NBC Universal, Apple battle over iTunes content

Saturday, September 1, 2007

NEW YORK -- Apple Inc. escalated a dispute with NBC Universal over the pricing of television shows by announcing Friday it would not sell any NBC programs for this fall season on iTunes.

Earlier, NBC had told Apple it would no longer allow its programs to be sold via iTunes at the end of the year. NBC Universal-controlled television programming accounts for an estimated 40 percent of the video downloads on iTunes.

"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

Rather than cut off NBC programs in the middle of the season, Apple decided to stop before the new fall episodes premiere next month, he said.

That would be a blow to fourth-place NBC, which could use the buzz provided by Internet sales for its programming -- not to mention the money.

ABC, CBS, Fox, the CW and 50 other cable networks have deals in place to sell fall shows at iTunes' current price of $1.99 per episode, Apple said. NBC wanted Apple to pay more than double its wholesale price for the material, which would have resulted in the retail price increasing to $4.99, Apple said.

NBC had no immediate comment on Apple's move.

The company's contract to sell more than 1,500 hours of news, sports and entertainment programming on iTunes expires at the end of December. NBC fulfilled its requirement to inform Apple by Friday if the contract would not be renewed, said Amy Zelvin, spokeswoman for NBC Universal Digital.

The dispute illustrates unrest among content providers over Apple's pricing. Media companies want more say in pricing and, in NBC Universal's case, are eager to offer different packages by bundling programs at different prices. Similarly, record companies would like to see an increase in iTunes' price of 99 cents per song.

Availability of Web-popular programs like USA's "Psych," NBC's "30 Rock" and Sci Fi's "Battlestar Gallactica" would be affected by the nonrenewal. It's not immediately clear when Apple intends to cut off sales of programs from NBC Universal's cable properties.

NBC Universal also wants iTunes to stiffen anti-piracy provisions so computer users would not have easy access to illegal downloads.

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