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Claire Bennet and the rest of the Heroes gang may be leaving iTunes
NBC Universal says "good-bye" to iTunes

Apple is very protective of its iTunes store and the pricing model used to distribute music and video. That tight grip over pricing has caused NBC Universal to break ties with Apple.

NBC Universal will not renew its contract with Apple to sell TV shows on iTunes. Popular NBC Universal shows made available on iTunes include "Heroes," “30 Rock” and "The Office." In fact, NBC Universal is currently the number one provider of video downloads on iTunes and accounts for 40 percent of video downloads (roughly 1,500 hours or programming).

NBC Universal's two-year contract ends in December, so content will still be available on iTunes until that time. Apple and NBC Universal could still come to an agreement before the end of the contract, but it appears -- for the moment at least -- that neither side is willing to budge on the matter.

NBC Universal feels that it should receive a larger cut of iTunes downloads and have the ability to package content together. Apple on the other hand has stood its ground with regards to pricing and contends that packaging video content would lead to confusion for buyers and decrease demand.

This isn't the first time that Apple has run into pricing issues with one of its content providers. In July, Universal Media Group decided not to renew its iTunes contract over similar pricing concerns.

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RE: About time!!
By MaulBall789 on 8/31/2007 2:29:03 PM , Rating: 2
And I think you just made my point better than I did. I've been through all of this before and you are absolutely right, it takes a lot of dough to front a new act especially on an indie label. But you have to remember that your first priority is to get the artist as much exposure as humanly possible, not to make a profit. If they are talented enough when they perform live and get their name/brand out to the public you give away free cds, t-shirts, etc. to get those initial 14k-20k fans and hopefully their word of mouth creates some real interest. But in the beginning you have to be able to give it away for nothing. Is it worth it? Most of the time, no. But if they hit, then heck yeah.

As for those old 45s (yes I'm old enough to remember them), there was a B side with a potentially hidden gem, so a little more content for your money. Not to mention that the poor performers were not kept on shelves for very long, and as there was no other outlet, that single was essentially dead. So if you were to actually charge $5 per digital single dl, like a 45 adjusted for inflation, there would certainly be a few die hards who would pay anything for their favorite band, but a grand majority would be a lot less thrilled. $50 for an album of 10 songs wouldn't fly now or then, adjusted back. (I seem to remember the majority of entire albums back in the 60s being $2.99 to $3.99) Give it away for free and just about anyone who stumbles across them will at least give it a listen, and generally create some buzz, good or bad.

I don't know this for sure, but I pretty sure that iTunes is charging you a premium on your digital catalog because you are more of an unknown quantity. I would be very surprised if a Universal doesn't get a much better rate of return on their catalog as they have far more leverage to get a bigger slice of the $0.99. Maybe a big label insider can fill us in.

In conclusion, running a small label is tough. I admire you for doing it. There isn't an antacid strong enough keep me in that job. But you take that risk knowing that one big hit can make it all worthwhile. THEN negotiate your own bigger slice of the pie! Or get bought out by a major.

"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton

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