I think NBC (Universal) is going to be the bigger loser in this ultimately, though, I would caution Apple not to display too much hubris going forward, because there is a growing perception that partnerships with Apple benefit Apple more than anyone else. I'm not saying that this is the case here, but it's the perception that counts. In that regard, Apple's press release was a wise and timely move.
I still wonder if Apple should not have just bitten the bullet on this one. For one thing, NBC could not have honestly wanted there episodes going for $4.99 while every other network remained at $1.99. It sounds like it was the first move in a game of hardball negotiating that Apple was simply not willing to entertain. In terms of big picture though, Apple could have afforded to take less profit, or even a slight loss, because they are not really in the business of selling music and tv shows, they are in the business of making iPods (and Macs, and iPhones...and one day AppleTVs). iTunes only exists to support the realm of downloadable content, because the more people there are out there downloading music and video, the more iPods Apple is going to sell. Let's face it, if I'm going to watch video on the go I'm probably going to do it on an iPod. As a percentage of revenue, everything Apple makes off of iTunes is pocket change, so why they would want to play hardball with profit sharing kind of confuses me. They are going to punish NBC over this, and have them come back with their tails between their legs, but it'll probably just make other content providers nervous about who they are currently in bed with, and thus explore the option of other alternatives.
In any event, NBC should have known better. For one thing they got a hell of a lot of free advertising through iTunes, and I am almost certain that shows like Heroes would not have been as successful had it not been for iTunes, and people's ability to catch up on eps they missed, or get into the show late into the season. They are completely overplaying their hand, but I guess my point is, so might Apple...
