NBC Universal is not renewing its contract with iTunes. According to Reuters, the studio is iTunes' number-one supplier of digital videos, including popular TV shows like Heroes, 30 Rock, and The Office.
NBC reportedly wants Apple to pay an inflated fee for the content, which would result in an increase in the price customers pay for downloads (supposedly US$4.99 per episode instead of US$1.99). Apple says sorry, that won't fly.
Of course none of this matters to us Canucks north of the border who can’t even get downloadable TV content through the Canadian iTunes service. Not that I'm bitter, but I'll digress, since this is a whole other topic unto itself!
Nevertheless, this decision could lead to some very interesting possible outcomes. The first, I propose, is that downloadable online video continues to appeal only to techno-geek, early adopters, and eventually dwindles away. Downloadable video is still in a growth phase. Correct me if I'm wrong, but if the most popular media download site (i.e. iTunes) starts offering fewer quality videos instead of more, aren’t we moving in the wrong direction of where we want to be?
The second possible outcome is this: imagine NBC decides to launch its own site to rival iTunes (but just offers its own content); or partners with a competing online store that accomodates the price NBC wants. Would you pay $1.99 for stuff you don't want; or $4.99 for stuff you do? NBC announced in March that it would launch an ad-supported online video distribution site in partnership with Fox that would be available through partners like AOL and MySpace. You never know: I could be way off base, but an online video download store may not be too far off the horizon!
Sure, Apple’s domination in the portable player and online download arena is really being put to the test as of late, but we can't forget the third possible scenario: NBC feels the pain of missing the exposure of its 2007-08 season through iTunes (Apple reportedly said it would pull the plug before the new season rather than wait until the end of the year); and Apple laughs all the way to the bank.
Which way will things go? We'll just have to wait and see.