• Forbes, Tuesday, September 4, 2007 10:45 AM

NBC decided not to renew its iTunes contract with Apple, and Apple retaliated by saying it would pull NBC programming from iTunes this month--three months early, and just in time for the beginning of the crucial fall season during which NBC will introduce many new shows. The brawl was over money, and to a lesser extent, privacy: NBC wanted to up the sale price of shows like "The Office" from $1.99 per download to as much as $4.99, it also wanted more help from Apple in keeping pirated videos off its iPods.

But the war probably won't make much difference because such efforts are moving to ad-supported streaming video. In the near future of always-connected mobile devices, people simply won't have the need to download TV and movie content. Besides, this was a business that didn't work well for media firms (save Disney), anyway. It's not the future of mass media distribution, but a small piece.

Which means that Apple will eventually have to revamp its strategy to include ad-supported programming. The popular rumor is that Apple's next video iPod will come bundled with Mac's operating system. Sources tell MediaPost that Apple is working separately on creating a free ad-supported video portal with major networks, record labels and movie studios.

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