If you go back to the original divorce papers, Apple says that NBC actually wanted to double the wholesale price of TV shows, making them $4.99. Even if you don't take Apple's word, NBC CEO Jeff Zucker said that what NBC wanted was a cut of hardware sales and to "take one show, it didn't matter which one it was, and experiment and sell it for $2.99."

That's a lot different than the pricing structure revealed yesterday. The $2.99 pricepoint is for high-def TV shows from every channel, not simply a popular show NBC tried to milk for more money. It's also commensurate with the elevated price for HD movie rentals or DRM-free tracks (though the DRM-free tax is bullshit). Yes, there is some flexibility in TV show pricing, but it's flexibility that benefits users—older shows are cheaper, and people get a discount for buying a Season Pass, which is pretty logical.

The price hikes that NBC asked for effectively didn't happen, and we can be damned certain they're not getting a cut of the hardware. They even come out and say that they didn't get all the pricing options they wanted. So, even if you consider selling older shows for 99 cents to be a concession on Apple's part, I fail to see how that's Apple bending to NBC's iron will: The pricing structure is not arbitrary (a show doesn't cost more just 'cause it's popular); we're not being asked to pay more than we used to pay for the same stuff; and the higher $2.99 price for HD or looong TV shows falls in line with how Apple has been treating HD video. See also: [Bits]

Wavexpress to Provide Internet Video Download Service for NBC’s Coverage of the Beijing Olympic Games

Free Service to Allow Media Center Users the Ability to Download Content During NBC’s Coverage of the Beijing Olympics, August 8-24, 2008

NEW YORK – June 23, 2008 – Wavexpress, a provider of broadband media technology and services, majority-owned by Wave Systems Corp. (NASDAQ: WAVX), has been selected by NBC Universal, Inc., to develop, host, and support a service for viewing NBC’s coverage of the 2008 Beijing Olympic Games in Microsoft’s Windows Vista Media Center. The announcement was made today by Perkins Miller, Senior Vice President, Digital Media, NBC Sports and Olympics, and Michael Sprague, President of Wavexpress.

The “NBC Olympics on the Go” service will take advantage of Wavexpress’ TVTonic Internet video service to allow Media Center users to watch channels of NBC’s coverage of Olympic events in up-to-HD quality on the go on their laptop. The free service will enable viewers to watch NBC’s extensive coverage of the Beijing Games on a sport-by-sport basis, with channels designated to match the hundreds of events included in the Games. Users can simply sign up for the channels they are interested in, and the service will automatically synchronize NBC’s video clips as they become available, so viewers will have a fresh slate of Olympic content to watch on their morning commute.

“This service will provide a fantastic viewing experience for Olympic fans with Windows Vista Media Center,” said Sprague. “They can choose their favorite sports, from diving to water polo to gymnastics, and extended coverage is automatically synchronized to their PC in the middle of the night. With a laptop, they will get a high-quality video experience to view on the train, the plane, or in the college quad.”

“As we prepare to broadcast the Beijing Olympic Games, we are committed to reaching as many viewers as possible,” said Miller. “Our partnership with Wavexpress will enable us to reach viewers seeking high-quality in-depth coverage of the wide range of sports that make up the Olympics. The service will especially appeal to fast-paced fans who want to catch up on their favorite sports offline.”

Interestingly enough, these new shows are priced at £1.89 while older shows such as Hercules: The Legendary Journeys (oh boy!) are priced at £1.19. NBC's desire for variable pricing for their shows and Apple's refusal to allow it is what drove the network away from the store in the first place last year. Does this mean Apple is giving in? Will we finally be able to watch Battlestar Galactica episodes via iTunes again? Time will tell. [PC World]

They're putting their shows out online in a million different ways (you can even download 30 Rock, The Office, Conan and Leno direct to your desktop now) and more than happy to pipe 'em to you, as long as it's in a controlled sandbox of some sort. NBC Direct requires a walled-garden player install with loads of DRM, and they wanted copyright controls from Apple and Microsoft to give just two examples, not to mention Hulu. It's sorta surprising that the QuickTime feed for iPhone is unprotected, but theoretically it's restricted to two devices. You know, if they'd just relax a bit, overall, they'd be in a good place online. [Silicon Alley Insider, Thanks Peter!]

"If you look at studies about MP3 players, especially leading MP3 players and what portion of that content is pirated, and think about how that content gets onto that device, it has to go through a gatekeeping piece of software, which would be a convenient place to put some antipiracy measures. We are financially harmed every day by piracy. It results in us not being able to invest as much money in the next generation of film and TV products."

To clarify, this happened because NBC doesn't own the distribution rights to all the shows they broadcast. In the world of television, networks and production studios are separate entities. It's not uncommon for a studio such as NBC to produce a show that will air on another network like ABC or Fox. And generally, the production studios get the final say as to how a show is used after it airs on television (i.e. DVDs, syndication, etc...). In this case NBC didn't get the say on all its shows on the iTunes Music Store. That explains why some shows, such as Chuck (pictured above and produced by Warner Bros.) are still on iTunes.

It also seems only this season of NBC shows have been pulled. Prior seasons of NBC shows previously sold are still available in their entirety. [setteB.IT]

"We don't want to replace the dollars we were making in the analog world with pennies on the digital side." Given that NBC apparently only netted $15 million in the last year of its deal with Apple despite accounting for 30-40 percent of video content sold (depending on whether you ask NBC or Apple), all the other contract sniggles aside, it's no wonder they bolted for Amazon—who probably ponied up a sweeter revenue sharing deal—and Hulu, where they'll have a sizable chunk of ad revenue. [Variety, Thanks John]

The piece alludes to "grumbling about Apple's prices" by Hulu's other daddy, News Corp., lending more weight to the possibility of a larger revolt against Apple sparked by the NBC walkout/booting. If News Corp. followed them to Unbox (its iTunes contract is also supposedly coming due), the video download market would become much more interesting. Unbox would gain some needed content firepower and the networks would be working with a distributor more beholden to them—and one with a direct line to millions of TiVos.

This party's so just getting started. [NYT, HuffPo via Tubewad]

Apple is giving NBC the boot starting with the TV season that's about to start, not even waiting until the official end of the contract in December, as they don't want to pull the plug mid-season. It's pretty lousy news for Apple as well, as NBC shows accounted for 30% of TV show sales last year. NBC may be planning to sell their shows on their new video site, Hulu.com, but if they plan on charging $5 an episode it's safe to say we all know where else we can go to download NBC's shows. And we'll be paying considerably less than $5 an episode there.

Here's Apple's full press release on the subject.

iTunes Store to Stop Selling NBC Television Shows

CUPERTINO, Calif., Aug. 31 /PRNewswire-FirstCall/ — Apple(R) today announced that it will not be selling NBC television shows for the upcoming television season on its online iTunes(R) Store (http://www.itunes.com). 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. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.

"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

Apple's agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September.

NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.

The issue seems to be the same old, same old: NBC wants to bump prices and complicate the packaging/pricing structure, while Apple ostensibly wants to keep things the way they are: simple.

More than likely, NBC's going to pull a Universal music: no long-term contract, but short-term sales agreements to keep their content up. That way they can still make money while (maybe) maintaining some leverage for negotiation. There's still a few months left, so it's possible they'll come to an agreement, but greed makes for some strong fences. [NYT]

Additionally, NBC announced that they'll be offering both iTunes-exclusive and non-exclusive programming to augment their iTMS presence. Viewers (or should they be called downloaders now?) will be able to watch great news-related shows like Time Capsule, where NBC talking head Brian Williams hosts episodes of past interviews with people such as President Kennedy. These programs cost $1.99 per episode, some of which are available right now, enabling you to get your daily General Electric-approved fix even from the office. – Nicholas Deleon

iTunes gets NHL Playoffs, exclusive NBC content [AppleInsider]

NBC offers variety of news in iTunes [USA Today/AP]

The comments seem a bit astro-turfy of late, but it's still a fascinating concept.

NBC Pilots "Conviction" on iTunes [Micropersuasion]

[Thanks Jay and Gabe!]