Tuesday, September 4, 2007

NBC Will Not Renew ITunes Contract; Apple Bites Back

NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes. The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision. The decision by NBC Universal highlights the escalating tension between Apple and media companies, which are unhappy that Apple will not give them more control over the pricing of songs and videos that are sold on iTunes. NBC Universal is also seeking better piracy controls and wants Apple to allow it to bundle videos to increase revenue. Apple announced that it decided “to not offer NBC TV shows for the upcoming television season beginning in September. 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.



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