NBC asks YouTube TV to bundle Peacock or lose access to NBC channels

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Sculpture of a big peacock.
enlarge / The giant peacock in front of 30 Rockefeller Plaza in New York City.

Getty Images | NBC

NBCUniversal recently asked YouTube TV to bundle Peacock, which is an NBC streaming service, and apparently failed to get many paying users. Comcast’s NBC wants Google’s YouTube TV to pay Peacock as a condition for continuing to access the NBC channel after the expiration of the two companies’ current contracts.

Google opposes this request, and NBC is clearly willing to abandon it. But the dispute over how much Google must pay to NBC is still unresolved, and both parties have warned that YouTube TV subscribers may not be able to access the NBC channel.

NBC’s Peacock demand arose during the ongoing shipping dispute between NBC and YouTube TV. Blog post Yesterday it was provided by investor research firm LightShed Partners. The existing shipping contract between YouTube TV and NBC will expire on Thursday. If the two companies do not reach a new agreement in time, about 15 NBCUniversal channels will be deleted from YouTube TV.

LightShed Partners wrote: “As part of the new affiliate agreement for the NBCU channel, NBCU is trying to force YouTube TV to bundle and pay for Peacock Premium.” Noting that this is a strange demand.

LightShed Partners wrote: “Your initial reaction should be why Peacock even participated in this discussion, because it is an excessive, direct-to-consumer streaming service.” “You don’t need YouTube TV or any MVPD/vMVPD [Multichannel Video Programming Distributor] Get Peacock’s services-through iOS/Android, tvOS, etc., $5 per month (with ads) and $10/month (without ads)… The whole point of DTC streaming is that you don’t need traditional multi-channel bundling Bag. “

When Ars contacted a Google spokesperson, a Google spokesperson confirmed that NBC asked YouTube TV to bundle Peacock and said that NBC’s demand would force subscribers to pay twice for the same content. Google also told Ars that although the proposed bundling arrangement will cost users more, subscribers must download and use the Peacock application separately from YouTube TV. In view of this, Peacock subscription is just an additional benefit of subscribing to YouTube TV without providing any special integration, making the two services easier to use together.

An NBC source familiar with the negotiations told Ars that NBC’s Peacock needs are currently “out of” the scope of the negotiations. But the source did not completely rule out the Peacock/YouTube TV bundling final agreement, because the negotiations are unstable and may change at the last minute.

NBC insists on “traditional business model”

LightShed Partners analysts said they “feel the main reason [for NBC’s demand] So far, apart from its use on Comcast/Cox set-top boxes, Peacock has been performing poorly, where it effectively serves as an updated version of the programs demanded by cable TV users… As NBCU strives to market Peacock directly to Consumers (as evidenced by their talk of “registering” and “paying users”), they are returning to the traditional business model of wholesale bundling to promote distribution. If they can force YouTube TV to play Peacock, we suspect they will try to force other vMVPD and MVPD to do the same. “

The dispute is a reminder that the common bundling of cable and satellite TV may not disappear with the rise of online streaming services. But in this case, LightShed Partners stated that it believes that NBC is fighting a losing battle and will eventually abandon its needs:

Although the battle of the carriage almost always ends with the collapse of the dispenser, it just feels different. NBCU…want[s] Show investors that Peacock is a “success” because the success of streaming is now the only important thing for media investors (thanks to Disney for the amazing success of launching Disney+) and maintain its increasingly challenging traditional broadcast/cable network assets. However, fighting an investor who does not care about the broadcast/cable network business and may regard YouTube TV as a technology platform for a hobby with little profitability, Comcast/NBCU will have a hard time winning. Given its aggressive marketing expenditures, Google clearly believes in the importance of YouTube TV to promote YouTube advertising sales. However, the influence of this negotiation feels like it is biased towards Google. Ultimately, we hope that NBCU will yield and exclude Peacock from the agreement.

According to what NBC sources told Ars, after LightShed posted a post, NBC may have given up its demand for Peacock.

Although YouTube TV is provided over the Internet, it is similar to traditional cable TV in that it provides a series of live channels, on-demand video and DVR services. Google clearly hopes that YouTube TV will continue to provide NBC channels without having to bundle Peacock. If NBC’s bundling needs succeed, this may be a better result for users who may be forced to pay more for YouTube TV.

Comcast CEO Brian Roberts July said Peacock has “54 million registered users and over 20 million monthly active accounts”.This includes registering Free tier, And it’s not clear how many people paid for the $5 and $10 tiers.As LightShed pointed out, the user ID also includes the person who received ad support $5 Peacock free Bundled with Comcast or Cox cable TV service.Comcast’s latest news Quarterly earnings announcement Said that the results of its media department included “US$363 million in losses related to Peacocks.”

If the dispute continues, Google will cut the price by $10

Google Announce In a blog post on Tuesday, if the NBC deal expires without a new agreement, it will reduce the monthly price of YouTube TV from $65 to $55 until the NBC channel becomes available again. Google pointed out that customers can register Peacock separately to “continue to watch NBCU content, such as Sunday evening football.”

LightShed Partners wrote that NBC made a similar Peacock bundling requirement to Spectrum TV operator Charter earlier this year, but “failed to allow Chart to carry Peacock Premium… and decided to conduct a short-term trial of the Chart submarine.”

“We can’t understand why YouTube TV pays for Peacock because they can simply tell subscribers to sign up for Peacock Premium through Google Play or any other app store,” the investment research company’s blog post said. LightShed wrote that one of the weirdest aspects of NBC demand is that “YouTube TV subscribers can’t even access Peacock from the YouTube TV app; they need to download Peacock and use the Peacock app. In addition, Peacock is available when you subscribe to YouTube TV ( Or any other MVPD/vMVPD), you have already received many of the next-day linear programs of NBCU.”

If the dispute is not resolved, the channels that may be removed from YouTube TV include NBC, Bravo, CNBC, E!, Golf Channel, MSNBC, Oxygen, SYFY, Telemundo, Olympic Channel, Universal Kids, Universal and USA Network.Also at risk is the visit to NBC Regional Sports Network In the Bay Area, Northern California, Boston, Chicago, Philadelphia, New York, the Northwestern United States, and Washington, DC.

YouTube TV wants to be treated “like any other TV provider”

According to reports, one of the crux of the negotiations was that YouTube TV asked NBC to agree to the most-favored-nation (MFN) clause. LightShed pointed out that other TV providers have been requesting MFN agreements for years, “[g]Given the size of YouTube TV and the growing importance of the industry, it’s hard to understand why they cannot protect themselves through MFN status. “Another area of ​​controversy is that YouTube TV must pay NBC the cost of the regional sports network, but LightShed’s post said that the Peacock and MFN disputes are “two major issues.”

“Our requirement is that NBCU treats YouTube TV like any other TV provider,” Google said in its blog post, which obviously refers to negotiations on the most-favored-nation clause. “In other words, during our agreement, YouTube TV seeks the same rates as NBCU’s services of a similar scale, so we can continue to provide YouTube TV to members at a competitive and fair price.” Google told Ars that NBC does not Willingness to provide contractual protection to ensure that YouTube TV will not pay more for NBC channels than TV providers of similar size.

Google’s blog post stated that “NBCU is our important partner” and “hope we can overcome this deadlock and make their content available on YouTube TV”. NBC took an aggressive stance and established an “You need channels“Warns users of the site, “YouTube TV may abandon your favorite channel. The NBC website urges users to express their dissatisfaction by contacting YouTube TV and provides a list of alternate TV providers that consumers can switch to.

NBCUniversal provided Ars with a statement stating that “NBCUniversal is seeking a fair price from Google so that YouTube TV can continue to provide the only product portfolio that provides entertainment, Hispanic, news, and sports networks. Unfortunately, Google refuses to use these fair prices. Prices are agreed and they are willing to hide entertainment, news, and sports programs from paying customers. NBCUniversal believes it has a responsibility to inform our fans that if Google continues to meet their requirements, they will risk losing their favorite programs.”

Analyst: Comcast should stick to broadband

Comcast continues to operate the cable network and media business thanks to its acquisition of NBCUniversal in 2011. In contrast, AT&T plans to divest WarnerMedia And pay more attention to its core telecommunications expertise, while Verizon also Give up the media business Sell ​​through Yahoo and AOL.

LightShed analysts said that Comcast should focus on broadband rather than media-but they don’t want this to happen.

“Given that Comcast investors really only care about Comcast’s broadband, it is increasingly difficult for us to understand why Comcast still has NBCU, let alone Sky in the UK,” LightShed wrote. “Not to mention, why is Comcast still engaged in the video bundling business and trying to force Peacock to succeed instead of just providing third-party vMVPD and SVOD/AVOD services on top of its incredible broadband channel? If Comcast exits NBCU, Sky” There is also a video bundling business, and its stock will soar. Unfortunately, for Comcast investors, none of this seems to happen soon. “

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