NBC Universal Pulls Out of iTunes
UPDATE - 3:00pm ET, August 31, 2007: After staying silent most of the day, Apple fired back against NBC Universal by deciding to pull the company's content at the beginning of the new television season. Additionally, it disclosed that Universal was attempting to get Apple to pay more than double the wholesale price for content. If Apple would have agreed, pricing of videos would have jumped to $4.99.
The Cupertino company also said that more than 50 networks had already agreed to sell their programs at $1.99 for the upcoming season, meaning NBC was essentially the lone holdout.
"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."
NBC Universal will pull its television programming from iTunes in December after the two sides failed to reach an agreement regarding the pricing of its video downloads.
The timing is somewhat interesting: In October, NBC will launch a private beta of its own video service called Hulu. With the option of controlling the terms itself, the network may have decided that getting out was best for its own plans.
Losing NBC could significantly harm Apple's overall standing in the video download market. Altogether, NBC makes up about 40 percent of the video sales of the service. The move follows Universal Music Group's cancellation of its contract and going month-to-month.
NBC only confirms that the two sides had indeed gone their separate ways, and would not comment further. Apple had no comment.
According to The New York Times, NBC is unhappy with the current measures to curb piracy, and also wanted to bundle videos together. Apparently, Apple disagreed with those terms.
There is hope, though. While the sides have their disagreements, the talks have been described as cordial and will continue. However, neither side has so far conceded to anything, which could be an issue.
If a deal is not reached, some of the most popular programs on iTunes such as Battlestar Galactica and Heroes will vanish. NBC could also be hurt as well -- the perception that it is blocking out the most popular way of purchasing videos for its own interest could rub consumers the wrong way.