Anyone who has been to one of Steve Jobs' media events knows well the thrall cast by the Apple chief executive. Music blares, the lights dim, and Jobs mesmerizes as he demonstrates the bells and whistles of Apple's latest offerings. But he had more than the usual ground to cover on Sept. 5.

By the time he was done, he had announced an overhauled iPod product line that includes a slick, video-enabled iPod nano and a Wi-Fi-enabled "iPod touch" that introduces the innovative iPhone touch-screen technology to iPod users. And most surprising of all, he slashed the price of the iPhone by $200.

But not all Apple affiliates are applauding the company's act. Hollywood and music company executives whose songs, movies, and other digital programming are distributed over Apple products are clamoring for Jobs to cut them a better deal.

Warner and CBS on the Fence

That displeasure became public in late August, when both Apple and General Electric's NBC acknowledged that Apple will soon no longer let iTunes users download NBC shows such as Heroes and The Office. But frustrations of content owners were building for months before NBC took action. In late spring, Universal Music, which produces roughly 1 in every 3 CDs, cut off talks for a long-term deal with iTunes, although it continues to make its music available. Both Universal and NBC want greater flexibility in the pricing of their products—efforts at independence that Jobs has so far refused to entertain, arguing that consumers won't pay the prices content providers want to charge.

That leaves Universal and NBC to look for other ways of distributing their content. NBC, for example, has its own Web site as well as a joint venture with News Corp. called Hulu. And the day before Jobs took to the stage in San Francisco, NBC said it would sell TV shows through Amazon's new Unbox service, moving up the announcement date by a week just to make sure the Apple CEO was listening. As part of the deal, Amazon would offer discounts for buying full seasons of shows such as 30 Rock, and sell single shows for the same $1.99 they sold for on iTunes. That suggests NBC was telling the truth when it denied Apple's charge, made via press release on Sept. 4, that the studio wanted to charge $4.99 per show. But one insider says NBC had no choice but to stick with the traditional pricing on Amazon, rather than aim for an increase—which would have played into Jobs' efforts to paint it as overly greedy.

So should Steve Jobs be worried? Perhaps—but only if NBC and Universal's experiments in independence pay off. Warner Music Group, whose contract with iTunes comes up at the end of the year, is said to be watching with interest how Universal does with its pressure on Apple.

On the TV side, CBS, which signed a short-term deal for its content, is also watching the ongoing NBC-Apple talks to see if Jobs blinks. Neither Warner Music nor CBS would comment for this story.

Starbucks Connection

But Jobs hardly seems worried: On stage at the Moscone Center, he chose John Lennon's Give Peace a Chance to demonstrate a new feature that lets users create ringtones on their iPhones. "That's for when NBC calls," he deadpanned. In a later interview with BusinessWeek, he said that while he would like to reach an agreement with NBC, Apple has plenty of other agreements in place. "We'd love to put this back together, and hopefully over time we will," said Jobs, who claims he's had no indication that other content partners might refuse to agree to his terms. Regarding NBC's move, he says: "We've gotten very puzzled reactions from the other television studios. We sell 550 TV shows provided to us by 58 broadcast and cable networks. Rome is not burning here."

Nor will it any time soon, judging from the lineup unveiled Sept. 5. Jobs slashed the price of the iPhone, to $399 from $599, to juice up sales, and introduced a new iPod nano that adds video capability for the same price as the older models. He unveiled a deal to put a Facebook application for connecting with friends on the new Wi-Fi-enabled devices, and—in one move labels are likely to cheer—introduced the iTunes Wi-Fi Music Store that lets iPhone and iPod touch users buy music via Wi-Fi connections.

Many of those purchases will likely occur at Starbucks stores. CEO Howard Schultz was on hand to announce a new collaboration that gives any device with iTunes free access to the coffee chain's hotspots—and the ability to easily buy music that's playing while ordering that latte. The implication was clear: Jobs had taken off the gloves, unmasking a blizzard of new flashy, and even more affordable, devices to all but crowd out lesser competitors. If content owners wanted to mess with him, Jobs seemed to be saying, let them find enough folks using other devices to make a dent. "This new line of products will make it much harder for any content provider to walk away from Apple," says Tim Bajarin, president of Creative Strategies.

Apple Dominance

All that means is that the next few months will be a wingding for lawyers and executives involved in the still-touchy discussions between Apple and its restless content providers. The studios and record labels have chafed for years that Jobs was low-balling their content, setting arbitrary rules that limited their ability to promote lesser-selling stuff, and demanding guaranteed contracts that gave him a better deal than the content folks.

The endgame seems simple enough. The content guys want Apple to treat them much as Wal-Mart or Blockbuster might: They get to set a wholesale price, not Apple, which has insisted from the outset that content providers get roughly 70% of whatever retail price Apple puts on its content. NBC, for instance, might want to set a higher price for a package that would include its sci-fi hit Heroes with older episodes of Battlestar Galactica, thus moving more units of a series that might not be selling as well.