NBC, Apple in dispute over the price of iTunes download

Apple Inc.’s relationship with Hollywood doesn't seem to revive anywhere. It is getting worse day by day. NBC Universal, a media and entertainment company, has reportedly declined to renew its contract to sell its TV shows on iTunes because of a dispute with Apple over pricing.

NBC has notified Apple about its intension to pull downloads of its video content from iTunes after it failed to reach a new price agreement for the digital download service.

NBC’s refusal to renew its agreement with iTunes to make its catalogue available over the store, comes nearly two moths after the Universal Music Group declined to renew its annual contract with the computer maker turned Internet jukebox powerhouse to sell music through its online iTunes Music Store.

In December, 2005, Apple Inc. and NBC Universal announced a tie up to present iTunes users with NBC shows on demand for a price of $ 1.99 per episode. Now, the media conglomerate is reportedly demanding additional money from Apple, forcing the iPod/Mac maker to charge more for downloads of its TV shows.

Meanwhile, in a separate statement, Apple expressed their unwillingness to increase the price of NBC downloads. "We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes, in a statement. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

Apple accused NBC of demanding "more than double the wholesale price" for each of its TV episodes, which according to the computer maker would have increased the retail price of each download to $4.99, from the current $1.99 price.

However, NBC Universal, whose programming currently accounts for about 40% of all iTunes video downloads, argued over the way Apple characterized the situation.

"We never asked to double the wholesale price for our TV shows. In fact, our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers," contended Cory Shields, executive vice president of communications for NBC Universal, in a statement.

But, the Cupertino, California- based Apple said it has decided not to offer the network's new shows in September, three months ahead of the current contract that is due to expire in December.

Apple's iTunes store was introduced in 2003 for commercial music downloads and it became instantly popular with online customers. Apple had started with a library of only 200,000 songs and today it has 3.5 million songs in his pocket.

The world's most popular online movie store carries over 400 movies, more than 4 million songs and 350 TV shows that can be downloaded and played on Apple's revolutionary iPod digital media players.

Movies purchased and downloaded from the iTunes Store can be viewed on a computer, fifth generation iPod and, soon on Apple TV. Most of them are priced at US$9.99 each. Movies downloaded from the iTunes Store are downloaded in near-DVD quality at a resolution of 640x480.