NBCUniversal, YouTube TV mend rift with new distribution deal
Published in Business News
YouTube TV and NBCUniversal announced a new distribution agreement Thursday, averting a blackout that could have interrupted programming routines for millions of customers.
The previous pact expired earlier this week, but both companies agreed to keep talking. They were motivated to clinch a deal without provoking the ire of YouTube TV’s base of nearly 10 million customers.
NBCUniversal secured carriage for its entire portfolio of TV channels, including NBC, CNBC and Spanish-language Telemundo. In addition, the company will launch a new channel, NBC Sports Network, this fall and it will join YouTube TV’s lineup. The deal also makes Universal movies and television shows available to YouTube consumers on-demand.
“This deal builds on our long-standing partnership with NBCU while addressing the evolving media landscape and recognizing the importance of making content available where and how viewers want to watch it,” Justin Connolly, YouTube’s global head of media and sports, said in a statement.
Both Google-owned YouTube and NBCUniversal entered negotiations with considerable leverage.
NBCUniversal owns a portfolio of popular networks, including NBC-owned stations. NBC also has enduring primetime shows, including “The Voice,” “Law & Order: SVU,” not to mention marquee sports, including “Sunday Night Football” and next year’s Winter Olympics in Milan, Italy.
YouTube has grown dramatically in recent years, and now ranks as the nation’s top video provider, according to Nielsen. Its video site reaches more than 120 million active users, and YouTube TV — which delivers traditional networks including NBC, CBS and Bravo — now ranks among the nation’s top three pay-TV companies, along with Charter Spectrum and Comcast, owner of NBCUniversal.
Neither YouTube TV nor NBCUniversal divulged financial terms.
The smooth resolution came after a bumpy start. Late last week, NBCUniversal began girding for battle after tense negotiations with YouTube TV’s team, led by Connolly, a former high-ranking Walt Disney Co. executive who jumped to YouTube earlier this year, prompting an unsuccessful lawsuit from Disney to try to keep him.
NBCUniversal launched a messaging campaign designed to highlight Google’s dominance. Last year, YouTube generated $54.2 billion in revenue, second only to the Walt Disney Co., according to research firm MoffettNathanson.
By early this week, conversations between the San Bruno streamer and NBCUniversal became more productive, according to one person close to the situation who was not authorized to comment.
YouTube TV backed away from its earlier demand to fold programming created for Peacock, NBCUniversal’s fledging streaming service, onto the YouTube platform as part of its customer packages at no extra cost.
NBCUniversal instead wanted to follow a pattern set in August, when the Comcast-owned company struck an agreement with Amazon that allows Peacock to be offered to Prime Video customers for an additional $16.99 a month. As part of its announcement, the two companies said Peacock would eventually become available as a subscription through YouTube Primetime Channels.
“This agreement positions us for continued growth and reflects our commitment to delivering exceptional entertainment to fans across platforms,” Matt Schnaars, NBCUniversal’s president of platform distribution and paartnerships, said in the statement.
The agreement came two days after YouTube TV dropped channels owned by Spanish-language broadcasting company, TelevisaUnivision. Those two parties have been in a standoff over fees and distribution terms.
Some members of Congress, including Sen. Bernie Moreno (R-Ohio), have decried the situation, noting Univision’s importance to Spanish-speaking audiences. Moreno has asked Google to respond to his questions.
Last month, YouTube TV settled a spat with Rupert Murdoch’s Fox Corp., keeping its channels, including Fox News, on the platform.
YouTube’s distribution deal with Disney is said to expire later this month, teeing up another potential struggle.
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