NBC Joins Universal Leaving iTunes
August 31, 2007 by Douglas A. McIntyreNBC has told Apple (AAPL) that it will not renew its long-term deal with the iTunes store. The GE (GE) unit is "the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads," according to The New York Times. Univeral Music, the world’s largest music publisher also declined to sign another long term deal with Apple. Several other companies like CBS (CBS) will reach their end of their initial deals with Apple in the next few months.
The Zune could not hurt the iTune model. Neither, it appears, could cell handsets with music capability.
But, that leaves Apple as its own worst enemy. It has pushed so hard on the rates that it gets from content owners, they they are balking at staying on board.
It is easy to argue that the video and music content owners have no where else to go. They cannot do business without Apple. But, it is not entirely clear that this is true. Companies like Wal-Mart (WMT) and Amazon (AMZN) have large download businesses. Sony (SNE) is opening the Walkman plattform to MP3. And, the video content companies are opening their own websites. And, Nokia (NOK) has launched a big initiative to sell digital content thought its own online store
No one can predict who will blink first in the battle over who will set prices for iTunes content. But, for the first time in a couple of years, at least it is a horse race.
Douglas A. McIntyre
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