Here’s bad news for some: Apple has decided to drop NBC from the iTunes music store, due to NBC wanting to double their asking price to carry episodes and wanting more restrictive DRM.
The price hike NBC asked for would have driven the iTunes price from $1.99 per episode to $4.99 per episode. Apple has politely said “Bite me.” This comes on the heels of two things: the start-up of NBC’s online media service (and joint venture with News Corp, owners of everything FOX) hulu.com, and the potential loss of Universal Music’s offerings for the iTunes Music Store. Universal also has ties to NBC — Universal is owned by Vivendi SA, which owns 20% of NBC. So they’re not unrelated, though the Ars articles linked don’t seem to make the connection.
Universal’s break has to do with, again, DRM. While most of the offerings from iTunes has DRM in the music, limiting how and where the music can be played, Steve Jobs has been pressuring the “Big Four” of the music industry to offer music free of such restrictions. EMI has already done so. Universal Music, not so much. They are, according to Arstechnica.com, looking for higher per-track prices, and more control over the music. (Sound familiar?)
My take on all this? Apple’s holding the number three spot for all music sales, behind Wal-Mart and Best Buy. Read that again. More people are buying their music on iTunes than they are at Sam Goody, FYE, and Amazon. Universal Music is the biggest of the Big Four in the music industry. Dissing one of your top 3 sources of revenue because they’re not making you enough money is kinda like cutting your own nose off. In the end all you have is a big gaping hole.
Would the loss of UMG hurt Apple? Yeah, probably. However, they would still have the rest of the Big Four. It is indeed a sizable loss of over 25% of their inventory. They might do well to be a bit flexible. On the other hand? NBC’s TV shows? Yeah, OK. Apple still has ABC, CBS, Fox, the CW, and 50 cable networks offering programming. Sorry for those fans of The Office and Heroes. In fact (cynical old man talking here) I wouldn’t be surprised if Apple was using the NBC deal as a message to Universal.
