NBC Universal decides not to renew TV show deal with Apple’s iTunes Store

Apple iTunes“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.

51 Comments

  1. TV Shows and films are cheaper on DVD and if you wait until after their initial release DVD’s are dirt cheap. These companies want to charge more for lower quality and with less costs to them – how does that work?

  2. The new iPods (coming real soon now, honest) with their larger screens better suited to watching video content will convince them to come to an agreement. They are going to get money, one way or another, and iTunes Store sales are an exact count while broadcast “sales” are not.

    Dave

  3. @M.X.N.T.4.1

    You are exactly right. Just last week, I wanted to buy both available seasons of The Office. The first season was $20, the second was $34. I was able to get both for $52 at BestBuy on DVD. Better quality + cheaper pricing + bonus features – no AppleTV = pretty simple choice.

  4. Universal is just all over the wrong sides of the digital media spectrum. The exclusively support the losing HD DVD format instead of Blu-ray, and now they have some sort of vendetta against Apple as well in the downloads market.

    Universal obviously loves leaving a LOT of money on the table it seems, no wonder their TV network sucks….

  5. Beleaguered Apple finally gets nailed for screwing everyone in the music and movie business. This is the beginning of the end for iTunes as everyone moves to the Microsoft store. People want choice in formats and in devices – Apple gives you neither.

    We’ll see who is laughing 6 months from now as all the music and movie companies run from Apple and there is nothing left but Macworld videos to download. Good to see bloated, overpriced Apple stock getting ready for the inevitable crash into oblivion.

    Don’t worry about operating systems after Apple dies, your overpriced mac books, imacs and mac pros will run the fast, secure and business capable Microsoft Windows.

  6. Let NBC lose more online sales to bit-torrent and other illegal downloads. They are screwing themselves and their shareholders much like their management brethren in the music industry.

    Pigs get slaughtered in the free market, and NBC Universal is acting like one.

  7. Ah, NBC. Maybe they should have some of the major music labels dust off their digitial download services from the late 1990s. You know, the ones that had draconian DRM, were overpriced, and essentially completely ignored by consumers? Yeah, those. That was in the days before the iTunes store revealed the completely unexpected: consumers will buy digital media if priced fairly and available a la carte. I know, it was totally shocking. Before that, I thought consumers preferred getting boned by the content providers. Now, along comes NBC to champion higher prices and more DRM!!

    WOO-HOO!!!!!! Go NBC!!!

    What’s that you say? They are going to offer low-res, commercial-ladden flash versions of the shows on their website?!?! That would change everything.

    If they had any shows worth watching, I would just record them to my hard drive.

  8. @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.

  9. 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.

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