YouTube TV and NBC avoid blackout for now but are still at odds in negotiations

[Karlston]

Today's blackout averted with "short extension" while contract talks continue.

NBC's logo on the NBC Tower in Chicago on March 25, 2011.

Getty Images | Raymond Boyd

YouTube TV and NBCUniversal are still at odds in negotiations over a new contract that would allow NBC channels to remain on the Google-owned streaming service. The existing contract was set to expire at 12 am ET today, but the companies agreed to a short extension that prevents a blackout for now.

 

"NBCUniversal and YouTube TV have agreed to a short extension while parties continue talks. NBCUniversal will not go dark on YouTube TV at midnight eastern tonight," NBC said in a statement provided to Ars last night.

 

NBC declined to say how long the extension is, and YouTube TV owner Google did not comment. About 15 NBC-owned channels and eight regional NBC Sports networks could still go dark on YouTube TV if the companies don't agree on terms before the extension expires.

NBC’s unusual Peacock demand

Channel blackouts and contentious carriage negotiations have long been part of the TV industry, though some things have changed now that online streaming services like YouTube TV compete against cable and satellite. The Comcast-owned NBCUniversal came up with an unusual tactic in this round of negotiations, demanding that YouTube TV bundle Peacock, NBC's own streaming service. NBC has struggled to convince individual subscribers to purchase the $5 or $10 premium tiers of Peacock, and the company is "falling back on their legacy business model of wholesale bundling to drive distribution," as investor research firm LightShed Partners wrote.

 

Peacock is unlikely to be in a final contract between NBC and YouTube TV, as we reported Tuesday. An NBC source who is familiar with the negotiations told Ars at the time that NBC's Peacock demand was "out" of the negotiations—but the source wouldn't say definitively that NBC wouldn't try to put Peacock back on the table. Google had objected, saying that a bundle would force subscribers to pay twice for the same programming because Peacock has much of the same content as NBC channels.

 

Even if Peacock is out of the mix, the sides still have to agree on an overall price and other considerations. YouTube TV is seeking a most-favored-nation clause, saying that it wants contractual protections ensuring that YouTube TV doesn't pay more for NBC channels than similarly sized TV providers do. Google said it will cut the YouTube TV monthly price from $65 to $55 if NBC channels are blacked out and pointed out that customers can sign up for Peacock separately.

 

NBC claimed it is just "seeking fair rates from Google" and tried to pressure the company by setting up a "You Need Channels" website that warns users, "YouTube TV may drop your favorite channels." The NBC website urges users to complain to YouTube TV and to consider switching to other TV providers.

 

 

YouTube TV and NBC avoid blackout for now but are still at odds in negotiations