Monday, September 3, 2007

Quick update to Friday's post about how NBC Universal has nixed its iTunes deal. At the time I published that post, I wrote: "The current contract runs through December; after that the videos will be pulled."

Over the weekend this dispute grew more rancorous, and according to Apple the videos are basically being pulled now instead of in December.

Macworld UK reports: "All NBC Universal content will disappear from iTunes. Apple's agreement with NBC ends in December. Since NBC would withdraw its shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September.

NBCU disputes the earlier pullout date in a statement by Cory Shields, executive vice president of communications for NBC Universal: "All our returning series, including new episodes, will be available on iTunes through the remainder of the contract, which expires in early December."

PaidContent notes that Shields "[isn't] saying how NBCU plans to make Apple follow through, but he also left room for a resolution before the contract expires."

Also according to Macworld UK: "Apple claims the decision was driven by NBC's attempt to double the wholesale price it charges for each NBC TV episode sold on iTunes. An Apple press statement explains this, 'would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99.'"

NBC Universal denied that last Apple claim: "We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers."

Media blogger Terry Heaton is skeptical about this: "Sorry, I don't buy that. Nobody from Hollywood does ANYTHING that makes things 'more attractive for consumers.' It's all about money, and Apple -- the folks who invented this source of revenue for everybody in the first place -- is trying to help us by keeping prices low. ...Losing this content hurts NBCU much more than it will hurt Apple."

Also, last Friday I wrote that NBC Universal is reportedly "iTunes' top supplier of digital video, accounting for about 40 percent of downloads" -- a figure which came from NBC Universal. Tidbits contributor Barb Iverson points out that this figure is in dispute. Quoting Forbes: "Apple says the network accounts for 30 percent of TV show sales (iTunes also sells movie downloads). Either way, it's a significant chunk, although the sales remain too small to generate a meaningful amount of revenue for either side."

Forbes also predicted that TV networks will probably opt to stay with iTunes, but over time will try and provide free program downloads that include advertising.

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