When it comes to public relations battles, Apple is a devastating counter-puncher.
NBC just learned the hard way. Late last night, NBC leaked that it would not renew its TV show contract with iTunes. Supposedly, NBC was not satisfied by the financial terms Apple was offering. Nevermind the fact that it was iTunes single-handedly rescued the TV series The Office from being canceled, turning the show into one of the few hits NBC has had recently.
Apple recently has championed consumer rights when it comes to digital media and decided dust off the boxing gloves once more by removing the upcoming fall season of NBC TV Shows from the iTunes Store.
The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.
In one paragraph, Apple laid perhaps the best argument it has ever had for its iTunes pricing structure. After all, if 50 cable networks think $1.99 per episode is acceptable, then why does NBC need to double the price? With rumors that NBC wanted even more DRM on its TV Shows, this price increase clearly would not help consumers in any way. Apple seized on the moment and with one press release, practically knocked NBC out.
So now, NBC has lost its iTunes marketshare (30%), the vast majority of its digital sales, no access to the iPod/iPhone, and has pissed off consumers royally.
Brilliant move NBC. Can’t wait to see what you come up with next. I am sure this will make the stockholders really happy.