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Friday, August 31, 2007, 07:00 am PT (10:00 am ET)

NBC may not renew iTunes contract with Apple - report

NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes, according to the New York Times.

Citing "a person familiar with the matter," the paper said NBC — which is the No. 1 supplier of digital video to Apple’s digital download service, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday.

A spokesman for NBC Universal subsequently confirmed the conglomerate's decision but would not elaborate further. Since the NBC's existing two-year contract with Apple runs through December, its latest decision will not have an immediate impact on the iTunes service. It also leaves the door open for the two forms to reach a new agreement before the current contract expires.

For its part, NBC is seeking more control over the pricing of songs and videos that are sold on iTunes. It also wants better piracy controls and for Apple to allow it to bundle videos to increase revenue.

NBC Universal is the second major iTunes supplier recently to enter into a standoff with Apple over pricing and packaging matters. In July, the Universal Music Group — the world’s largest music corporation — said it would not renew its long-term contract with iTunes and would instead market its music at will (allowing it to remove songs from iTunes on short notice).

In its report, the Times suggests that the defiant moves by NBC Universal and Universal Music could embolden other media companies that have been less than thrilled with Apple’s policies.

NBC Universal was the second company to sign an agreement with Apple to sell content on iTunes and has since been talking to the company about offering Universal movies. No deal has been reached, however, because of piracy concerns on the part of NBC.

The existing contract between Apple and NBC Universal stipulates that Apple receive notice of NBC's plans to cancel 90 days before the expiration date, otherwise the deal would automatically renew.