NBC Uni, Vivendi bite Apple over iTunes

Pair of execs want more flexibility

NEW YORK -- Apple drew fresh criticism Monday from NBC Universal and Vivendi over its iTunes service.

NBC Uni chief digital officer George Kliavkoff rapped Apple for lackluster piracy protection in a keynote interview Monday at the Online Media Marketing and Advertising Conference & Expo here.

In addition, Vivendi CEO Jean-Bernard Levy decried the terms of its contract with Apple for Universal Music Group. "The split between Apple and (music) producers is indecent," he told reporters at a gathering of media journalists in France. "Our contracts give too good a share to Apple."

NBC recently decided to not renew its contract with Apple because of a dispute about pricing and bundling on iTunes.

An "underreported" part of the story, Kliavkoff said, was that NBC was concerned that Apple wasn't doing a good enough job to control piracy on iTunes.

"There's one other market leader out there that can set the tone for intellectual property," he said, implying Apple. "We hope they'll do that long-term."

Kliavkoff said that NBC has a contract with Apple to sell content on iTunes until December and that the network will continue to pursue selling its content with other companies on a download-to-own platform. However, he said, Apple would not provide NBC the deal terms that it seeks.

"There's only one place in the world where we don't have wholesale price flexibility," said Kliavkoff, who also expressed regret that NBC Uni's negotiations with Apple went public.

Levy told reporters that Vivendi is seeking new partners with which to try a more flexible pricing system. "We are trying to put in place several projects to ensure that music is better remunerated," he said. "We are not just talking to Apple."

Kliavkoff offered a few new details about Hulu, NBC Universal's online video joint venture with News Corp. He said Hulu's stand-alone site, set to launch next month in beta, "might" feature higher-quality video, full-screen capabilities and other "tools," which he didn't detail.

He added that Hulu distribution partners have been more cooperative regarding privacy protection, noting that such operators as AT&T and Comcast Corp. also have "stepped up" efforts.

Kliavkoff envisioned users coming across Hulu content on other sites and then going back to the stand-alone site, much like how many users first discovered YouTube when it was embedded on MySpace.

As far as advertising on the network and online in general, Kliavkoff said he had "no idea" what the best model was. "Anything you want to try, raise your hand and we'll try it out with you," he said to the marketer-heavy audience.

Long-term, Kliavkoff said, he was more concerned with how the proliferation of online content would affect a network's syndication business. He said the full-season TV series model could be adversely affected, too, by digital, but he doesn't see this happening for several years.

Also on Monday, NBC said it will offer free on-demand versions of several of its series to Cox Communications customers in Orange County and Palos Verdes, Calif., on a trial basis. The shows offered are "30 Rock," "Friday Night Lights," "Las Vegas" and the new series "Life" and "Bionic Woman."

Reuters contributed to this report.
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