First, NBC announced that it would not renew its contract with Apple to sell its television shows (including The Office and Heroes) on iTunes when it expired at the end of the year. Apple responded by announcing that it would stop selling NBC shows before the new fall season begins next month. As a reason for this decision, Apple cited not wanting to cut off shows midway through the upcoming season.
Financial terms are apparently the reason for the escalating feud. The move follows NBC’s decision to not renew its agreement with iTunes after Apple declined to pay more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. But iLounge suggests that Apple may have been the instigator by asking for a larger cut of the sale of each episode. Only then would NBC have responded with the higher pricing scheme.
There is certainly more at stake than just money here. The entertainment industry (television, movie studios, music labels) is realizing how much power Apple wields and is looking to claw back some of that control. Whether this move (or the one by Universal Music in July) achieves this goal remains to be seen. Or will it just push consumers towards pirated content?