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Sony May Take On iTunes in Download Arena

Apple may be getting another challenger in the world of music and video downloads. Sony may leverage its considerable video and audio assets to create a service that would allow users to download music and movies, according to a report in The Wall Street Journal Tuesday morning.

The company would use its PlayStation 3 and PlayStation Portable machines and its Bravia high-definition television to deliver content, according to the article.

A spokesman from Sony would not confirm the story and said the company had nothing to announce at this juncture.

This news comes on the heels of a public quarrel over contract terms between Apple and content provider NBC Universal, which threatens to sever ties between the two.

Tempers flared when NBCU said it would not renew its contract with Apple iTunes unless it received more flexibility in wholesale pricing terms for its content, including the ability to package shows.

Copy protection is also at issue, according to NBCU executive vice president of communications Cory Shields. The company believes Apple has not adequately taken steps to protect content from piracy.

Apple, in turn, said it was pulling NBCU content for the upcoming season as of September, since it would have to stop selling them halfway through the season when the contract expires in December. Apple contended that NBCU sought to inflate the wholesale cost of its shows, which would result in retail price increases to $4.99 per episode from $1.99.

NBC U said it expects Apple to honor its contract through the December expiration. Under the terms of the contract, Apple is required to carry new episodes of shows already available on iTunes, but not those shows that are new this season

According to Apple, NBC U provided iTunes with three of its top-10 best-selling shows last season, accounting for 30% of iTunes TV show sales.

The flap erupted just ahead of the launch of Hulu, NBC U's and News Corp.’s video site, which will begin beta-testing in October. Meant to be a challenger to YouTube, the site will stream ad-supported video content from the stables of both companies, including 24, The Office and The Simpsons.

NBC U is also using’s video download site as a distribution outlet. That site is expected to launch in September.