So NBC tells Apple to stick it. Apple says good luck with that. And now NBC is going it alone. Didn’t anyone pay attention when the music labels attempted to do this with their highly-restrictive, DRM-plagued, over-priced music stores of yore?

FSJ chimes in and, as usual, he nails it.

So, fair enough. Bring on the big media cluster fuck. Roll out all the different systems that don’t work together. Bring on all the different kinds of software, none of which will work as well as iTunes. Bring on a zillion different user interfaces, a zillion accounts you need to set up, a zillion new usernames and passwords and a list of which services can work on which devices in which format. Right. When you’re good and tired of that, we’ll be here waiting for you.

Just like the iTunes Music Store, the only way online video distribution is going to succeed is if all the studios agree to common prices, consistent DRM (or none! Imagine that?), and centralized availability. I should be able to get every TV show / Movie from one source, and I shouldn’t have to worry if it’ll play on the various devices I own. I want to watch it on my computer, and my TV, and iPhone, and my iPod. And I’m not going to pay for the same content multiple times to have that privilege. Of course this assumes you’ve bought into the Apple platform, but come on… is there anything available that’s actually better?

Now, all that said – this is an interesting play by NBC, simply because it appears to be a last-ditch effort to hold on to their old business model. At the moment, customers are currently accustom to paying nothing for their television content. Yes, I recognize that you’re paying the cable company, but you’re not paying for the video content itself. Those costs are subsidized by commercials you’re forced to watch.

Give away the content for free online; force viewers to watch commercials; maintain traditional revenue channels; screw Apple and retain control.

I’m sure that sounded good in the boardroom, but it won’t work. Just like the old music stores, DRM, price inconsistencies, and technical complications are all going to get in the way and kill the experience. It’ll be too complicated for the masses, and it’ll eventually die.

I give them 8 months before they’ve got all their content back on iTunes, and 12-24 months before they abandon this new venture altogether.

Now, if only Apple would allow me to download video content directly from the Apple TV. Methinks that, just like the iPod Touch/iPhone there’ll be a iTunes WiFi Music Store available in an update soon.

Or so I hope.

Apple hosted a special event today, and beyond the new iPods and iPhone announcements, Steve Jobs offered up a few stats about their iTunes store that really echo my comments in yesterday’s post

• 600 million copies of iTunes distributed.
• Over 3 billion songs bought on iTunes.
• iTunes is the number one online music store in all 21 countries Apple operates in.
• Started with just 200k songs, but now has over 6m songs in every single one of those stores. Millions ahead of anyone else.
• iTunes is now the number 3 music retailer in the US —behind Wal-Mart and Best Buy, ahead of Amazon and Target.
• For 2006, 32% of all the music released in the US were digital-only releases. A THIRD of the music released was digital only.

Funny, we don’t hear much from Napster and their music subscription services these days… I wonder why.

Rick Rubin, founder of Def Jam records and “career-transforming, chart-topping, Grammy Award-winning producer” was profiled in the latest issue of the New York Times Magazine. Rubin, much respect for everything you’ve done over the years, but dude, you’re way off with this one.

“You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. “You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”

No, seriously. A subscription model? Again? Haven’t we covered this ground already? You have to be kidding me.

As Gruber points out, that technology ship has sailed and no one was on board. No one wants DRM, which means no one wants to subscribe to a service for their music. You can’t have one without the other.

Too all the record executives out there, listen up. Music subscriptions (and the DRM that comes with it) are not the magic bullet that will solve your piracy problem. It won’t work. Give it up. Move on already.

Rubin goes on to say,

Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business.

The new model is already here. It’s called iTunes. Stop fighting the inevitable and just accept it. Take a deep breath. Take it all in.

Of course Universal isn’t going down without a fight. And NBC is doing the same with their video content, but seriously guys, you’re not going to do any better. And Microsoft isn’t going to help. Neither is MTV. Or Real (opps, same as MTV, right?). Or Sony.

Apple is the only player in town that got it right and as FSJ pointed out, the record labels just woke up and realized “all the power in the value chain resides in one player.” Oops.

Here’s the thing. These guys could have done what we did. In the early days of the Internet, everyone figured the majors would build digital distribution arms. But they didn’t do it, because they didn’t understand technology, and they didn’t want to invest in building this expertise, and they were freaked out about piracy and paralyzed with fear. So we stepped in. We made the big investment. We hired programmers. We developed software that’s easy to use and works flawlessly. (If you think that’s trivial, think again. It’s huge.) We ran the system. We promoted it, we marketed it, we haggled with all the majors and struck deals. We took all the risk, which was considerable. Now we’re reaping the reward. And the majors want a bigger slice. Um, for what? We did all the work. Ain’t gonna happen, slick.

Tower Records has been replaced by iTunes. MTV has been replaced by YouTube. MySpace has been replaced by Facebook (until something replaces it of course). I had hoped Pandora would replace radio, but, of course, the RIAA went and sued them. Bravo guys. Bravo.

Ladies and gentlemen of the record industry, may I have your attention please. This is the new playing field people. Kicking the corpse isn’t going to bring it back to life. Stop denying it. Stop fighting it. Just embrace it.