Aside from the iPhone price drop and the release of the new iPod Touch, the next biggest news coming out of Apple this week was the announcement that NBC doesn’t intend to renew their contract with iTunes once their current contract runs-out in December. The reason is because neither party can agree upon a price to sell NBC’s TV shows at. Apple reported that NBC wanted some of their shows to be priced at more than double what they currently are ($1.99) and Apple just wouldn’t have that. While it may seem as though this is all NBC’s fault, it appears as though there’s more to it than what we originally thought.
According to Variety, NBC and Apple couldn’t agree to a price because while NBC envisions their prices going up, Apple envisions the price of TV shows going down to 99 cents. Apple’s retort was that NBC would end up making more money anyway because more people would take advantage of the downloads at the cheaper price. Clearly both parties are headed in a different direction with this situation.
Now of course we know that Apple’s motives aren’t just to give the consumer a better price. They’re in business and they have to look-out for themselves. So what’s really their motive behind wanting to slash the prices of TV show downloads? Well, if you think about it, the new iPod Touch is a perfect place to watch TV shows, isn’t it? The change in price that Apple is requesting would place TV shows at the same price as what iTunes sells DRM-infested music for, which could ultimately help them sell more iPods.More sales make Apple and their investors happy.
While some people have given up hope that Apple and NBC will be able to work something out, Wired reports the deal isn’t dead yet. A comment from NBC Universals’ Executive VP of Communications provided this insight : "NBC is hopeful that we can reach a resolution with Apple before the existing contract expires." It sounds to me like both parties are going to have to compromise here, otherwise it’s a lose-lose situation for them and all their users.