Favored Status: iTunes Gives HBO Variable-Pricing Deal

HBO has reached an arrangement with Apple, where a major rift exists with NBC. In a new deal, HBO has achieved "variable pricing" for the sale of its shows on iTunes, allowing it to sell some at $1.99 an episode and others at $2.99. The deal marks the first time Apple has allowed a programmer to sell TV episodes for more than $1.99. HBO shows now on iTunes include all 94 episodes of "Sex and the City" (at $1.99 each) and seasons one and six of "The Sopranos" (at $2.99 each).

A call to Apple was not immediately returned.

NBC has lobbied for "variable pricing," and Apple's unwillingness to grant it led to a breakdown in negotiations. The network pulled its shows from the iTunes store last year.

Late last week, NBC Universal CEO Jeff Zucker told FT.com: "We think there should be a difference between an episode today of "The Office" and a library episode of something, whether it be "The Office" or something that was made 20 years ago."

Zucker said he remains hopeful that NBC will be able to reach a "variable-pricing" deal, adding that it was curious why Apple is allowing tiered-pricing for NBC Universal's films but holding to the $1.99 per episode for the TV content.

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Before the network's shows were yanked, episodes of "The Office" were routinely among the most purchased of all iTunes content. It's not clear whether NBC would accept $2.99 for episodes of top shows or would seek a higher price. NBC did not immediately return a call seeking comment.

To be determined: whether the HBO deal may give NBCU--and for that matter, other programmers--leverage in looking to alter pricing structures.

In regard to other HBO programming on iTunes, episodes of "The Wire" and "Flight of the Conchords" are going for $1.99 each. "Deadwood" and "Rome" are $2.99 each.

Unlike NBC's deal--in which an episode of "The Office" was made available just after it ran on the network--going forward, HBO's deal calls for its shows to be made available after (or the same day as) they become available on DVD.

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