Popular NBC shows including “Sunday Night Football” and “America’s Got Talent” may disappear from YouTube TV as soon as Tuesday if the two sides fail to agree on a new distribution deal, a standoff that could influence the future of television.
Carriage talks have stalled over the rates Alphabet’s YouTube TV will pay to distribute to its 10 million subscribers the shows of Comcast-owned NBCUniversal, the two companies have said.
But a bigger negotiation looms behind the scenes, and it reflects the newfound clout of YouTube as the dominant provider of video services in the United States.
YouTube TV wants to show content offered exclusively on NBCUniversal’s Peacock streaming service – such as hit reality series “Love Island” – directly on its platform, a person familiar with the talks told Reuters. Currently, users have to open the Peacock app to see the shows, even on YouTube TV.
Known as “direct ingestion,” it is an approach that NBCUniversal opposes, as it wants to preserve Peacock – which it launched in 2020 – as a standalone service that can collect subscriber data and sell targeted ads. For YouTube, securing NBC content would aid its push to become the country’s biggest pay-TV distributor and strengthen the core ad business of Google – which is also owned by Alphabet – on smart TVs, where ad slots command premium rates.
These battles “will have important strategic implications for the future of media,” LightShed analyst Richard Greenfield said in a note to clients. Disney’s carriage deal with YouTube TV is also up for renewal at the end of October and similar talks will likely occur then, he said.
“We suspect YouTube TV cares far less about the rate it ultimately pays and far more about being able to ingest content from legacy media streaming apps,” he said.
YOUTUBE’S GROWING CLOUT
YouTube now accounts for the largest share of TV viewing in the U.S., ahead of streaming rival Netflix and traditional media companies such as Disney, according to Nielsen.
Its cable-like subscription service, YouTube TV, ranks among the four largest U.S. pay-TV distributors, and Alphabet’s deep pockets recently gave it leverage over Paramount and Fox Corp in carriage talks, according to media firms and analysts.
NBCUniversal offered YouTube the same terms it extended to other large TV distributors – including Amazon’s Prime Video Channels – and is looking to include its streaming service as part of the bundle of programming YouTube TV distributes, said the person familiar with the negotiations, who requested anonymity because the talks were private.
An NBCUniversal spokesperson said in a statement last week: “YouTube TV has refused the best rates and terms in the market, demanding preferential treatment and seeking an unfair advantage over competitors to dominate the video marketplace — all under the false pretense of fighting for the consumer.”
The online video service counters, however, that NBCUniversal is asking for YouTube TV to pay more for its shows than the media company charges consumers for the same content on Peacock. The company said in a blog post on Thursday that it would offer YouTube TV subscribers a $10 credit if NBC content is “unavailable for an extended period of time.”
Analysts believe that losing carriage on YouTube TV could cut affiliate revenue and shrink subscriber bases for traditional media companies, with little assurance that viewers will migrate to their standalone streaming apps.
For Google, losing NBC content could weaken YouTube TV’s appeal on connected TVs.
