Apple Declined NBC $2.99 Per Show Test

Zucker Gave ITunes The Option, But Jobs Refused

By Tom Steinert-Threlkeld -- Multichannel News, 10/29/2007 7:52:00 AM

Jeff Zucker decided to pull NBC content off iTunes when Apple chief executive Steve Jobs refused to test a single show at the rate of $2.99 an episode.

 “Apple has destroyed the music world,” by setting not just wholesale rates but retail rates in the sales of songs, the president and CEO of NBC Universal said Monday morning in a conversation in midtown Manhattan with New Yorker journalist Ken Auletta. The conversation was sponsored by the S.I. Newhouse School of Public Communications at Syracuse University. Zucker said he didn’t want the same thing to happen in video.

 NBC wanted to test the sale of episodes for just one show at $2.99 an episode, instead of the $1.99 rate established by Apple. Zucker said he was willing to let Jobs pick whatever show would be tested at $2.99, whether Heroes, The Office or another title.

But Jobs, he said, refused. NBC now is set to pull its shows off iTunes at the end of December.

NBC Universal shows, he said, accounted for 40% of all sales in iTunes’ video store in 2006; and that NBC only pulled in $15 million in revenue.

By contrast, Apple sold “tens of millions of iPods off the backs of our content and made a tremendous amount of money.’’ He did not define the amount.

According to one slicing of sales data, Apple sold 88 iPods per minute last year.