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Apple reported that NBC was insisting it raise the price of some downloads on NBC shows to US$4.99 from the $1.99 iTunes charges for all programs. NBC denied this, saying that the disagreement was over the wholesale price that Apple was charging, not the retail price. NBC wanted a better wholesale price for its heavily downloaded shows, like The Office.
However, NBC had already inked a deal to sell its shows via Amazon's Unbox service at the same $1.99 price tag, reports [url=http://www.theregister.co.uk/2007/09/20/nbc_universal_unveils_nbc_direct_video_download_service_after_itunes_breakup/]The Register[/url]. And the company has launched its own video download service.
Yesterday Jeff Gaspin, the president of the NBC Universal Television Group, told the [url=http://www.nytimes.com/2007/09/20/business/media/20nbc.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1190327483-sJNN8vIO8fhCPybyZibTYw]New York Times[/url] that "piracy was and is our No. 1 priority" in regards to the Apple negotiations. He said that the music industry had been "devastated" by the free exchange of music, much of it facilitated by iTunes.
However, the general consensus seems to be that NBC is probably making a big mistake. Chris Crotty, an analyst for iSuppli, an independent firm that specializes in analysis of new electronic media, told the Times that the NBC move is "a stretch." He says consumers have shown they're happy with the iTunes service and that it would not be attractive to consumers to have to have to visit a number of services to find the programs they want to download.
"Itâ€™s not just a shift from a supermarket to a mom-and-pop story, itâ€™s a shift to one store that only sells bread, another store that only sells dairy products," Crotty says. "The consumers have decided they want to get their content from iTunes."
What's more, as The Register points out, NBC's video download service is nothing to get excited about. "You can't view these videos on more than one Windows PC [they're not Mac compatible, though that's supposedly in the works]," notes The Register. "They're riddled with commercials you can't skip. And they self-destruct after seven days."
[url=http://www.mediainfocenter.org/story.asp?story_id=109944331]CNET[/url] had this to say: "the risks involved with bucking Apple are great. Apple has sold more than 100 million iPods. The iPod makes up more than 70 percent of the overall mobile player market. How long can NBC Universal go without access to iPod owners? Even with the company's other distributors, such as AOL and its soon-to-launch Hulu site, which NBC Universal built in partnership with News Corp, Apple still represents one of Internet's largest video distributors."
A gedblog article has this to say: "Never mind the fact that the iTunes single-handedly prevented NBC from canceling The Office in the first place, or that you can TiVo these shows for free now, or even that higher-quality versions of all of these shows are available hours (not days) after they are aired via bit torrent."
In a PC World [url=http://blogs.pcworld.com/digitalworld/archives/2007/08/nbcapple_stando.html]blog[/url], Cathy Lu wrote: "If they [Apple] were to cave to NBC, then the floodgates would open, and every network would probably start drooling over the thought of upping their prices."