NBC pulls content from iTunes

NBC Universal and iTunes have been engaged in a war of words since the TV company withdrew from its contract with the Apple TV download service.

But analysts are saying the demands NBC is said to have to made to increase the wholesale price it sells content to Apple for could have wider implications for what is a small, but growing market.

Apple sparked the public row, issuing a press release that claimed the NBC demands would have forced it to increase the price it charges iTunes customers from $1.99 to $4.99 per TV show.

But NBC hit back, saying it took the decision not to renew its contract with iTunes, ending this December, after disagreements over digital rights management (DRM) issues and flexible pricing.

Cory Shields, NBC Universal executive vice president of Communications said in a statement: "We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centred on our 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," he said.

Adrian Drozd, Canalys Digital Entertainment Analysis Service leader said it was in both parties' interests to resolve the dispute, but said losing NBC's business, which accounts for a third of iTunes' TV revenue, might hurt Apple more.

"It's in Apple's interests to keep pricing at a flat rate, because if they give in to NBC the other content providers may want the same," he said. TV shows from ABC, CBS and News Corporation's FOX, plus 50 cable networks, are also available on iTunes for the flat rate.

"But then I can see NBC's point of view too," said Drozd. "It is their content after all. And it might be different length TV shows, as well as different types of shows, so they may just want flexibility in DRM and the pricing of content accordingly."

NBC raised issue with Apple's close alignment of the iTunes platform with its iPod player, "designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying," said NBC's Shields. And the company in March, announced plans to this year launch a video distribution network of its own, in collaboration with News Corporation and initial distribution partners AOL, MSN, MySpace and Yahoo!

But Apple contends its flat-rate fee is designed to encourage more users to become familiar with video downloads in general.

"iTunes may be the market leader but, in what is an underdeveloped market," said Canalys' Drozd.

Email to a friend

Print this page

Social Bookmark this article: What is this?

Digg

Delicious

Reddit

StumbleUpon

Slashdot

Google

Facebook