“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.
@Mac Realist
I’m sure you’re kidding, but in case you’re not:
Are you kidding? “Bealeaguered”? Are you still living in the 1990s? Apple has about $14 billion in the bank, zero debt, accelerating sales and margins in their desktop and laptop line, 20% of all new laptops sold in this country are Apple laptops, roughly 50% of those new laptops being sold to former PC owners, increasing margins, the most successful retail business in the United States by sales per square foot, just about the fastest-growing growth in retail history…
I could go on, but, as I said earlier, I’m sure you’re kidding.
Don’t feed the troll. He’s on a restricted diet of warm crow.
Jeff Zucker ( sucker) is a loser. He has accomplished a very little since he joined NBC. He has no vision for NBC future.
Mac Realist – you forgot to use the label “beleagered”.
When exactly do you predict that Apple will go bankrupt?
Same old same old…
Universal is trying to play hardball… but they have very little leverage.
Apple (from most reports) makes very little on iTMS media. The songs and video files are sold with a razor slim profit. Apple makes their money off iPods and computers.
Universal on the other hand risks losing a big revenue stream if they seriously consider pulling off the iTMS completely.
They can bluff and blowhard all they want. At the end of the day; Universal needs iTMS more than iTMS needs Universal.
I know it has been at least a decade since I watched anything on NBC.
Tivo. I’m not going to say it again.
Tivo.
So I lied.
Just get Tivo and forget all these wallet snatchers.
MDN Take:
“Please note that the shows are all still available on the iTunes Store”
Of course, if I recall correctly, they have contract until December. Let’s see what happens then, shall we? Did you expect an inmediate massive content withdrawal?
Possibly they are trying to see if Apple backs its position in order to offer other conditions. Have to agree there
NBC has got it all wrong. Apple is the villian of price control:
the Office, season 1 & 2: total of 28 episodes
itunes: $55.72 ($1.99 episode)
wal-mart (per thier website): 39.87 ($1.42 episode)
Also, with itunes thier is no production cost or cost of materials. So, big bad low price slinging Apple is way more expensive than Wal-mart. Hmm, I don’t hear NBC complaining that Wal-mart is playing hard ball. Losers.
they’re bettng on hulu.com
we’ll see how this goes.
Apple should strike a deal with Netflix video downloads.
go fig, NBC <i>universal<i> is trying to pull their stuff from iTS. who’da thunk it?!?
why is it that all these companies seem to be so gun-ho about trying to take down something successful by Apple, but don’t seem like they wanna do the same for anything M$?? “we’re gonna pull away from iTS and start using M$ media player (or anything M$ for that matter) b/c this iTS is just getting to be way too popular.” nevermind mediocresoft has been doing what they are claiming Apple is doing now for years. i know 2 wrongs don’t make a right, but why is it so horrible when Apple does something like this, but none of the companies seem to care that M$ is doing it?
dumb, just dumb
at Tom Riddle:
You just made a discovery that prices at walmart are cheaper!!
Congrats!!!
Apple knows what makes its store successful for consumers, and it will be careful to make in making any changes that move away from that.
Here are some nuggets to connect:
1. Outside of the TV set, people pick the playback device before they pick the store. (We don’t get all excited about buying iPods, iPhones and AppleTVs because we want to use the iTunes Store.)
2. Apple makes about 30% profit on each iPod/iPhone, and maybe 2% profit on each episode. Obviously Apple primarily sells content in order to drive sales of devices.
3. The iPhone can access the web. A rumored iPod wifi will be able to access the web. So iPhones and iPods will soon be used to watch content from any “network portal”. It doesn’t seem to me that Apple will block that. So obviously the value proposition of the iTunes Store is that it is easier to use than anything else.
So whatever NBC is asking for is beyond what Apple wants to do to its customers and its iTunes store. Since NBC is complaining about pricing and DRM, that means it could be higher prices, variable prices, more draconian DRM, etc. The leak about a bundling disagreement seems disingenous – iTunes already does bundling, where you buy one thing and you get a bonus thing; so it’s clearly the higher pricing aspect that’s the holdup.
Bye Bye NBC.
@Tom Riddle
wal-fart is horrible in their on right. they put the company my dad worked for (as well as many, many others) outta business due to their outragious price demands. the co. my dad worked for (much like many others) put way too much emphasis on their wal-fart client and neglected other clients—to meet wal-fart’s demands. too much was lying on wal-fart and once they were making nil on profit with them, they couldn’t drop ’em cus they were nearly the only client they still had. eventually wally world dropped them.
that’s just stoopid business practice imo. but wal-barf is partially to blame for it also.
but you’re right, you don’t companies sueing and complaining about them.
I watch almost no television because most of it is crap and I will not schedule my life around when a TV show is on. So, I get what I watch via iTunes or netflix. I bought a season pass to BSG last year and probably will again this year, if its offered. If not, then I won’t be watching. NBC will lose all revenue from me. Their loss.
Look at it this way. Imagine the deals Apple can get when NBC Universal comes crawling back on their hands and knees.
What is the particuliar diseas that afflicts these companies? No One, and I mean no one has had the mindshare or market sucess with digital media downloads that Apple has. No one. So where did Universal get the idea that they can match Apple’s success starting from scratch? And in light of that success, when Apple tells them that consumers will balk at variable pricing, shouldn’t the companies in question be listening?
Far, far too many of the people managing entertainment companies have inflated egos. Hopefully their incipient failure will will take the air out of some of these heads.
I have two choices, steal or buy from iTiunes.
NBC Universal, thanks for lowering the cost of acquiring your content.
It’s not like Universal has produced much lately that is worth acquiring anyway, it merely hurts Apples bragging rights.
Bye bye NBC Universal
Ahah! Perhaps all of you nay-sayers will soon be reconsidering my idea for the portable VCR and shortwave radio that connects to one’s iPod and alternately folds to the size of a common pack of gum when not in use!
I await your collective apologies.
Let’s see, NBC wants more control (ability to raise the price) and bundle content together (force you to buy other content you don’t want in order to get what you do want) and Apple is fighting against that.
Who do you want to support?
MSNBC is a joint venture between Redmond and GE. MSNBC and other NBC sites have long been Mac unfriendly. Just yesterday when browsing with the Safari Beta, I was prompted to open FireFox to see on the MSNBC site. Steve should call them out on his next CNBC visit on this nonsense.
@realnbk
I know, pointing out that Wal-mart is cheaper is not real deep. the point being that no media company is complaining about physical DVD prices at Wal-Mart, just digital downloads at itunes. So, NBC is going to remove one choice from the market and make us choose the product that yeilds them less profit. How are they winning?
The music labels are getting in bed with Walmart in order to weaken the itunes negotiating position, but they are doing so at 88 cents a track. Even if they do “win” the right to charge more for “hot” tracks, will customers buy them after being accustomed 99 cent and 88 cent tracks???
Based on historical data they’ll be giving up over $30 MM in sales with figures trending significantly upward. They won’t do it, especially not after the video capable Nano’s are released.
http://www.systemshootouts.org/itunes_sales.html
FFS!! They’re removing the shows before they even get to Denmark ?!!
THIS IS BULLS**T !!!!!
When Zucker was only responsible for the Entertainment division of NBC, he excelled, was recognized and promoted for his efforts.
When NBC and Universal merged guess who was appointed to CEO of the TV group? Zucker.
Ever since it’s been a struggle and now NBC is dead last among the networks. Peter Principle at play, eh Jeff?
Now you’re making an even graver mistake by cutting off one of NBC television’s revenue streams.
You zuck jeff…
okey dokey then, guess i’ll just go with xtorrent to get my nbc shows.
these guys really are clueless. give me a program for a reasonable price and i’ll buy it, ask for more than $2 and i’ll go back to piracy.
sheesh