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Internet NBC Universal to Sever iTunes Contract
Brandon Hill (Blog) - August 31, 2007 9:27 AM
Print 40 comment(s) - last by DJay48.. on Sep 3 at 9:30 AM

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: My final comment.
By alifbaa on 8/31/2007 6:02:59 PM , Rating: 1
It's not about piracy being OK. It's about being able to use the content in a way that I choose and that is easy and cheap. There is no reason for me to need to pay up to $15 for a CD that costs, at most, $2 to produce including the royalties to the artists. The production costs fall precipitously when you look at the DRM'd up music for sale over the internet, yet the cost to the consumer is the same or higher on a per song basis.

To make matters worse, the music being delivered to us has undergone absolutely no fundamental change in over 20 years! Our music is still in stereo using the same recording standards as when the CD was introduced. It's still largely sold on a disc that has to be stored somewhere and played on a player that is incapable of becoming truly portable. We aren't allowed to copy it to play it in different locations. In short, my toaster's new digital controls and LEDs have produced more fundamental change in the last 10 years than the entire music industry has in 20!

In business, peoples' tastes and preferences change. To survive, firms must anticipate and adapt to those changes. Customers are no longer willing to pay $15 for an album that they can't take with them and takes up space when there should be a far cheaper, far more portable solution. The industry failed to anticipate and adapt to this change, so its current problems were the inevitable result.

Don't be fooled. Your business' failure wasn't your customers' fault. It was the fault of the people who were supposed to market your work in the most effective ways possible. The new ways of marketing your work may well prove less profitable than they were previously, but that's another thing that happens in business sometimes.

My advice to you... quite whining to us about the risks you voluntarily took upon yourself and your family. Business fail all the time. In fact, they fail 5 times as often as they succeed. You knew that before you put everything you had into your business. You also knew that most successful business people have a long string of failures leading up to their success.

I understand your personal pain and the feelings associated with a failing business that you bet it all on and have a real passion for. Having said that, if you had made millions instead of losing it all, you surely wouldn't be giving it back to us because you had a good time doing it.

Instead of complaining to us about your misfortune, why not start working within the industry to create some change. Who knows, maybe this failure is what you needed to make your fortune. Best of luck to you, and I hope your tooth is taken care of!


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA











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