Apple strikes back in dispute with NBC

September 01, 2007|Associated Press

NEW YORK - Apple Inc. escalated a dispute with NBC Universal over the pricing of TV shows by saying yesterday it would not sell any of NBC's programs for this fall season on iTunes.

Earlier, NBC had told Apple it would no longer allow its programs to be sold via iTunes at year-end. NBC Universal-controlled TV 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, vice president of iTunes.

Rather than cut off NBC programs in midseason, Apple decided to stop before the new fall episodes start this month, he said.

That would be a blow to fourth-place NBC, which could use the buzz provided by Internet sales, not to mention the money.

But NBC insisted Apple is contractually obligated to offer new episodes of returning shows through the end of December. Apple could only refuse to sell new series.

ABC, CBS, Fox, the CW, and 50 cable networks have deals in place to sell fall shows at iTunes's current price of $1.99 per episode, Apple said. NBC wanted Apple to pay more than double its wholesale price, which would have resulted in retail prices increasing to $4.99, Apple said.

NBC said it never asked to double the price, but was most interested in the flexibility to package its programming in different ways.

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