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Unable to Agree, NBC and iTunes Part Ways

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Unable to Agree, NBC and iTunes Part Ways

Technology

Unable to Agree, NBC and iTunes Part Ways

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MELISSA BLOCK, host:

Fans of TV shows produced by NBC, shows such as "Heroes," "Battlestar Galactica," and "The Office," won't be able to download them from the iTunes Store for much longer.

As NPR's Laura Sydell reports, negotiations between Apple and NBC Universal broke down after the companies could not agree on how much to charge.

LAURA SYDELL: The new media catch phrase is that consumers will be able to get what they want, when and where they want it.

(Soundbite of TV show, "Heroes")

Mr. SENDHIL RAMAMURTHY (Actor): (As Mohinder Suresh) Teleportation. Levitation. Tissue regeneration. Is this outside the realm of possibility, or is man entering a new gateway to evolution?

SYDELL: Sorry fans of "Heroes" and other NBC shows, we haven't reached the Promised Land just yet. In a press release, Apple said it won't agree to the dramatic price increase NBC wants. And it won't allow NBC to add any new shows to what is already available on iTunes. NBC insists, Apple is contractually obligated to put up new shows through the end of December.

Mr. JAMES McQUIVEY (Analyst, Forrester Research): I personally believe that this will hurt Apple not to have three of the top ten selling shows in the last season were NBC shows, and those are now going to be gone.

SYDELL: James McQuivey is an analyst Forrester Research. He says NBC would like to hurt Apple because they don't want the company to hold power over television and film the way they have over the music industry.

Mr. McQUIVEY: NBC Universal has a sister company in Universal Music, which has learned the hard way that Apple can very quickly ascend to a position of dominance and then use it against the industry.

SYDELL: Universal Music and other recording industry giants want Apple to raise the price of individual songs on iTunes, but Apple won't do it. The major recording companies don't want to pull out of iTunes because, currently, it is the third largest music retailer in the U.S. behind Wal-Mart and Best Buy. NBC is developing other online outlets for fans of its programming. They can go to its Web site and watch many shows with streaming video, and NBC has teamed up with News Corp, the owner of Fox to create Hulu, a video site scheduled to launch in October.

But tech analyst Joe Laszlo at Jupiter Research thinks NBC better make sure that these new sites are as convenient as iTunes.

Mr. JOE LASZLO (Tech Analyst, Jupiter Research): People who are buying their shows legally now may think that the next easiest way to get them is to get them illegally.

SYDELL: However, several analysts believe that NBC will return to talks with Apple, and that the end result will include downloads of free programs from iTunes that will be more like the television of the past. The programs will include commercials.

Laura Sydell, NPR News, San Francisco.

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