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.
Both Google-owned YouTube and NBCUniversal entered negotiations with considerable leverage.
NBCUniversal owns a portfolio of popular networks, including NBC-owned stations, CNBC, MSNBC, Bravo and the Golf Channel. 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 deal 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, including Justin 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.
“Google, with its $3 trillion market cap, already controls what Americans see online through search and ads — now it wants to control what we watch,” NBCUniversal said in a statement last week.
By early this week, conversations between the San Bruno streamer and NBCUniversal were 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 was not willing to bend on that point, according to two people close to the negotiations who were not authorized to speak publicly.
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.
The NBCUniversal 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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