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NBC: No New iTunes Contract
Thursday, August 30th, 2007 at 4:00 PM - by Jeff Gamet
NBC Universal has decided not to renew its contract to sell TV shows through the iTunes Store. The media company apparently notified Apple of its decision Thursday night after failing to reach an agreement over pricing, reports the New York Times.
An anonymous source close to the contract negotiations leaked the information, and later an NBC Universal spokesman offered a confirmation without additional comments.
While the breakdown in negotiations shows the tension between Apple and media companies that want more control over download pricing, it doesn’t mean that NBC’s shows will disappear from the iTunes Store tomorrow. The broadcaster’s contract runs through December, so there is still time for both sides to come to an agreement.
Most media companies feel Apple has too much control over music, movie, and TV show download pricing, and are looking to charge consumers more and also want the iTunes Store to offer subscription services as well. Apple, however, has maintained US$0.99 per song and $1.99 per TV show downloads. The company does offer a sliding price scale for movies that starts at $9.99.
Apparently, NBC Universal also wants stricter piracy control, and is also pushing to sell videos as bundles to increase revenue. For example, NBC could cash in on the popularity of Steve Carell by selling The 40 Year Old Virgin and an episode of The Office together.
NBC Universal isn’t the first company to try strong arming Apple by refusing to renew its iTunes contract. In July, Universal Music Group decided not to renew its annual contract with Apple and instead move to a month-to-month deal where it could pull its music library from the online store on short notice.
While threatening to pull content from the iTunes Store may seem like a good way to force Apple into changing download prices, it could ultimately backfire on media companies. Consumers could interpret the move as an attempt to milk even more money out of them and ultimately turn to illegal file sharing services -- which in the end leaves studios and labels with even less money.
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