Apple yields to NBC Universal on price, packaging

A year after NBC Universal pulled its shows from iTunes, the media conglomerate is back. To make that happen, Apple gave in on some pricing and packaging demands.

Steve Jobs announces that NBC Universal is returning to iTunes. Jared Kohler/CNET

To get TV shows from NBC Universal back on iTunes, Apple yielded to some demands on pricing and packaging made by the media conglomerate, NBC executives said Tuesday.

Apple CEO Steve Jobs announced at the company's "Let's Rock" press event on Tuesday that NBC shows such as 30 Rock and The Office would return to iTunes a year after the entertainment company pulled out of iTunes.

Examples of how NBC can set its own prices on some shows came after the event. NBC announced that it would offer some catalog titles for 99 cents rather than the traditional $1.99 that Apple charges for TV downloads.

JB Perrette, NBC's president of digital distribution, said in addition the company will be allowed to set its own prices on special packages. For example, NBC could elect to offer a best-of Heroes compilation at a price that might offer consumers a better value than buying individual shows for $1.99.

What this means for consumers, however, is that Apple is slowly losing control over pricing of video content at iTunes.

Earlier this year, Apple allowed the studios to set multiple prices for movie downloads. Having a greater say over what to charge for content on iTunes has been a thorny issue with content companies. The question raised by NBC Universal's apparent victory is how long before the music labels demand the same concessions?

Apple stuck to its guns for a long time, say sources close to the negotiations. NBC, which claimed to have once accounted for 35 percent of TV-show downloads on iTunes, announced in August 2007 that it was pulling out of iTunes. The company said then that it was unhappy Apple wouldn't allow it to charge what it wanted for TV shows. Since then, the companies have held talks, but it took a year to get a deal done.

"To their credit, what (Apple) has realized is that having the best content and the widest breadth of content is more important than being too rigid," Perrette said.

A source close to the negotiations said that under the old terms, Apple wouldn't allow NBC to charge less for shows. This meant that selling catalog titles for 99 cents couldn't have happened.

Apple representatives could not be reached for comment.

Click here for full coverage of Apple's "Let's Rock" event.

 

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