iTunes drops NBC's new fall shows

Network won't renew content deal with Apple

Apple announced on Friday that it will not sell any of NBC's new fall shows on iTunes after talks broke down over a distribution deal that ends in December, and both sides took the dispute public.

"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," Eddy Cue, Apple's VP of iTunes, said in a statement.

"It is clear that Apple's retail pricing strategy for its iTunes service is designed to drive sales of Apple devices at the expense of those who create the content that make these devices worth buying," NBC Universal exec VP of communications Cory Shields responded.

NBC U's involvement with iTunes, and the sales of shows like "The Office" and "My Name Is Earl" for the iPod, have been a major source of corporate pride for both companies; sources on both sides said talks unraveled over the price of shows, packaging and copyright protection.

Though many in Hollywood have complained about Apple's aggressive stance on pricing and other issues, this dispute between a media conglom and the iPod maker is the first to go so public. Apple's decision not to sell NBC's new fall programs is the first swipe the company has taken against a content provider when negotiations turned sour.

Apple topper Steve Jobs has thus far been a firm advocate of consistent pricing for content on iTunes. While some miniseries and telepics have been priced higher, all half-hour and hourlong TV shows have been made available for $1.99 on the service.

Sources at NBC Universal told Daily Variety they were pushing to be allowed to charge more for their most popular programs, such as "The Office."

Apple claimed the net wanted to go as high as $4.99, but NBC U disputed that notion.

"We never asked to double the wholesale price for our TV shows," Shields maintained. "In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that would make our content more attractive to consumers."

Apple said that rather than start airing some new programs and then take them off a few months later, it decided not to air any of the net's new programs.

NBC U shows already on the service, such as "Heroes" and "Battlestar Galactica," will remain on iTunes for the length of the deal.

The two parties also reached an impasse over copyright protection. NBC Universal had asked Apple to take additional "concrete steps" to prevent piracy, since, it said, "the typical iPod contains a significant amount of illegally downloaded material."

Apple sources, however, insisted the dispute was only about pricing and noted it would be extremely difficult to keep illegally downloaded music or video off of the iPod without keeping users from putting their personal media that they legally own onto the device.

NBC U still has 90 days left on its contract with iTunes, giving both sides plenty of time to simmer down and renegotiate before all of the Peacock's programs disappear.

Shields said NBC U content will be available this fall on NBC.com, Amazon.com and the soon-to-launch joint venture with News Corp., Hulu.com.