“NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes,” Brooks Barnes reports for The New York Times.
“The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday, according to a person familiar with the matter who asked for anonymity because negotiations between the companies are confidential,” Barnes reports.
“A spokesman for NBC Universal, part of General Electric, confirmed the decision, but otherwise declined to comment. A spokesmen for Apple declined to comment. The decision by NBC Universal highlights the escalating tension between Apple and media companies, which are unhappy that Apple will not give them more control over the pricing of songs and videos that are sold on iTunes,” Barnes reports.
“NBC Universal is also seeking better piracy controls and wants Apple to allow it to bundle videos to increase revenue, the person familiar with the matter said,” Barnes reports.
MacDailyNews Note: Please see related article: NBC: Apple’s iTunes, iPod powering broadcast ratings for ‘The Office’ – January 17, 2006
“In July, the Universal Music Group of Vivendi, the world’s biggest music corporation, said it would not renew its long-term contract with iTunes. Instead, Universal Music said it would market music to Apple at will, which would allow it to remove its songs from iTunes on short notice,” Barnes reports.
“The action by Jeff Zucker, NBC Universal’s chief executive, will not have an immediate impact on iTunes. The current two-year deal extends through December, so a vast video catalog — some 1,500 hours of NBC Universal’s news, sports and entertainment programming — will remain available on iTunes at least until then,” Barnes reports.
“The two companies could still reach an agreement on a new contract before their current deal expires. While each side has so far refused to budge, the talks will continue and have been free of acrimony, the person familiar with the matter said,” Barnes reports.
Full article here.
Welcome to big league hardball!
Please note that the shows are all still available on the iTunes Store. The threat of their removal and the leak to the press is simply a negotiating tactic initiated by one side or the other.
We doubt the shows will ever be removed. [UPDATE: 12:08pm EDT: Apple has pulled all NBC content from iTunes Store as of September 1st. The battle is on!]
We would not bet against Steve Jobs to come out on top in tough business negotiations.