Apple bites back over NBCU’s iTunes pullout

Cory Bergman August 31st, 2007

Update: Last night, a NY Times story reported that NBC will not renew its agreement with iTunes, which would mean its shows would disappear off the store in December. But today Apple announced that it decided “to not offer NBC TV shows for the upcoming television season beginning in September.” Says Apple VP of iTunes Eddy Cue, “We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase. We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.” Apple says NBC wanted to raise prices from $1.99 a show to $4.99 (which NBC later disputes).

Apple knows that the value of having shows appear on iTunes is much greater than the direct financial benefit — but the promotional value, especially for new shows striving to get noticed in a new fall season. (NBC accounts for 30 percent of iTunes TV show sales.) NBC is in a rebuilding year on the programming front, and Apple knew this would be a great way to make a point.

As of last check, NBCU shows are still available on iTunes.

Update: See this new post which clarifies which material will stay up.

Apple’s press release below…

PRESS RELEASE — CUPERTINO, California—August 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.

“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.”

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 percent of iTunes TV show sales.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.