Monday, February 28, 2011, 05:25 am PT (08:25 am ET)
Federal rules ensure Apple's iTunes has right to Comcast's NBC contentComcast agreed to continue licensing of NBC content to online video services like Apple's iTunes in order to receive government approval of its acquisition of broadcast network NBC.
In the terms of the acquisition approved by the U.S. government, cable provider Comcast has agreed to let online rivals that compete with its own cable subscriptions and online "Fancast" product license NBC programming, according to The Associated Press. Though NBC's shows are already available on the iTunes Store, NBC has not participated in Apple's 99-cent iTunes TV show rental model for the new Apple TV.
"We do not think 99 cents is the right price point for our content," former NBC Universal Chief Executive Jeff Zucker said last year. Zucker was fired by Comcast in September. "We though it would devalue our content."
But now it's also possible Comcast could allow NBC content to become available for rent on the Apple TV and iTunes in order to appease the federal government, based on the terms the company agreed to. Regulators scrutinizing Comcast's acquisition of NBC showed concern that online media services like iTunes would suffer from a cable provider owning a broadcast network.
Products like iTunes are sometimes used by customers to "cut the cord" and cancel their cable subscription. There's also the possibility that Comcast could "throttle" bandwidth for services like Netflix and iTunes, making downloads slower or streaming content stutter and become unwatchable.
Federal officials reportedly attached dozens of conditions to the government's approval of the Comcast-NBC deal. Specifically, Comcast must sell its content to online video services, though no specific provisions were made related to 99-cent Apple TV rentals.
In addition, Comcast may not interfere with video traffic for other, competing services over its broadband network, and it must sell standalone Internet services with 6 megabit download speeds for about $50 per month, without being tied to a cable TV package.
"Although these requirements offer no guarantees of success for new online video services, they aim to ensure that Comcast cannot impede the online businesses," the report said. "They also break new ground by giving Internet rivals some of the same protections that have long been available to satellite companies and other subscription TV competitors."
NBC has had a tumultuous relationship with Apple and its iTunes service in the past, before the Comcast acquisition. In August of 2007, NBC abruptly pulled its content from iTunes after Apple wouldn't agree to doubling the wholesale price of each TV episode.
NBC eventually returned to the iTunes Store in September 2008, when Apple began offering high-definition content for $2.99 per episode, compared with the standard-definition pricing of $1.99 for an episode. The new requirements from federal regulators would make it more difficult for Comcast to pull NBC content from iTunes again.
And while NBC has continued to hold out from offering content for the new streaming-centric Apple TV, rival networks Fox and ABC both agreed to be launch partners by offering 99-cent TV episode rentals. TV executives were said to be "uncomfortable" with Apple's pricing model, but some were willing to go forward with what they consider to be an "experiment."
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