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Summary:

There is a game of corporate chicken going on. Hours after NBC decided that it was going to pull its shows from the iTunes store at the end of this year, Apple (AAPL) trumped them and will not sell shows from the upcoming TV season on […]

There is a game of corporate chicken going on. Hours after NBC decided that it was going to pull its shows from the iTunes store at the end of this year, Apple (AAPL) trumped them and will not sell shows from the upcoming TV season on iTunes, the largest online music and video store.

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. Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.

By Om Malik

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  1. Alaska Miller Friday, August 31, 2007

    Apple’s margins on iTunes Store is between 4-17%

    $1.99 * 85% = $1.69 wholesale price from NBC? * 2 = 3.38 so that extra 1.61 must be going somewhere right? Because that’s basically 32%

    Did I do my math right?

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  2. Just what NBC deserves for trying to raise prices from $1.99 episode to $3.99 an episode:

    OTHER CONTENT PROVIDERS BE WARNED:

    Apple will cut you off from the world’s pre-eminent digital media download service if you try to dictate terms for the platform Apple built from scratch and is continuing to grow internationally.

    This sea change is past the point of no return. Play by Apple’s terms or die a slow death without a viable online delivery model.

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  3. I am getting a little miffed at both these companies. if i am going to have Monk and Pysch cut off, then I am going to be looking at some other options. including re-signing with my cable operator. Bah!

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  4. surely they will just go to amazon etc and they will pay the price. People that want this stuff will soon find out where to go buy it.

    To be honest it just seems really childish of Apple. They are just cutting of their nose to spite their face. Ok so nbc does want to do a deal with them but to end an existing contract over it shows that the company has ego issues.

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  5. its about time somebody had the balls to tell a studio ‘no. being in the PPV satellite business and internet ‘rental’ biz, the studios have always believed that a venture can’t live w/o their shows. NOT TRUE! esp. now given the internet. BRAVO apple. It strikes me that the rating for these ‘shows’ on TV and any online ‘buys’ are all important. Way to go NBCU, pull the exposure for YOUR stuff right off the premier online venue of the moment. Now that’s SMART!

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  6. Are there that many people that still don’t have a DVR? I never have understood why I should pay $1.99 for a tv show when I can just record it and watch it whenever I want.

    Unless you only watch 1 or 2 shows, the cost of downloading individual episodes would be more than it would cost to just get cable/satellite service with a DVR.

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  7. nbc really wants more people to start using bittorrent. i’m fine with that.

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  8. I love it – Steve Jobs doesn’t go “wobbly!”

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  9. This seems like another interesting battle b/w a distributor and a content producer.

    Working in the cable biz, knowing what we pay for programming rights, I have to admit that I enjoy seeing apple ‘just say no’ to programming rate hikes.

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