Apple pulls NBC shows from iTunes lineup

NbcOn their website today Apple announced that they will not carry the next season of NBC television shows on their iTunes store. NBC shows made up 30% of iTunes TV show sales. Although NBC’s contract with Apple officially ends in December, Apple decided to pull the shows now rather than take them out of the store mid-season.

The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99.

As noted by TechCrunch, the decision may have had something to do with NBC’s controlling stake in the newly-named Hulu, a YouTube-competitor offering professional video (examples found on the Hulu placeholder page include popular shows such as Bones and Family Guy). Hulu, slated to launch in October through portals such as MSN and Yahoo, is a joint-venture between NBC and News Corp that earlier this month received $100 million from Providence Equity Partners out of Rhode Island. In return, Hulu gave up 10% of the company, meaning it was valuated at a staggering $1 billion. As far as NBC being scared of Apple, Michael Arrington weighs in:

The last thing the TV networks want to see is Apple having the kind of control over TV content that they do with music - 76% of online music sales come from iTunes.

Is this a good decision by NBC? It remains to be seen whether the revenue from Hulu’s ad-based model will rival what the shows generated through iTunes. If NBC were to continue to distribute their television lineup through the iTunes store that would mean that at Hulu’s launch their shows would be available via three different delivery methods. Surely some cannibalization would occur here, but to what extent? If Apple were to release statistics on how many iTunes users sync television shows they purchase to iPods, it would be an indicator of how much they value the portability feature that only iTunes delivers. These customers would most likely continue to watch the show on television with friends and family, and would likely check it out on Hulu as well. In my opinion, NBC shouldn’t cut the iTunes contract until they roll out their own pay-to-download delivery system.

Hulu-1

Tags :


2 Responses to “Apple pulls NBC shows from iTunes lineup”

  1. By buddhistMonkey on Sep 2, 2021 | Reply

    “In my opinion, NBC shouldn’t cut the iTunes contract until they roll out their own pay-to-download delivery system.”

    I’ll bet that was NBC’s opinion, too. Unfortunately for NBC, Steve Jobs had a different opinion.

  2. By charlie reeb on Sep 3, 2021 | Reply

    John, wasn’t it NBC who overlooked the opportunity years ago to cover the Woodstock music festival — because a bunch of old execs hadn’t heard of the performers? Or was that CBS? Regardless, it’s evident they are premature to hike iTunes contract. But, well, so much for maturity.

Post a Comment

30 queries. 0.411 seconds.