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published: 08-May-08
territories: UK
categories: Content deal

> NBCU back on iTunes with variable pricing


Apple has added TV shows from NBC Universal (NBCU) to the iTunes store (iTS) in the UK. At launch five series were available, including current shows Heroes and House and archive content such as The Incredible Hulk. Newer shows cost £1.89 (€2.40) per episode whilst older content is priced at £1.19 (€1.50).

The addition of shows from NBC Universal is a continuation of Apple's recent expansion of its TV library in the UK. In recent weeks content from both Channel 4 and ITV has been made available.

Our take...
Whilst the addition of TV shows from NBCU marks a further boost in content to the relatively sparse video offering from the UK iTS, the deal takes on additional significance when looked at in a wider context.

In August 2007 NBCU decided not to renew its contract with Apple to offer TV shows through the US iTS. The dispute between the two parties hinged on the issue of variable pricing – Apple's fixed pricing structure was at odds with NBCU's preference for charging more for current shows and less for archive content. Other issues raised by NBCU included Apple's objection to selling episodes in bundles and concerns from NBCU about Apple's lack of restrictions against piracy.

Since the dispute much has changed. NBCU has fully launched Hulu, its joint venture with News Corp. Indications from its beta phase suggest the ad-supported service will find a wide audience, particularly through syndication. In addition, NBCU has licensed its content to other hardware-centric services in the US, including SanDisk's TakeTV and, in the last week, Microsoft's Zune Marketplace. By backing other device-based services NBCU may hope to reduce Apple's dominance in the online TV market, weakening Apple's bargaining power in future content negotiations.

Apple has also trialled new strategies, experimenting with variable pricing in Europe, although this has not yet been extended to the US store. In Germany the company is charging more for US shows than for local content, whilst in the UK a limited selection of shows from one content owner are priced at a premium. With Apple conceding to variable pricing in its European stores one of the points of contention blocking a deal with NBCU has been removed. The move to offer a small number of NBCU shows in the UK is likely to be a trial, possibly paving the way for a re-introduction of NBCU content in the US. This would prove a welcome addition to Apple's US TV library – before the dispute last year NBCU accounted for 30 per cent of TV show sales from the iTS.


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