NBCUniversal and YouTube are back to being buds after the two deeply divided frenemies negotiated a new carriage deal, avoiding a YouTube TV blackout of NBC, Peacock, Telemundo and a whole bunch of cable channels. NBCU executives probably breathed a particularly deep sigh of relief knowing that such a dispute won’t be so *easy* next time. The scales are tipping, and fast.
NBCUniversal parent company Comcast has the largest multichannel video programming distributor in the U.S., but it, like all traditional MVPDs, is steadily losing subscribers by the millions. Guess where most cord cutters and cord nevers are flocking instead for their broadcast and cable fix? YouTube TV.
YouTube TV is the only “cable” provider that is growing at a scale worth mentioning. With about 10 million subscribers, the service has not yet eclipsed Comcast and Charter, but it is on a trajectory to do so — and soon. Last year, the analysts at MoffettNathanson predicted YouTube TV would become the largest linear pay-TV provider in the U.S. by 2026.
Simultaneously, content (and channel) providers like NBCU are losing bargaining power by losing viewership share. Cable TV in particular has become such dead weight that Comcast/NBCUniversal chose to spin off every channel it owns save Bravo (and NBC, but that is broadcast) into a new company, Versant. And it’s not alone: Warner Bros. Discovery is doing the same. (Disney considered it, but chose not to — yet.)
The new NBCU will be comprised of NBC, Bravo, the NBCU studios and streaming service Peacock. Its assets are better than Versant’s, but none of the linear channels perform like the old days. The economics of streaming are nothing like the businesses it replaced, and even in a tough environment, Peacock stands out as somewhat of a lame duck.
Try taking that up against a true Goliath in Google (Alphabet, really), the $3 billion (by market cap) behemoth that owns YouTube TV. Alphabet barely cares about YouTube TV’s financial performance — it is the Apple TV+ to Apple, a cell phone maker.
By market cap, Alphabet is 25 times as large as Comcast — and NBCUniversal is just a part of Comcast. It’s not a fair fight. That does not mean that NBCU’s assets are of no real concern to YouTube TV. A blackout removing Notre Dame games and the NFL’s Sunday Night Football would have raised some hell among the service’s subscribers. And a lengthy blackout could have run into the return of the NBA to NBC (and now also on Peacock) and WWE premium live events. NBC also carries well-watched (for the times) primetime programming like The Voice, the One Chicago shows and the Law & Order universe, and Bravo has a bigger following than you think. (Attend a BravoCon — or now stream it on Peacock! — you’ll see.)
Bravo’s ’The Real Housewives of Salt Lake City’ (L-R) Angie Katsanevas, Whitney Rose, Bronwyn Newport
Fred Hayes/Bravo
YouTube TV’s clout is growing despite the still-emerging nature of its scale. Its parent pays the bills, but it is the vMVPD’s big brother that protects it within the streaming video space.
Regular ol’ YouTube is by far the largest media distributor in the television industry, with a 13.1 percent market share, per Nielsen. The entire Disney streaming and television portfolio is second with a 9.7 percent share; NBCUniversal ranks fourth with 7.6 percent.
An argument can be made that NBC needs YouTube more than it needs YouTube TV (for now). The free-to-use user-generated-content video hub is where the vast majority of humans consume SNL sketches and Jimmy Fallon/Seth Meyers clips. Yes, it is YouTube — not NBC — that is the true destination for NBC late-night programming. If NBC pulled SNL, The Tonight Show and Late Night content from YouTube, it would lose millions in revenue and millions of eyeballs. For YouTube, the loss could be written off with a shoulder shrug.
Both sides say they are happy with the result of a tough carriage negotiation, which carried on two days beyond its natural deadline. Surely — to some degree at least — that is true. It may not be in the future, which will likely see disproportionate concessions from the channel/contend-provider side as the power continues its shift toward YouTube TV. A big one from yesterday’s deal may have flown under the radar.
The YouTube side pushed for — and attained, to a large degree — a “direct ingestion” of Peacock content. YouTube Primetime Channels (not to be confused with YouTube TV) subscribers can now subscribe to Peacock directly through the YouTube app and access its content without even entering the Peacock ecosystem. There will still be branding on Peacock content like The Paper and Bel-Air, and NBCU still gets paid (a portion), but it renders the Peacock app itself somewhat unnecessary.
YouTube TV received a limited “direct ingestion” of Peacock content; original programming and certain exclusive games will not be available to those who subscribe to the vMVPD but not Peacock.
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