Jeff Zucker, NBC Universal's chief executive, has warned that Apple's iTunes digital media store was undermining the ability of traditional media companies to sell their content online at profitable rates, and he urged them to take a stand. “We know that Apple has destroyed the music business â€“ in terms of pricing â€“ and if we don't take control, they'll do the same thing on the video side,” said Zucker.
Zucker said that it was “a relatively easy decision” for NBC to walk away from iTunes because it had only earned about $15 million (E10.3m) from the service last year in spite of accounting for about 40 per cent of the video sold on the site. As part of NBC's push for more flexible online pricing, Zucker said he urged Apple for months to price one programme at $2.99 per download â€“ as opposed to the current $1.99 â€“ as an “experiment” but was rebuffed. Zucker also suggested Apple had rejected requests to share revenue from its sales of iPod devices, which are far more profitable than the digital media store.
Zucker emphasised that conventional media companies were struggling to develop economic models for new forms of digital distribution, and trying to ensure that a dollar of traditional revenue was not reduced to mere pennies in an online world.