NBCU's Response: Never Asked To Double Price; Shows Will Be On iTunes Through Early December
This is beginning to sound like a Jane Curtain-Dan Akroyd skit ... NBC Universal (NYSE: GE) never asked to double the wholesale price and insists NBC shows will be sold by the iTunes Store through early December.
Context & Ripple Effects
This is NBC Universal firing back within hours of Apple's announcement that the iTunes Store will stop carrying NBC television shows. The two accounts diverge on the key fact: Apple framed it around pricing demands, while NBCU says it never asked to double the wholesale price and that its episodes will keep selling into early December. What is not in dispute is the contract itself — NBC has confirmed it declined to renew its iTunes distribution agreement.
The dispute lands with leverage shifting toward NBCU's own distribution bets. The company has spent this summer building alternatives: the still-unnamed online video co-venture with News Corp announced in July 2007, the ad-supported viral video site Didja.com launched earlier in August, and an aggressive legal posture alongside Viacom against YouTube over copyright. Jeff Zuckerberg-era digital ambitions go back further — Zucker was talking up iPod distribution back in late 2005, making this rupture with Apple a reversal of one of NBCU's earliest digital partnerships.
First-order effects
- Apple heads into the fall TV season without new episodes from one of its flagship suppliers, weakening iTunes' claim to be the default place to buy primetime television.
- NBCU buys itself a runway — shows remain on sale through early December by its own account — during which it can steer viewers toward the News Corp joint venture and Didja.com.
Second-order effects
- Other networks now hold a public data point on what happens when a major supplier declines to renew with Apple, strengthening their hand in their own wholesale-pricing negotiations.
- NBCU's summer buildout — the News Corp co-venture and Didja.com — shifts from experiment to necessity, since the company must replace iTunes-driven downloads with owned channels before its stated December deadline.
Third-order effects
- If suppliers can walk away from the dominant download store and survive on their own platforms, the long-term structure of TV distribution tilts from single gatekeeper toward network-owned storefronts and ad-supported free sites.
- Public disputes over who sets wholesale prices point toward recurring content-versus-platform standoffs, the kind of friction that historically draws regulatory attention once consumer access visibly narrows.
The trend: Television suppliers are testing whether they can bypass Apple's platform economics with their own distribution ventures, turning wholesale-pricing fights into battles over who owns the customer relationship.