NBC pulls its TV shows from Apple iTunes
No more ad-free episodes of The Office, 30 Rock, Scrubs or Friday Night Lights for $1.99 each.
As promised, NBC (GE) removed all its content and that of its affiliates from the iTunes Store over the weekend after its contract with Apple (AAPL) expired.
That means no shows on iTunes from Bravo, mun2, NBC, NBC News, CNBC, NBC Sports, Sci Fi, Sleuth, Telemundo or USA Network. (Some shows aired on NBC but produced by other Hollywood studios such as Viacom, Disney or 20th Century Fox are still available.)
NBC has put some of that content on NBC Direct, an ad-supported download service that runs only on Windows machines; a Mac version is due next year. Its shows will also be available on hulu.com, a joint venture with News Corp. Both services are still in beta.
NBC had been Apple's single largest partner for digital video, with more than 1,500 hours of programming representing either 30% or 40% of iTunes video content, depending which side you believe. Talks to renew the contract reached an impasse last August. NBC wanted to be able to charge more than $1.99 for its most popular shows. Apple insisted on a flat per-show rate and claimed that the network wanted to raise prices to as much as $4.99 per episode. (See Apple to NBC: Drop Dead.)
In a recent interview, NBC Universal CEO Jeff Zucker insisted its demands were "modest" and complained that Steve Jobs was undervaluing video content in order to sell more iPods.
“We don’t want to replace the dollars we were making in the analog world with pennies on the digital side,” he said, according to Variety.
NBC's Zucker: Apple Turned Dollars into Pennies
It's been two months since Apple (AAPL) and NBC Universal (GE) broke up over video pricing on iTunes, but the wounds don't seem to have healed — at least for Jeff Zucker.
Variety reports today that NBC's CEO let loose on Apple in a breakfast interview with The New Yorker's Ken Auletta at Syracuse University. Zucker claims that NBC — Apple's single largest video partner — made only $15 million in iTunes sales in the past year. That's about 1/3 of what outsiders had estimated and far less than the entertainment giant is used to pulling in from hit properties like The Office and 30 Rock.
"We don’t want to replace the dollars we were making in the analog world with pennies on the digital side," he said, according to Variety.
But in describing the negotiations that led to an impasse in August, Zucker repeated claims that Apple has already contradicted, specifically:
- that NBC Universal represented 40% of Apple's iTunes video content (Apple claimed in a press release it was only 30%)
- that its demands were modest: to raise the price of one show — any show — from $1.99 per episode to $2.99 (Apple claimed NBC wanted to hike the per-episode cost to $4.99)
Zucker also suggested that NBC was asking for something Steve Jobs is unlikely to give any media partner: a cut of his iPod sales.
"Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money," Zucker said. "They did not want to share in what they were making off the hardware or allow us to adjust pricing." (link)
NBC's iTunes contract with Apple expires in December and from the tenor of Zucker's remarks, renewal doesn't seem likely. “We know that Apple has destroyed the music business – in terms of pricing – and if we don’t take control, they’ll do the same thing on the video side,” he told the breakfast audience, according to FT.com.
NBC and News Corp., meanwhile, are set to launch Hulu.com, their bid to offer studio-produced video on the Web that's supported, like broadcast TV, with advertising. Hulu is handing out beta subscriptions here, if you want to give it a try.
See What iTunes Looks Like Without NBC and Apple to NBC: Drop Dead


