Chernin digging in against Apple

News Corp. exec says iTunes talks sure to be 'prickly'

News Corp.'s Peter Chernin says Apple iTunes execs can expect a rough ride when they seek to renew content deals with his company.

The News Corp. COO, speaking at the Royal Television Society's biannual convention, said Friday that he expects the media giant's discussions with Apple to be "prickly, dicey and contentious" when the companies meet to discuss relicensing News Corp. content to Apple's iTunes digital music store.

His comments come as the relationship between media giants and platform aggregators like Apple becomes increasingly volatile. This month, NBC Universal, which accounts for almost one-third of iTunes' television sales, pulled out of relicensing talks. Universal Music also has backed out of its long-term contract with the download platform.

"I assume the negotiations (with Apple) will be prickly, dicey and contentious like all negotiations should be," Chernin said. "People will try to exercise all the leverage they can."

Chernin declined comment on speculation that News Corp. might follow NBC Uni in taking its content off the Apple platform, but he downplayed Apple's role as a key aggregator of News Corp. content.

"We have a pretty limited relationship with them," he said. "They sell some of our TV shows, but they don't license our movies."

Some analysts have speculated that NBC Uni was emboldened by the planned October test debut of Hulu, its video streaming joint venture with News Corp.

Chernin told reporters earlier in the week that News Corp. would not follow NBC Uni's example because there was a difference between the two forms of video distribution — advertising-supported realtime streaming of Hulu and Apple's paid downloads.

News Corp. distributes videos of shows on a nonexclusive basis on Amazon's Unbox digital platform.

Speaking on a panel about creativity at RTS, Chernin told the elite of the U.K.'s broadcasting world that their organizations will "become toast" if they fail to put creativity and innovation at the core of their operations.

"Fragmentation has caused the death of the mediocre middle, and that is the best thing that could happen to television," he said. "There are huge rewards for those who innovate, and death to those who do not."
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