Another day, another carriage dispute putting millions of customers in a lurch during the heart of football season. This time, it’s NBCUniversal and YouTube TV at odds.
According to a report by Alex Sherman in CNBC, YouTube TV’s current agreement with NBCUniversal, the parent company of NBC, USA Network, Golf Channel, MSNBC, CNBC, and more, ends at the end of September, and the suite of channels could go dark on the platform as the two sides tussle over terms.
While companies often go public as carriage negotiations go down to the wire, “this one feels a little different,” Sherman writes, suggesting, “YouTube TV, at 10 million, is getting to be a major player in the distribution game – and it wants to be treated as such. That means, it wants lower rates for NBCU’s networks.
“YouTube TV executives haven’t been thrilled with the way NBCU has priced Peacock, arguing it has undermined the wholesale value of NBCU’s cable bundle, according to sources familiar with the discussions. I’m told that’s one of the reasons why Peacock just raised its price in July,” Sherman reports, pointing to Disney, which has a deal expiring with YouTube TV in October, similarly raising prices to Disney+ this week.
Sherman also points out an interesting dynamic for those involved in carriage negotiations with YouTube TV. More than traditional pay TV providers, YouTube might have more of an appetite to hold a hard line in terms of blackouts during carriage battles. Why? Well, even if a customer decides to cancel their YouTube TV subscription, that likely comes as a boon for standard (free) YouTube as the customer tries to supplement their content consumption.
The CNBC reporter also cites a “half-joking” source that claims YouTube TV “needs to make an example out of someone” to prove to others in the industry it is serious about negotiating lower rates with its status as one of the largest pay TV providers in the country. If that source’s instincts are accurate, a blackout (or extended blackout) could be more likely than in recent carriage disputes, like that of Fox and YouTube TV last month.
Still, there’s a dynamic of mutually assured destruction here. Both NBC and YouTube TV need each other for their respective products to be viable; it’s just a matter of which is willing to hold out longer to get preferential terms.
Should this negotiation reach blackout status, the first major sporting event at risk would be a New England Patriots-Buffalo Bills game on Sunday Night Football on October 5.
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