I had barely pushed “publish” on my last entry when Apple decided it wouldn’t wait until the NBCU contract expired in December and announced that NBC’s fall line-up wouldn’t be available via iTunes. According to Marketwatch, Apple will also drop other NBCU programming.
According to a statement from the company, NBC refused to renew its agreement with iTunes after Apple balked at paying fees that it said would more than double the wholesale price for each NBC TV episode.
Apple said NBC’s demands would have raised the price of NBC shows to $4.99 an episode from the current $1.99 price tag.
“We would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes, in a statement. “We hope they will change their minds.”
A spokesman for NBCU denied that they had asked for double the wholesale price, adding, “Our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.”
Sorry, I don’t buy that. Nobody from Hollywood does ANYTHING that makes things “more attractive for consumers.” It’s all about money, and Apple — the folks who invented this source of revenue for everybody in the first place — is trying to help you and I by keeping prices low.
I find most interesting in this article from Marketwatch the comments of James McQuivey, an analyst at Forrester Research.
“What they’re going to have to realize,” McQuivey said, “is that out of all the dozens of shows available out there, most people only want the four or five most popular shows. And if those aren’t there, those consumers are just going to walk away.”
This is conventional thinking, but it’s also the kind of stuff that got traditional media in trouble in the first place. Let me repeat what I said in my previous entry. Losing this content hurts NBCU much more than it will hurt Apple. Let’s watch and see what happens.