By David Bauder
Saturday, September 1, 2007
Apple escalated a dispute with NBC Universal over the pricing of television shows by announcing yesterday that it would not sell any of NBC's programs for the fall season on the iTunes online media store.
NBC had told Apple that it would stop allowing its programs to be sold through iTunes at the end of the year. NBC-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 fall episodes premiere starting this month, he said.
ABC, CBS, Fox, the CW and 50 other cable networks have deals in place to sell fall shows at iTunes' 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 yesterday 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 policies. 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' sales price of 99 cents per song.
Availability of Web-popular programs like USA's "Psych," NBC's "30 Rock" and Sci Fi's "Battlestar Galactica" are all affected. Programming from NBC and cable properties like USA, CNN, Bravo and CNBC will be cut off from iTunes at the start of the season on Sept. 24, Apple said.
NBC also wants iTunes to stiffen anti-piracy provisions so computer users would not have easy access to illegal downloads.