NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes, The New York Times is reporting today.

In retrospect, this move isn't entirely unexpected, given that Universal already pulled out of their contract with Apple and began selling unprotected versions of its music in competing music stores. Still, the news for Apple's iTunes Store hasn't been good lately, as media companies grow increasingly frustrated with Apple's fixed media pricing.

Most analysts and consumers feel that the fixed pricing is what makes the iTunes Store a success. Here's an example from the NYT article that illustrates how the studios could botch it up: "NBC Universal and other companies say they want to increase prices by packaging content--say an episode of 'The Office' with the movie 'The 40- Year-Old Virgin,' because they both star the comedian Steve Carell."

These useless groupings are exactly why consumers like the a la carte model. Otherwise we're heading back down the road to $18 CD albums with one good song on them.

2:42 pm Update: Forget about the end of the year. The Associated Press is reporting that Apple escalated the dispute with NBC Universal over the pricing of television shows by announcing Friday it would not sell any of NBC's programs for this fall season on iTunes.

"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes, in the AP report. "We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers."

NBC to End iTunes Sales of Its Shows [NYT]