iTunes showdown brewing: Content owners vs Apple

iTunes showdown brewing: Content owners vs Apple

Summary: Update: Apple and NBC Universal confirmed Friday that NBC shows will not be sold on iTunes.In a statement, Apple didn't mince words:The move follows NBC's decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.


Update: Apple and NBC Universal confirmed Friday that NBC shows will not be sold on iTunes.

In a statement, Apple didn't mince words:

The move follows NBC's decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.

Apple then jabbed a bit more:

"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

As noted in my original post, the NBC move could become a big issue for Apple. And judging from the tone of Apple's press release Cupertino is miffed to say the least.

Original post from 4:41 a.m. PDT follows: 

NBC Universal's television shows won't be on Apple's iTunes after December if the two sides don't come to a deal.

According to the New York Times, NBC Universal couldn't come to an agreement with Apple on selling its shows on iTunes. This news comes just a few weeks after Universal Music Group said it wouldn't renew its iTunes contract and sell its tunes at will. A deal could still be reached between NBC Universal and Apple.

The NBC Universal move also comes as the General Electric unit is launching Hulu, a video joint venture between NBC and News Corp. NBC Universal was reportedly seeking better piracy controls and wanted Apple to allow it to bundle videos. The newly named Hulu, which will launch a private beta in October gives NBC Universal leverage.

Content companies are miffed that Apple has so much control over pricing. The game plan for these media giants has been to develop rivals, join other ventures from Apple rivals and place bets with startups such as Joost. While many of these new video ventures are designed to thwart Google's YouTube Apple is also a big target.

If these defections--CBS and News Corp. have iTunes deals--become a stampede Apple could have a few issues. NBC Universal owns popular shows such as "Heroes" and "The Office." In fact, the only iTunes deal that would be 100 percent safe is Apple's deal with Disney. Via the Pixar acquisition, Steve Jobs is on Disney's board.

Topic: Apple

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • They'll fail.

    Apple is doing us a service by stopping their corporate greed.
  • Opens the door for other content providers

    If too many of the "big boys" pull out, Apple could open up iTunes so any independent musician or filmmaker could sell their stuff directly through iTunes. That would make things really interesting.
    • Universal represents one entity woho ...

      ... cancelled two agreements so they could justify opening their own on-line store. So what?

      They are not going to take those customers away from Apple unless they undercut Appleon price - and Apple's pricing seems to be the bone of contention.
      M Wagner
  • Apple better fix this.

    I don't know what I'll do if I cannot download BSG from ITMS. I know what I won't be
    doing. Installing Cable/Dish television service.
  • And I should care?

    Lets see I'm paying a kings ransom each month to Cable company and I-Tunes wants me to pay more for Universal shows online? Sorry not going to happen, not unless I can ditch cable first.
    • That's exactly what I plan on doing....

      I'll be getting a new 24" iMac with the 2.8ghz Extreme processor. Using Boot
      Camp I'll setup an XP partition for game playing mostly. I'll use iTunes for my
      sterio system (Purchasing some external speakers to go with it) and my TV/Movie
      source as well. Now in the likely case that iTunes does not carry some things I
      want to watch I will purchase DVD sets of entire seasons and hopefully still be able
      to avoide those blankedy blank commercials that waist my time and I don't have
      time to waist on junk and salesmen. I already have a routine for watching DVD
      movies I purchase...I plop the DVD into my player and go do some smallish
      errands like quick phone calls check my email things like that till the commercials
      and previews on the DVD have passed then I sit down to watch my movie. I'm a
      bit insulted that I pay for a movie and the still try to force commercials on me. I
      hope Apple sticks to her guns I'm more than happy to pay for what I want to watch
      rather than be charged by Cable or others for a whole host of stuff I'll never watch
      and then to suffer the added insult of commercials and endless repeats. Take
      SCFI...once in a while they play a good series like Dr Who or BattleStar Galactica
      but for the most part they play things like "Big Snake" or "Really Big Snake" pure
      junk. HBO and the like play a good movie or two once in a whille then repeat it for
      a month or more. I'm dumping cable NOW!

      Pagan jim
      • personally I don't mind the them

        I like the previews. What I don't like is not being able to skip them.

        As for Cable. If I could get all my shows from downloads at 2 bucks a show I'd dump cable right now. Actually I'd dump cable if my wife could get her reality TV shows from downloads. I'd be just as happy waiting for the DVD to come out.

        I do watch other shows. I like the HGTV and Food TV but only a few shows on those channels. If I could get them I'd download them.
      • Ungrateful swine

        "Really Big Snake" was a nuanced, Emmy worthy masterpiece. "Ice Spiders" thrilled me to no end, and "Monster Man" rocked my face, pure and simple.

        I can't even begin to describe the number of times my experience with "Shark Attack 3: Megladon" has saved my life.

        Keep the SciFi original movies coming!
    • I live in Europe

      I get the shows sometimes before they ever get here and get them in English.

      Apple has sold 3 Billion songs/videos/shows, etc. I think they will come up with a way of managing this.

      If the business model weren't so successful, why would the providers be threatening and asking for more money all the time?

      Apple will do their homework and tell NBC they can appeal to the Zune crowd. That will get them to chill.
  • What is so irritating about this story

    Apple created THE single successful online business model and it works incredibly well for anybody.

    Now NBC wants to threaten them because they are trying a different model somewhere else that brings in more money per unit but far less total than iTunes.

    Does NBC tell Amazon what price they will charge? I think not. Wal-Mart? Nope. BestBuy? Not a chance.

    But they are going to try to Apple what to charge so that they can get more out of a really successful model.

    Who loses? You and me.

    I'm ready to cancel all my NBC podcast subscriptions now. Who needs them? Not me.
    • Don't buy less, buy more

      So they are killed if they do pull from iTunes.
      • I think content providers FEAR Apple more than we know.

        They see AppleTV, iTunes, iPods and now the iPhone all gelling together to a
        lesser extent even the new iMac's point to Apple growing influence and potential
        for greater influence in the future. With all those devices that are capable of
        playing TV and Movies as well as music Apple could become THE player of choice
        and if trends keep going as they are now it's not too hard to imagine. CABLE even
        TV has pretty much gone as far as it can go. What can they bring to the table?
        What WOW factor are they going to offer us? They are trying deperately to stick to
        the old formular of stale dull "packages" and hesitantly moving towards "ON
        Demand" but only begrugendly doing that and still trying to figure a way to shove
        the old formular commercials down our throats while we pay for on demand.

        Still Voska does have an interesting idea "IF" I could get commercials that specifcly
        interest me AND I could get them in limited amounts then I would be interested
        perhaps. Still today for 15 to 20 mins of entertainment I get a lot of intereuptions
        and roughly 10 to 15 minutes of commericals.....THAT IS WAY TOO MUCH FOR
        TOO LITTLE!!!!

        Pagan jim
        • I doubt FEAR comes into play at all

          The reality is that NBC is creating the shows that are being downloaded, not Apple. The question then becomes are people downloading the shows becuase they go to iTunes, or do they go to iTunes to download the shows?

          If The shows are driving more people to iTunes, then NBC can charge more for their shows as they are a business, just like Apple is, correct?

          We do it ourselves. We all sell our wares on ebay as we know that if someone wants our merchendise bad enough, they will pay more for it, and we are happy to let them do so, so why should we get upset that NBC wants to do what we ourselves are doing?

          Networks bid on shows themselves, and if a contract with (we'll say Paramont) runs it's course, a network will pay more to renew if the price is higher, if they see the advertsing revenue that it has been generating.

          My guess is that NBC does indeed see the revenue that Apple is generating from the sale of NBC shows, and has a better bargining position, and [i]that[/i] may actually be a little frightening or worrisome to Apple.
          • I don't think Apple makes a huge amount off of TV

            and or Movies sales but rather Mac's, iPods, and iPhones...... Now do you think no
            NBC shows is going to effect that? Hardly. In fact Apple can always add the
            format that NBC offers for her shows to the iPod and iPhones even Apple TV is
            Apple see's a need to do so like NBC shows and or lack there for of is going to
            effect the iPod and or iPhone anytime soon. No I think NBC is taking a risk again
            for more revenue but being penny wise but pound short as the ole saying goes.
            Or to mix metaphors actually killing the golden goose. Still I understand content
            providers are facing an uncertain future and advertising revenues may shrink as
            audeances go elsewhere that must give them cold sweats at night I would think.
            Apple does not require said.

            Pagan jim
  • NBC isn't known for their smarts...

    You'd think a network just barely able to keep viewers would not go around pissing in peoples pools.

    I guess it's clear why they are in the shape they are in now.
  • I'm not about to give up iTunes and my iPod

    Let's see, I have a large investment in media content from iTunes, I have an iPod,
    multiple computers (Mac and PC), plus I love the quick and easy use of iTunes at a
    price that I believe is reasonable, what in the world makes NBC think that I am
    going to switch to some other outfit that is more expensive, less reliable, and less
    convenient. I'm not about to pay $4.99 or whatever it is to watch a TV show. I'll
    just stop buying or watching anything from NBC. The last thing NBC should be
    doing is punishing paying customers. They'll lose customers and encourage piracy
    rather than make money. I've tried some of the other online media stores out
    there just for grins on my PC (Amazon and Wal-Mart in particular) and although
    they may be cheaper, they don't seem to be nearly as convenient as iTunes. To
    me, iTunes has found the right balance between price and convenience.
    • Same here (except

      I use an Apple TV rather than an iPod). I almost bought several episodes of The
      Office last year just because they were available right there in iTunes. I wouldn't
      bother to go out looking for them on some other yet-unknown service, and
      especially not if they cost more than $2.

      The best bet is probably to just invest in a TV tuner card and record them from live
      TV, DRM free.
  • Apple is the worst bully in town

    It used to be that Microsoft got this moniker more than anyone, but I think over the past few years Apple has become the most greedy company on the block and they act like they are the only company to offer the products they do. I think Apple needs the content providers a heck of alot more than they need Apple. But Apple continues to loose contracts and claim they are the go to guy. Itunes is not even number one in sales, they are like 3 or 4. The arogancy of this company is becoming evident more each and every day. Starting to make Redmond look like an angel.
    • I totally agree

      Nice post!
      • zealot you are Shill n, two here .<NT>