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NBC to Apple: Build antipiracy into iTunes

NBC Universal, which pulled its TV content from iTunes last year, implies it wants Apple to add antipiracy measures to iTunes.

SAN FRANCISCO--NBC Universal would like to have its TV shows distributed once again through Apple's iTunes service, a top executive said Wednesday, but he called for antipiracy measures to help protect his business' revenue.

George Kliavkoff, chief digital officer at NBC Universal, didn't specifically mention Apple by name in his request, but it was clear he had the iPod maker in mind when it came to combating people's consumption of pirated content.

George Kliavkoff, chief digital officer at NBC Universal
George Kliavkoff, chief digital officer at NBC Universal Stephen Shankland/CNET Networks

"If you look at studies about MP3 players, especially leading MP3 players and what portion of that content is pirated, and think about how that content gets onto that device, it has to go through a gatekeeping piece of software, which would be a convenient place to put some antipiracy measures," Kliavkoff said in an onstage interview at the Ad:Tech conference here. "One of the big issues for NBC is piracy. We are financially harmed every day by piracy. It results in us not being able to invest as much money in the next generation of film and TV products."

Apple's iTunes service has become the largest music retailer in the United States, but relations between Apple and NBC Universal are strained. In 2007, NBC Universal pulled its TV content from iTunes when the two companies disagreed about pricing. Kliavkoff made it clear that he'd like the conduit back, though.

"We'd love to be on iTunes. It has a great customer experience. We'd love to figure out a way to distribute our content on iTunes," he said, but wouldn't comment on any negotiations. "We have film distribution with iTunes so yes, we do talk to Apple," he said.

Price appears still to be a sticking point. NBC Universal sets a wholesale price for content it offers to distributors, and then distributors are free to set the retail price.

"They can mark up the price and make a profit or use it as a loss leader to get people in the door," Kliavkoff said. "It's really difficult for us to work with any distribution partner who says 'Here's the wholesale price and the retail price,' especially when the price doesn't reflect the full value of the product."

"The music industry guys would have something to say about how the pricing has affected their product over the last few years," he added.

The Apple-NBC Universal spat has been a game of brinksmanship over which company needs the other more. Analysts at Forrester Research think Apple needs the content more than NBC needs the distribution.

NBC Universal, through a 50-50 partnership with NBC and News Corp., has its own mechanism to view entertainment TV shows on the Web: Hulu. However, the site doesn't offer downloads and doesn't support mobile devices, at least today.

Hulu is in part an attempt to combat piracy on Google's YouTube, Kliavkoff said.

"It used to be that at the end of Saturday Night Live, YouTube would have clips up faster. You can fight that all you want, but until you provide a place to go at 1:05 a.m. Eastern time that has the digital short, you won't get anywhere." Now, with Hulu, viewers can get the same content through legitimate channels.

YouTube, he added, is a "fantastic promotional vehicle for some of our product," such as trailers. And it's the "market leader for amateur content." But sites like Hulu will change its position for professionally produced video, he predicted.

"I think that balance will shift a little bit. I think at the end of the day people, more often than now, will want to see professionally produced content," Kliavkoff said.