Why NBC and Time Warner Are Dissing the iPad

Last Updated Jun 2, 2010 3:23 PM EDT

A number of major TV companies, including NBC (GE) and Time Warner (TWX), have reportedly decided not to make their programs work with the iPad. The firms cite the expense of transitioning from Adobe (ABDE) Flash, currently the industry standard for web video. But their decision has more to do with fears over Apple's (APPL) growing power than it does with technical expenses.

First let's examine the canard that a costly transition from Flash is the real issue. NBC actually showed off a prototype of an iPad friendly site to the NYT back in April, then killed it at the last moment. And earlier this month NBC began streaming some of their shows over the iPhone, but bypassed Apple's approval process. The critical issue for NBC isn't cost, it's control.

These major television companies are afraid of ending up in a position similar to the record industry. With its iPad and iTunes store, Apple helped destroy the traditional business of selling physical albums. Big TV met with Apple last fall, before the launch of the iPad, and rebuffed offers for both a subscription service and an a la carte store on the iPad. These firms don't want Apple as their gatekeeper. J.B Perrette, president of digital distribution at NBC, also said his firm wants to avoid the piracy wars that have hurt the music biz, "We have a very viable alternative to the transactional business, which is the ad-supported business." But this leads to another sticking point, Apple's iAd network, which aims to collect 40% of revenue from ads run on their platforms. Big TV probably wouldn't be subject to the same split as smaller third part developers, but they may not want to share any ad revenue with Apple at all.

NBC and Time Warner are both aggressively pushing their own visions for the future of television. In NBC's case it's the streaming site Hulu, which became profitable this year, a very quick journey into the black by the standards of the web. For Time Warner, the future is the agnostic TV Anywhere, which lets paying cable subscribers see their programs on any screen with an internet hookup. To provide leverage for these projects, big TV companies are waiting to throw their weight behind Apple's competitors.

Both Dell (DELL) and HP (HPQ) have tablet computers coming out, and Google (GOOG) TV isn't far behind. These three options will all be running Android, which will soon be compatible with Flash. That would allow firms like NBC and Time Warner to design a single streaming site over which they will have much greater control. It seems these companies are willing to sacrifice iPad viewers, 2 million and growing, for the opportunity to do things on their terms.

Related:

  • Ben Popper

    Ben Popper writes at the intersection of culture and technology. His work has been published in the NY Times, Washington Post, Fast Company, Rolling Stone, The Atlantic and many others. He lives at www.benpopper.com.