NBCU, YouTube strike distribution deal that bundles premium services
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NBCUniversal and YouTube have struck a broad, multiyear deal to bundle ad-supported Peacock Premium with YouTube Premium, beginning in 2027.
Why it matters: The deal addresses a strategic tension that surfaced last year during the companies' messy distribution negotiations.
Catch up quick: NBCU warned customers last fall its channels could go dark on YouTube TV if the two sides couldn't agree to new distribution terms.
- NBCU wanted YouTube to distribute Peacock as a part of its broader linear channel distribution deal with YouTube TV, but YouTube didn't want to bake Peacock into its live TV bundle offering.
- The two sides eventually agreed to a short-term deal to ensure NBCU channels wouldn't go dark for YouTube TV subscribers, but didn't announce a more formalized, long-term agreement until now.
Zoom in: Both parties appear to have negotiated a middle ground with the new deal.
- NBC gets a stronger distribution deal for Peacock Premium, but through a bundle with YouTube Premium, not YouTube TV.
- YouTube Premium offers subscribers an ad-free experience with perks like offline downloads. YouTube TV offers subscribers access to live TV channels as a traditional cable replacement.
- YouTube gets access to premium Peacock programming to strengthen its own subscription offering, without having to potentially raise prices on consumers for YouTube TV.
- The deal gives YouTube subscribers access to more live sports content, Universal Studios movies and premium TV content.
Between the lines: The new deal officially extends NBCU's multiyear distribution partnership with YouTube TV for its linear channels and extends its parent Comcast's distribution partnership with various YouTube products, NBCU said in a statement.
- The deal also deepens the companies' long-standing advertising and technology relationship while creating new opportunities for both firms across sports production and live sports on YouTube.
- NBC Sports, for example, will be the production partner for select premier live sporting events on YouTube.
- Some of NBCU's domestic products, such as its reality TV subscription streamer Hayu, will also be available to international subscribers via YouTube Premium.
- Peacock Premium will also be available as a separate add-on subscription through YouTube Primetime Channels starting later this summer.
Zoom out: The deal represents a strategic shift for programmers as they look to expand the reach of their streaming services, even if they don't own the customer relationships directly.
- Disney and Warner Bros. Discovery, for example, have struck distribution deals with telecom providers, such as Charter and Verizon, to offer traditional TV subscribers access to their streaming networks.
