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Apple slaps back at NBC in iTunes spat

A day after reports said NBC would not renew its iTunes contract, Apple counters by announcing it will not offer NBC's new TV shows.

A disagreement between Apple and NBC Universal escalated Friday as Apple announced that it won't sell NBC's shows for the upcoming television season.

The move comes a day after The New York Times reported that NBC Universal would not renew its agreement to make its TV shows available for download on iTunes.

Apple said in a press release that the dispute over price came after the iPod maker "declined to pay more than double the wholesale price for each NBC TV episode."

This, according to Apple, would have boosted the per-episode price of NBC shows on iTunes from $1.99 to $4.99. The move by Apple is an attempt to preempt a possible NBC pullout when their contract ends in December.

"Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September," Apple said in its statement.

This is the second content supplier to reject long-term deals with iTunes over the issue of price. Universal Music told Apple earlier this year that it had chose not to renew it's long-term contract and would instead opt for a short-term agreement.

The fight appeared to be a minor dustup to James McQuivey, an analyst with Forrester Research, who said he began the day thinking the NBC pullout was going to blow over soon. He said Apple's response has changed everything.

"I thought that it would all be ironed out and wasn't that major of a deal," McQuivey said. "But Apple is sure directing a lot of blame in the direction of NBC. It makes everything seem much more final, which is odd given that Apple is totally dependent on NBC and the rest of the content creators to make their video playback devices, such as the Apple TV and iPod, valuable.

"If you don't have access to the top rated content, what's the point?"

Editorial note: I added more analysis to a new story that you can find here.