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. @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???

  2. 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…

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