginning of other video content providers going away. Apple is set to announce some exciting new iPod feature updates this week, which will likely include Wi-Fi integration. But, the higher priced iPods rely largely on video. For those reasons in part, here’s betting NBC and Apple have a deal in place come the expiration time of the contract in December.
So, the answer to my question stands that content is still king when it comes to Internet distribution. As the article at the beginning of this piece correctly states though, I’m also betting Apple and Steve Jobs start making some more aggressive plays to take control of the content, as was the case with Jobs and Disney last year. These kinds of negotiations have to be nothing but infuriating to Steve Jobs in this day and age of Apple brilliance.