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Details of Apple, NBC Squabble Emerge
Wednesday, October 24th, 2007 at 4:00 PM - by .(JavaScript must be enabled to view this email address)
NBC is obtaining far less than one percent of its TV renevue from iTunes, according to a Washington Post report on Thursday that revealed new details related to the squabble between Apple and NBC.
In the course of describing the current state of the conflict between NBC Universal and Apple over pricing control, Frank Ahrens provided some previously undisclosed details.
First, NBC Universal has confirmed that it sent a letter on October 9th asserting that Apple is in breach of contract. However, it is doubtful NBC will pursue legal action. The negotiations have ground to a halt, according to the report, and there is no resolution in sight.
Second, NBC claimed that before the breakup, its shows accounted for 40 percent of all the television programs purchased on iTunes. Apple said the number was more like 30 percent.
Also, while music companies depend on iTunes for 15 to 20 percent of their revenue, it is far less in the case of TV shows. In contrast, citing anonymous sources, the reporter said that iTunes revenues represented "far less" than one percent of NBC Universal’s revenues -- only about $15 million.
Finally, regarding the core disagreement on pricing, the report provided details on the pricing proposals. According to another confidential source, Mr. Ahrens wrote that NBC proposed a range of prices for shows and packages on iTunes ranging from 99 cents up to $2.99. Apple declined that offer and later said in a press release that NBC wanted as much as $4.99 for some shows. NBC denied that, Mr. Ahrens reported.
Who has more to lose is the current question. Tim Bajarin of Creative Strategies pointed out that the sales of the Apple TV have suffered as a result. However, he also pointed out that NBC’s action was a "mistake."
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