No. 1 Supplier of Digital Video to iTunes Soon to Be No. 1 Supplier of Digital Video to Torrent Networks
NBC Universal apparently has high expectations for Hulu, its forthcoming joint online video venture with News Corp. So high, in fact, that the company feels comfortable pulling its TV shows off iTunes. According to a report in today’s New York Times, NBC Universal has decided not to renew its contract to sell digital versions of its television shows on Apple’s digital media store. Seems the company–which is the No. 1 supplier of digital video to iTunes–would like more control over the pricing and packaging of its content.
But so would most other content vendors who’ve signed iTunes contracts. And though many have tried, none has been able to convince Apple CEO Steve Jobs to recalibrate the underlying business dynamics of the digital-media market he created. Still, as the New York Times notes, talks between the two companies continue, which may mean NBC is just playing hardball.
If that’s the case, it best be in top form. The mercurial Apple CEO has been notoriously intransigent in matters like these. As Gartner analyst Mike McGuire said of the content companies last year, “I think if they’re throwing down for a street fight, they may have picked somebody who’s as good or better at it than they are.”
I’ll say. This just in from Apple:
iTunes Store to Stop Selling NBC Television Shows
CUPERTINO, Calif.–Aug. 31, 2007–Apple® today announced that it will not be selling NBC television shows for the upcoming television season on its online iTunes® Store (www.itunes.com). 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. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
… 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% of iTunes TV show sales.”
Ouch. Silly media conglomerate, bringing a knife to a gunfight …