NBC did not renew its contract with Apple to sell and distribute its TV shows on the iTunes Store. The New York Times reports, that it is because of disagreements in pricing and piracy controls (which probably wanted a tighter DRM). Apple would have the right to sell the shows until the end of the year, but would then have to take them down from its store, mid season.
A spokesperson for NBC also stated “[The iTunes Store] is designed to drive sales of Apple devices at the expense of those who create the content that make these devices worth buying.” which basically means that they are not happy that Apple is making a lot of money with a good product. Of course it is true, that Apple mainly created the iTunes store for their iPods, but the reason was not, that their customers needed it. Most iPod users would be happy to continue filling their devices up with music from illegal sources or from their bought CDs. The iTunes store is more an excuse from Apple and an offering to the content companies, so that at least some content on the iPods is legally obtained.
As Techcrunch notes rightly, the content companies cut themselves with a strategy like this. Today everyone and their mom is able to download videos and music over BitTorrent. With sites like ThePirateBay, which adhere to Google’s no-frills strategy, offering a simple and easy to use way to get the newest content for free, why would anyone go through the hassle of fighting for their content? NBC does sell their content through Amazon now, but not giving the rights to Apple too was no smart move at all. iTunes simply is the one stop shop for digital media for most customers, especially because the main way to consume that media is Apple’s line of iPod (and now also iPhone) products. If people can’t get their content on their favorite device easy enough by paying, they will continue to get it illegally.
Although NBC’s content makes 40% of iTunes video sales, Apple made a bold “we don’t need you” move by not adding the new fall season of NBC’s show to their store. They said in a statement, that they don’t want their customers to be frustrated because of not being able to download any more episodes mid-season. Apple states that “ABC, CBS, Fox and the CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode,” so the video section of the iTunes store will go strong without NBC’s content. Maybe NBC just overreacted or someone ordered a wrong strategy because NBC’s own video startup Hulu is coming up, because the company is starting to think again. Cory Shields, exec VP-communications, NBC Universal said in a statement that NBC is “hopeful that we can reach a resolution” with Apple “before the existing contract expires,”.
I can only hope that the content companies will soon realize that to fight the extremely convenient way of illegally downloading their property, they will need to offer new and innovative ways that make the consumer want to buy it. The consumer does not want to pay more for online content, just because he does not have to leave his house. Apple is only trying to help these companies. While doing this, of course it has its own interest, but this makes sense because the iTunes store itself does not make a lot of profit.