Los Angeles — NBC Universal has reached a deal for online retailer Amazon.com Inc. to sell television show downloads, it said on Tuesday, just days after the media company pulled the plug on a contract with Apple Inc’s. iTunes.
“Days after its dispute with Apple over the price of its TV shows’ on iTunes, NBC has left the iTunes store for good and announced a new partnership with Amazon Unbox, none other than iTunes’ biggest rival.”
The media conglomerate, part of General Electric, said that Amazon had agreed to give it something that Apple would not: greater flexibility in the pricing and packaging of video downloads.
The network said last week it would stop selling “Law & Order” and other shows on Cupertino, California-based Apple’s iTunes after the companies failed to agree on prices. Apple claimed NBC wanted to double its wholesale prices. The network said it sought pricing flexibility and packaging options.
“Amazon is a company that understands the value we provide as content owners to its business,” said NBC Digital Distribution chief Jean-Briac Perrette.
As a result, NBC Universal said it had agreed to sell all its popular, wide variety of television programming on Amazon’s fledgling Unbox download service, including the Emmy Award-winning series “The Office,” the critically acclaimed drama “Heroes,” and Emmy-nominated comedy “30 Rock.” Episodes will be available on Unbox the day after they are shown.
Also, starting September 10, Amazon Unbox customers can download for free the pilot episodes of new NBC’s new shows Bionic Woman, Chuck, Journeyman and Life — before they are aired on television, NBC and Amazon, the world’s largest online retailer, said today in a statement.
“With the addition of NBC Universal TV content to Amazon Unbox, fans now have the ultimate convenience for enjoying their favorite shows whenever or wherever they want,” said Perrette.
“This further expands our longstanding relationship to bring a robust content offering to the marketplace in a variety of ways that will benefit the consumer and, at the same time, protects our content,” he said.
NBC Universal has long offered library movies like “Psycho” and “Animal House” on Unbox and later this year will begin offering newer releases like the comedies “Knocked Up” and “Evan Almighty.”
Apple has long held the policy that it will not change prices for content. It has a single pricing policy and payment distribution for every content partner. NBC Universal said it did not want to continue with the agreement and effectively pulled all of its content away from iTunes. The media conglomerate accounted for nearly half of all iTunes video downloads.
NBC Universal, a unit of General Electric Co., announced on Friday that it would not renew its contract with iTunes, becoming the second major media company, along with Vivendi’s Universal Music Group, to challenge Apple’s dominance in digital entertainment.
While Amazon is still working to determine pricing, Unbox typically charges more for newer releases than for older ones. Unbox also gives consumers more options, including whether to rent a movie for $3.99 or buy a download for $14.99. Amazon agreed to offer promotions, including a 30 percent discount when buying full seasons of television shows.
Apple sells episodes of television shows for a flat $1.99, with movies priced at $9.99. “Individual episodes will cost $1.99 on Amazon, the same as they had on iTunes.”
Though Amazon does not have a direct-to-portable-device distribution service like iTunes does with the iPod, it does offer video downloads directly from and to TiVo. TiVo owners can purchase Amazon Unbox content through a broadband Internet connection and watch them on their TV immediately.
NBC Universal’s decision to be a partner with an Apple rival could embolden other media companies to do the same. The News Corporation in particular has been grumbling about Apple’s prices. And Amazon has now shown that it is waiting with open arms.
Earlier this summer, Vivendi’s Universal Music Group declined to sign a long-term deal with Apple’s iTunes, leaving open the possibility for exclusive deals with other services, a source told Reuters in July.
“Vivendi also owns a minority stake in NBC Universal.”
Apple last week said NBC Universal had sought to more than double the wholesale rate for each show, which Apple said would have forced its iTunes online store to raise its price to $4.99 per TV show episode from $1.99.
NBC Universal, which had been the No. 1 supplier of digital video to iTunes, disputed Apple’s claim and said its focus was on more flexibility and the ability to package shows together.
The network is seeking multiple online outlets for its shows and movies. Last week NBC unveiled a Web-based network for films and TV shows called “Hulu” that it plans to start in October with Rupert Murdoch’s News Corp.
“The project, made public in March, aims to compete with online video sites such as Google Inc.’s YouTube.”
Regardless of the newly formed partnership, Amazon hopes NBC Universal’s inventory will give Unbox a much-needed boost. Unveiled in September 2006, the service is a distant competitor to iTunes and has suffered from scattered service problems, including lengthy waits for downloads.
While Amazon has solved many of the problems, Unbox is still limited in one important aspect: It is not compatible with Apple’s iPods, which are by far the most popular portable video players.
Apple spokeswoman Natalie Kerris did not immediately return a call seeking comment. A call to Amazon’s media hotline was not immediately returned.