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A number of media outlets, lead by the New York Times, reported that the NBC unit of General Electric Co. (NYSE: GE) would not renew its video content deal with Apple iTunes. NBC wanted Apple (NASDAQ: AAPL) to charge more for its content.
But, the news reports were not enough for Apple. It decided to make the parting unpleasant and announced that the TV network was being greedy. Charging more for programming downloads just wasn't acceptable. NBC's programming is about 30% of the video inventory at iTunes.
The question is whether this is a real blow to Apple. For the time being, the answer is no. Video sales for the iPod are modest. But, Apple is likely to launch new versions of the iPod that have better video capacity and upgraded screens.
Will video become an important part of multimedia player downloads? Content companies can try to take their business elsewhere. Nokia Corp. (NYSE: NOK) is opening a multimedia store for cell phones. It sells almost 400 million handsets a year. Amazon.com (NASDAQ: AMZN) will have one.
Apple believes that content owners cannot bypass iTunes because it has too large a share of the market for digital content.
They are probably right and NBC will probably be back.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-01-2007 @ 12:37PM
phucpholuc said...
If people are not going to be using iTunes to obtain tv programming for their ipods, they are not going to do so somewhere else less conveniently for more money. Of course, we know that those all the ones who can't live without watching their tv programming on their mobilie devices will just throw their ipods/iphones in the trash can and walk (no, run) to get a brand new Nokia or S-company ( fill in your favorite) device and download gazillions worth of content. If history serves as a reminder...
NBC will renegotiate and everyone will pretend like nothing was ever wrong in the first place
9-01-2007 @ 8:25PM
jbelkin said...
The problem is NBC thinks they can win a PR fight with Apple/Steve Jobs - hahaha.
Jeff Zucker is often ridiculed as none too bright and this doesn't help his reputation. You would think that after the debacle of ivilliage that NBC cannot just randomly build up a website - no matter how many hundreds of millions of ads you pour into it.