Tuesday, September 9, 2008

NBCU Back On iTunes; Apple Agrees to Variable Pricing

NBCU gets its variable pricing with rates ranging from $0.99 for deep library to $1.99 for new shows and $2.99 for HD shows. NBCU plans to provide 25 series in HD to start and will also sell compilations that can be variably priced. Sales start this afternoon. This deal falls in to the classic win-win column: Apple gets a source of popular content for iTunes and NBCU stands a chance of increasing its take, especially with HD shows at a wholesale price around $2. A year ago, NBCU served Apple with notice that it was exercising the opt-out in its contract after the two disagreed on pricing—NBCU wanted variable pricing, Apple claims NBCU wanted a major wholesale price hike. NBCU kept delivering shows from that contract until early December. At the time, NBCU accused Apple of pricing shows to sell its own devices “at the expense of those who create the content that make these devices worth buying.” NBCU CEO Jeff Zucker said the company made $15 million from iTunes, where it usually had shows in the top 10 and represented roughly 40 percent of iTunes sales.

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