Apple in a Fight for Rights to TV Shows

By Frank Ahrens
Washington Post Staff Writer
Thursday, October 25, 2007

Apple's Steve Jobs helped save a sinking music industry, with his iPod and iTunes digital music store. Struggling record labels swallowed hard and accepted his 99-cents-per-song pricing because they had little choice.

When it comes to video content, however -- hit television shows such as "Heroes" and "The Office," and movies -- Jobs's bargaining position isn't as strong. For the second time in a year, he is getting significant resistance from a content creator that would rather turn its back on the mighty iPod than capitulate to Jobs's pricing demands.

And now, some music companies are starting to reexamine their relationships with Apple.

The turbulence on the content side comes as Apple is enjoying smooth sailing on its hardware side. On Monday, the company reported strong fourth-quarter earnings, with computer sales up 34 percent and iPod sales up 17 percent over the comparable quarter last year.

But fans of such hit shows as "The Office" are angry because Apple, feuding with NBC Universal over pricing, pulled all current NBC shows from the popular iTunes music store.

And after Dec. 1, when Apple's contract with NBC expires, all shows that NBC Universal owns, past and present, will disappear from the site. That includes shows from Sci Fi, USA and Bravo cable channels.

NBC Universal confirmed that it sent a letter on Oct. 9 asserting that Apple is in breach of contract, though it is unlikely to pursue legal action. The two sides have stopped negotiating and there appears to be no resolution in sight.

On the iTunes comment board for "The Office," there is plenty of fan enmity to go around.

"Apple wake up and work it out with NBC," wrote one poster.

Another simply wrote: "I hate NBC."

NBC said that before the breakup, its shows accounted for 40 percent of all the television programs purchased on iTunes; Apple said the number was closer to 30 percent.

For Apple, the feud with NBC is the most recent ding in the company's sleek, it-just-works image. A year ago, Apple added feature-length movies to its iTunes online music store, most for $9.99 each. But the only major studio that let its movies be sold on iTunes was the Walt Disney Co. -- and Jobs sits on Disney's board. Since then, only two of the six other major studios -- Paramount and Sony -- have made some of their movies available for sale on iTunes. Movie studios fear damaging sales of their movies on DVD by undercutting their price on the online music store.

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