Report: Apple and NBC Universal break off negotiations over iTunes Store TV shows

“Fans of such hit shows as ‘The Office’ are angry because Apple, feuding with NBC Universal over pricing, pulled all current NBC shows from the popular iTunes music store,” Frank Ahrens reports for The Washington Post.

“And after Dec. 1, when Apple’s contract with NBC expires, all shows that NBC Universal owns, past and present, will disappear from the site. That includes shows from Sci Fi, USA and Bravo cable channels,” Ahrens reports. “NBC Universal confirmed that it sent a letter on Oct. 9 asserting that Apple is in breach of contract, though it is unlikely to pursue legal action. The two sides have stopped negotiating and there appears to be no resolution in sight.”

“NBC said that before the breakup, its shows accounted for 40 percent of all the television programs purchased on iTunes; Apple said the number was closer to 30 percent,” Ahrens reports. “NBC proposed a range of prices and packaging of shows on iTunes from 99 cents to $2.99, said a source close to the talks who spoke on the condition of anonymity because the proposal was confidential. Apple refused. In a press release, Apple said NBC proposed selling some shows for as high as $4.99, which NBC denies.

“NBC Universal’s take from selling its shows on iTunes last year was far less than 1 percent of the company’s total revenue — only about $15 million, according to a source close to the situation who spoke on the condition of anonymity because the number has not been made public,” Ahrens reports.

Ahrens reports, “NBC Universal spokesman Cory Shields said his company’s programs help drive the sales of iPods. ‘The iPod is only as good as the content on it,’ he said.”

More in the full article here.

[Thanks to MacDailyNews Reader “PK” for the heads up.]

How quickly they forget: “NBC is confident that the iPod exposure contributed to the rise [in ratings for ‘The Office’},” Daisy Whitney reported for TV Week on January 17, 2006. Full article: NBC: Apple’s iTunes, iPod powering broadcast ratings for ‘The Office’.

70 Comments

  1. I was about to purchase Heroes, Season 1 from iTunes when all this came up. Some friends had recommended it to me. (They also said iTunes is the best way to watch TV . . . no commercials, watch when/where you want. To think you can buy back 8-16 minutes of your life from the networks for $1.99 ($0.12-$0.25/minute) AND be entertained at your convenience.)

    I didn’t go out and buy the show on DVD and Tivo Season 2. I decided to boycott NBC Universal for their stupidity. No Heroes. No The Office. No SNL. No House (produced by NBC Universal, shown on Fox and no longer on iTunes). No NBC Universal TV shows period–on TV, on DVD, or on the Web.

    Apple has presented a fair and equitable pricing/availability structure, and the studios are getting greedy. There are plenty of other entertainment options available and consumers do not need to line the pockets of the media-fascists any longer. Boycott NBC Universal!

  2. I agree with Wingsy. If the studios play hardball with iTunes content, all Apple has to do is add DVR function to TV. To rub some salt into the wounds, add the ability to automagically remove ads. To avoid copyright hassles, make the recordings only viewable under iTunes/TV/iPods (Fairplay DRM). If Apple buys Elgato and Tivo, all this work is already done. The studios (at least NBC) don’t know this could be the end of them if they don’t play “nice”.

  3. No amount of spin can accurately say this is a good thing for Apple. Apple lost revenue, visitors (who might buy other itunes products incedently), prestige, bargaining power, and NBC is getting revenue from advertisers by showing The Office, Heroes, etc… on it’s website.

  4. I am back to BitTorrent for The Office and I guess I will do the same for Battlestar Galactica. I have purchased all previous episodes from iTunes.

    I like the MEDIUM, not the price.

    Pitty NBC will be driving me back to piracy because of their short sightedness. I will NOT be purchasing DVDs.

  5. NBC is forgetting that Season 4 of The Office has overall sucked pretty bad, so far. And what else does NBC have that’s worth watching? Heroes — No. NBC thinks it’s hot but everyone I know is giving up on watching it, because it’s not very good.

    NBC = Nothing But Cancellations.

    Fsck NBC.

  6. I could care less. NBC shows suck. All of them.

    And the shows are just icing on the cake. The iPod knows its priorities which is why it sells – music. Not some stupid show about some woman with super hearing and legs she can’t control or some show about a bunch of office misfits (which, thanks to the iPod was able to stay on the air).

    NBC is definitely shooting itself in the foot.

    Others agree.

  7. The loser is NBC, because as soon as you encode everything with Microsoft’s DRM you loose 80% to 90% of the portable market and something like 25% or more of the home viewer market of Digital Media Market. The only way around this is to release the content DRM free which NBC will never do.
    I’ve been using Elgato Eye TV and the H264 Turbo for about 6 months to record TV and encode it for my Apple TVs. I’ve simplified my home entertainment systems a lot as the Apple TV’s contain all my Movies, Recorded TV, Video and Audio Pod Casts and all of my music too. No need to have more then one cable for the satellite and a receiver/decoder, 4 Mac Mini (1.83GHz Core 2 Duo, with 2GB RAM and 160GB Hard drives) each with a full copy of Eye TV, an Elgato HD TV USB receiver, an Elgato .H264 Turbo USB co-processor and an Apple Script I created to copy the H264 Apple TV Optimized files output by EyeTV to a centralized ITunes that runs on a New 24″ iMac (with a 1TB Hard drive, a 2.8GHz Core 2 Extreme processor and 4GB of RAM). We can record any show and can program EyeTV to record anything up to 45 days in advance or as soon as the program listing is made available to the service and record up to 4 programs at the same time.
    So, NBC is the looser….

  8. This is good. If NBC ends up with a better way to sell their content it will create competition and everyone wins. (except the anti-trust lawyers)

    If NBC falls flat it will show that the iTunes store is the only way to fly.

    Why does everyone get so pissed off? It’s NBC’s right and responsibility to find the best business model.

    And would everyone please stop using BitTorrent – if the networks lose eyeballs they will be forced to add more ad minutes to 60 minute blocks, decrease show budgets, go grazy working on DRM strategies, take fewer risks w/new shows because it will be ever harder to make a profit. They deserve to make a buck.

  9. NBC- People actually watch NBC?
    CNBC- NeoCon flag-waving corporatist cheerleading- not to be confused with journalism.
    MSNBC- The cable news without an audience. Remember that the MS in MSNBC stands for Microsoft.
    SciFi-Geeks Gone Wild
    USA- Reruns Gone Wild
    Bravo- really. What’s so bravo about Bravo?

  10. This is fucking stupid. I would buy episodes of The Office and 30 Rock to watch on my iPhone at the gym, but apparently NBC doesn’t want my money. Keep living in the 20th century NBC, when people rushed home to watch a show “when it’s on”. The rest of us have moved beyond that.

    And I think iPod sales will do just fine without your content, NBC.

  11. down with BitTorrent. It’s piracy. If you’re too cheap to pay for a show then don’t watch. Go shoplift a book and un-shoplift it a few days later when you’re done, telling yourself it isn’t stealing.

  12. d claims “down with BitTorrent. It’s piracy.”

    NBC is the criminal here. Unfair-abuse of consumers describes their idea of a good commercial transaction.

    If a supplier boycotts the distribution channels or tries to overcharge then it is not theft but “fair-use”

    BTW, seen the new MSNBC advertising… it prominently features a Zune. How freakin’ zuneless are they?

  13. A library card is better still except it doesn’t help me make my point 😎

    BTW – Our local library draws from a huge multi-county system and lets me reserve on line and pick up here in a few days. A great way for me to get TV series and audio books. My taxes pay for it anyway,

  14. I’ve been watching NBC the old fashioned way; time taping shows on the old VCR. I know; it’s so 20th century! ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> Ironically, I’ve only taped one show on NBC this whole season, one show on USA, and I haven’t watched anything on the Sci Fi Channel in ages. The idea of spending any money to view this dreck is completely beyond me.

    Because NBC-Universal shoots itself in the foot over extra money, they deserve what they get out of this; absolutely nothing. In the meantime, computer people are going to be using their work-around methods to get their shows onto their iPods. Only now NBC-Universal won’t be receiving a check for it.

    Apple tried to keep everything above board and everybody got their piece of the action. Now it merely greed that made this happen. Too bad.

  15. Wow.
    Some really strong sentiment here. I was a little pissed at NBC Universal too. But I figure if that Hubu or Youbo, or what ever takes off, great. I can watch it there for free. If they think I am going to pay them for some weird MS DRM version, they are crazy. Maybe they can sell it for the Zune 2 market. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    If they sink, and history says that they will, it will really show the other networks that if it don’t fly on Apple iTunes, it aint going to fly.

    Sounds good to me. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    en
    MDN = wrote. As in Thats all she wrote!

  16. I think this situation IS an example of a free market at work. Just because NBC wants to charge $2.99 per episode for Heros, doesn’t mean that Steve has to sell it.

    ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

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