Background: Universal Music Group and NBC are pulling back licensing contract with iTunes and looking for other alternative media outlets, due to pricing. Since 2003, Apple has been the world’s top media company, having 75% of online content sales. Apple would like to keep the pricing simplistic and low because its main objective is to sell iPods. However, the music labels and television networks would obviously like to charge more for content that is in higher demand. Problem: Currently, Apple’s pricing strategy for downloadable content is not influenced by demand. All songs, television shows, and movies have flat fees across their category. Apple is at odds over this pricing strategy with the music labels and television networks that provide the contents. Apple had created a profitable market with its iPod and iTunes products which is attracting competition. Currently, the music labels and television networks need Apple more than Apple needs them because of the iPods market share. Increased competition will erode Apple’s market share and its negotiating leverage. Objectives: Some of Apples future goals and objectives is to provide direct media exposure to independent artists, films, and television pilots. Continue growth with iTunes sales, maintain market power by diversify into mobile phone business sector; link to continual growth in personal computer market. Analysis: There are at least three possible outcomes for Apple for its future market position. Acceptinto NBC pricing demands. The advantage of doing this will make possible for Apple to keep NBC and other network buyer relationships. In contrast, Apple may lose market power, risking its consumer base that values simplicity and competitors can enter market which will create new challenges ...