Apple Rubs Sand in NBC Universal's Eyes Over iTunes Contract

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In response to NBC Universal’s decision not to renew its iTunes contract due to Apple's inability to negotiate on higher prices, Apple has decided to cancel their current iTunes contract which was to end in December. Since the end of the contract would happen half way through the television season, Apple has decided to boot NBC Universal from iTunes before the new TV season begins in September. Apple also noted that NBC Universal wanted to sell its episodes for $4.99 each. Seeing as the current price is $1.99 per episode, iTunes VP Eddy Cue noted: "We are disappointed to see NBC Universal leave iTunes because we would not agree to their dramatic price increase. We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

According to Apple's own numbers, NBC Universal TV shows took three of the top ten slots for best selling TV shows on iTunes last season and accounted for 30% of all TV show sales.

News source: DailyTech

(1 reply) #1 Citrusleak on 01 Sep 2007 - 19:25

Well, if NBC's shows account for 30% of the TV show sales, then I would say Apple is just screwing themselves over even worse by ending the current contract sooner.

#1.1 gigapixels on 01 Sep 2007 - 19:36

Most people would probably be purchasing the shows during the actual season, rather than in between, so chances are even though NBC's shows do so well, TV shows altogether aren't selling very much right now.

(1 reply) #2 bangbang023 on 01 Sep 2007 - 19:27

$5 for one show? Get the hell out of here.

#2.1 markjensen on 01 Sep 2007 - 19:34

Amen, brudda!

#3 +SOOPRcow on 01 Sep 2007 - 19:48

I actually think this is a smart move by Apple. Imagine purchasing various episodes throughout a season then all the sudden you have to not only switch to a different company to buy them, but you'll pay more and it'll probably be in a different format.

#4 betasp on 01 Sep 2007 - 19:52

Often, I/we throw Apple under the bus by calling their stuff overpriced but here Apple is trying to protect consumers. Apple makes money from iTunes, just like Apple computers, but there does seem to be logic built into their margins.

#5 Xenon on 01 Sep 2007 - 19:56

Well I guess its back to "other means" to get their shows. Its a pity.

#6 azcodemonkey on 01 Sep 2007 - 20:11

What the hell is up with NBC? This is a brand new revenue stream and they're trying to gouge the consumer. Way to go, asshats.

#7 black_death on 01 Sep 2007 - 20:36

Pretty stupid of NBC to not renew their contract because they wanted to sell their shows for 2.5X as much as the rest of the shows. Paying for TV shows probably isnt going to be too big so right now they're just losing some extra income but if it starts becoming more and more popular then NBC just totally screwed themselves over.

#8 Julius Caro on 01 Sep 2007 - 20:39

I already find it utterly incredible that people actually want to pay 2 bucks per episode. NBC should be thankfull people even pay, lol

(2 replies) #9 SIE on 01 Sep 2007 - 20:45

Does anybody know if anybody from NBC has commented on this yet?

#9.1 DomG on 01 Sep 2007 - 21:10

Quote -

NBC, not content to let Apple have the last word, issued a counter-statement late yesterday clarifying that its departure from iTunes wasn't so much pricing related as, apparently, focused on an unwavering "request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers." That and tighter anti-piracy measures on Apple's part, "since it is estimated that the typical iPod contains a significant amount of illegally downloaded material." Right. This has exactly WHAT to do with legitimately selling shows to paying customers, NBC? We think this is the telling quote: "It is clear that Apple's retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying." Yeah, pretty clear it's still about the money for those guys.

If there's any good news, it's that NBC insists that its content, despite Apple's claims to the contrary, will still be available on iTunes through the end of its contract, which is up in December. In the mean time, you can rest assured that if NBC didn't actually want you to pay more for their shows, at very least they think you're a dirty crook who shouldn't have the privilege anyway.

So yeah, they claim that basically they want "pricing flexibility", aka, higher prices.

#9.2 SIE on 01 Sep 2007 - 21:55

So no official quote from NBC then, just what Apple has said?

#10 bbfc_uk on 01 Sep 2007 - 21:10

Smart move Apple!

(1 reply) #11 Croquant on 01 Sep 2007 - 22:06

removed

Last edited by shockz on 01 Sep 2007 - 22:35

#11.1 Julius Caro on 01 Sep 2007 - 22:14

And not even that. DVRs exist too!!

(1 reply) #12 NateB1 on 02 Sep 2007 - 04:52

I am definitely not an Apple fan, but for once I applaud their stand against NBC. $5 per show is outrageous.

This move will only encourage pirating.

#12.1 Tikitiki on 02 Sep 2007 - 05:58

Quote - (NateB1 said @ #12)

This move will only encourage pirating.

I was just gonna say that. Lots of things people are doing these days are counter-intuitive. If the CEO's of our big companies would sit down a take a moment to think....

#13 HawkMan on 02 Sep 2007 - 06:42

To me this makes Apple sound like the whiny little kid who lost a multiplayer game on his console and then refuses to let his friend play it because he beat him.

#14 Joshie on 03 Sep 2007 - 03:40

This basically puts the cost of watching the episodes online significantly higher than the cost of owning the DVD later. I question whether or not this move was Apple looking out for its consumers, but no matter the reasoning, that price is just plain obscene.

What else is there to say?

#15 REM2000 on 03 Sep 2007 - 10:15

I also pleased apple stood up and didn't get pushed into raising prices. Im sure this will put a bigger dent in NBC than apple, as apple tend to use itunes more of a way to promote iPod sales.

#16 Davo on 04 Sep 2007 - 03:34

Jobs is quite the spin doctor and always has been. NBC more than likely just wanted more money in the renegotiations and wanted control of pricing since it's their shows. Apple wants to be in control of everything when they're in a joint venture (iPhone anyone?).

Notice how NBC never said that they wanted the episodes to be $5 each, it was just Apple? Apple created inflated numbers to take away attention from the fact that they want to control the situation completely.

#17 C_Guy on 04 Sep 2007 - 17:26

"We are disappointed to see NBC Universal leave iTunes"

Wait... In reality Apple is canceling their existing contract with NBC early. NBC decided they would not renew their contract after the current one expires.

Typical grown-up response from Apple. Say good-bye to 30-40% of your video offering.

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