Contract negotiations between Apple and NBC Universal regarding video content in iTunes are getting nastier and staying public.
In a statement, NBC disputes Apple's characterization of the companies' contract renegotiation and says that its TV programs will be available on iTunes through early December.
Late last week Apple said that NBC wanted to increase the price for its video content so much that iTunes would have to sell individual TV shows for US$4.99, instead of US$1.99, like the rest of the available programs. Since Apple wasn't willing to agree to that price hike, NBC declined to renew its contract, Apple said. So that it wouldn't have to stop selling programs in December -- the middle of the TV season -- when their contract ends, Apple said it wouldn't offer any NBC shows for the upcoming season.
But Apple may have a bigger battle on its hands if it does pull those shows from the iTunes video store. In its statement, NBC said that all returning series including new episodes would be available on iTunes through the end of the contract.
NBC also said that rather than asking to double the wholesale price of its programs as Apple contends, it wanted to offer end users more flexible pricing, including bundling packages of shows for a set price.
Apple has mostly stuck to a policy of flat pricing despite pressure from content owners to allow for variable pricing. The exception is in the music store where a selection of songs that come without copy protection cost more.
Both companies took jabs at each other in their statements. Apple called NBC's suggested pricing change a "dramatic price increase." NBC responded thus: "It is clear that Apple's retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying."
NBC also sells programs on Amazon.com and very soon plans to start offering its shows and others for free on Hulu.com, a joint venture company with News Corp.
So far, sales in the iTunes video store are relatively low. During 2007, the store should generate about US$300 million, according to estimates from Forrester Research.