Not being able to reach an agreement with iTunes, NBC (GE) has decided to pull its TV shows from the iTunes store.
With the current agreement due to expire in at the end of December 2007, if no progress is made, it will be the end of the partnership. NBC TV downloads account for 40 percent of iTunes TV show downloads.
The battle is over NBC wanting more control over its pricing while iTunes says it would make the process too complicated for users.
NBC wants to bundle some of its TV offerings so they can charge a higher price to increase revenue. Universal Music, a division of Vivendi, also wants the ability to charge higher prices for its more popular music.
This actually makes sense as pricing everything the same makes the music artists a commodity, even if they could command higher prices. Since iTunes won't agree to this at this time, Universal won't renew their agreement, rather they'll sell music at-will, which means they can drop out of selling music any time they want on iTunes.
Apple believes the various price points would cut back on the demand for the overall products offered because it would make it too complicated.
I'm not so sure about that though. Look at the many retail Web sites that sell numerous goods at all different price points. People continue to buy in spite of it.
With the current contract in force until the end of the year, there is still a chance that a new agreement could be put in place, although it is confirmed at this time the decision to not renew by NBC has been made.
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