Yesterday, the Apple event took place, and a part of it included the announcement that NBC Universal would be coming back to iTunes. But it comes at a price, and one that has finally been decided on after a year of negotiations.
It was in August 2007, that NBC pulled its shows from iTunes. They had some conflicts with Apple concerning the product pricing. NBC wanted more freedom with their prices, while Apple accused NBC of wanting to raise the price of their shows to $4.99 each from $1.00. To many Apple lovers, Steve Jobs was protecting them from high prices.
Apple, however, has given in to NBC's terms. Now NBC will be charging $0.99 for older titles, $1.99 for regulars, and $2.99 for HD shows. They can also offer special packaging prices. Ever since the separation a year ago, Apple has been slowly losing their grip on the pricing of video content on iTunes. Earlier this year, they had allowed more freedom for other companies' pricing of their shows.
It's probably better for Apple to at least have the shows on iTunes, even if they aren't very happy about the pricing. Unless iTunes becomes a huge retailer of video content, it's unlikely that Apple can convince companies like NBC Universal to agree to their own terms. For now, the re-addition of NBC's shows will be happy news for many iTunes users.
Apple had also not much selection for movies and films because they had always asked companies to accept a price lower than the DVD price. Apple simply refused to price anything over $14, but has now settled for just having the content on iTunes at all.
"Frankly, ever since we dropped our relationship with Apple last fall, they have made a gradual progression culminating in (Tuesday's announcement that NBC was returning to iTunes)," Perrette told CNET News. "Originally, Apple had no film content (from the major motion picture studios) on the service because they were asking the film studios for years to accept a price that was below their DVD price. Apple realized it wasn't worth the fight anymore and they were better off to just have the content. So they agreed to the pricing that was at least equal to the DVD pricing."As for the new HD options, the higher prices will be mostly better for the companies providing the shows. That's "because the delivery costs are Apple's issues. We get the benefit of most of the price increase between $1.99 and $2.99," as stated by Perrette.
As aforementioned, iTunes will not be able to hold an iron grip on the prices of video content because they don't have enough of an influence on the market as of yet. That's why iTunes, being the biggest retailer of music with nearly 20% of all music sales in the U.S., can easily control the prices of the music it sells.
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