NBC's Videos Leaves iTunes for Amazon.com's Unbox

PVRblog pointed out that NBC has decided to pull its programming out of iTunes and move it to Amazon.com Unbox, a fairly new service from Amazon.com that competes with iTunes for video download sales. I think this is a mistake on NBC Universal's part, and it has little to do with the fact that I own an iPhone.

One of the things that entertainment companies should realize is that the device choices that early adopters make will have a big impact on entertainment companies' download sales in the short term. I know that I am a lot more likely to buy video content from iTunes now than I was before I got my iPhone. There are hundreds of thousands of people who bought an iPhone since June 29 who probably feel the same way.

What compelling device will drive new customers to Amazon.com to purchase videos from Unbox?

The list of portable devices that are compatible with Amazon.com Unbox is uninspiring. The most compelling device that's compatible with Unbox is not portable. It's TiVo.

I am a big TiVo fan and a long time user, and I buy a lot of stuff from Amazon.com, but I don't have the capability to play Unbox videos on my unit. (It's a DirecTV-based TiVo, so it doesn't have the Internet networking features of the pure TiVo units that make Unbox available.) Since most of U.S. households don't have TiVo units compatible with Unbox either, I think NBC has limited significantly reduced its potential audience for video download sales.

In a broader sense, I don't see how the Unbox service creates sales momentum for itself based on exclusive content deals alone.

It's possible that NBC's strategic error will become more apparent after Apple announces its new line of iPods this afternoon.