Dispute with network over lack of pricing control, piracy protection, and inability to bundle videos to increase revenue takes a sudden turn.
Apple announced today that iTunes will no longer be selling NBC TV shows for the upcoming Fall TV season. The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99.
Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.
In the meantime, ABC, CBS, FOX and The CW, along with more than 50 cable networks, are still signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
“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.”
It may difficult for iTunes to weather the losses due to NBC’s decision since NBC is the top supplier of digital video to Apple’s online store and accounts for some 40% of downloads. But, knowing Steve Jobs iTunes probably won’t skip a beat in coming up with an alternative.
In addition to concerns over Apple’s refusal to increase pricing for its video content, NBC Universal is reported to also be seeking better piracy controls and wants Apple to allow it to bundle videos to increase revenue.
The move mirrors Universal’s recent decision to not renew its deal with iTunes and to take its music catalog to Apples competitor Rhapsody.
With more and more media companies growing angry over Apple’s firm stance against raising prices it may soon find itself with a lack of suitable partners with which to make its content offerings viable. One things for sure, piracy is the real competitor here, and each time these media companies try to raise prices and make it more difficult for customers to find legal offerings at a reasonable price only hurts them in the long run.
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$4.99 an episoode is flat stupid!
No one would buy it and applle knows it.
$1.99 is highway robbery in my book.
So even if apple agreed to these prices they would not see much intrest.