In the days leading up to a potential blackout of NBC channels on YouTube TV, NBCUniversal made a seemingly outlandish claim.
“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,” the company said.
While NBC did not elaborate on what exactly that meant, we’ve since learned that Google (which owns YouTube TV) wants to fundamentally change how programmers like NBC distribute video in the streaming age. In addition to carrying NBC’s broadcast and cable channels, Google also wants YouTube TV to serve streaming content from Peacock, NBC’s separate streaming service. (For now, the companies have agreed to a short-term deal extension to avoid a blackout.)
Why is this a big deal? If Google gets its way, it will give customers one place to watch all of NBC’s programming, tearing down a longstanding divide between pay TV packages and standalone streaming services. While that ultimately makes sense for viewers, it’s probably not something NBC and its programming peers want.
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What the YouTube TV and NBC dispute is about
As I often tell folks who are trying to cut cable TV, streaming TV options typically fall into two buckets.
The first bucket includes standalone streaming services such as Netflix, Disney+, HBO Max, and Peacock. They offer a mix of original and library programming, including exclusive shows and movies that aren’t available on cable.
The second bucket consists of live TV streaming services, also known as cable replacements, or vMVPDs in the TV industry (the acronym stands for virtual multichannel video programming distributor). These services replicate the cable experience with a big bundle of live TV channels, cloud-based DVR service, and a library of on-demand programming. YouTube TV is the largest of these services with an estimated 10 million subscribers. Others include Hulu + Live TV, Fubo, and Sling TV.
The distinction between these buckets used to be pretty clear, but in recent years the lines have blurred. Standalone streaming services increasingly carry content that was once exclusive to cable channels, and live TV providers have started bundling up access to individual streaming services that have their own exclusive programming. (DirecTV, for instance, offers a bundle of entertainment channels, Disney+, Hulu, and HBO Max for for $35 per month.)
These changes are happening because traditional pay TV bundles are becoming worthless for anything but news and sports. The best new shows moved over to standalone streaming years ago, so distributors want to bundle up those services as a way to preserve value.
But surely you can see the problem, right? If YouTube TV starts offering bundled access to services like Peacock, people might spend less time using the actual YouTube TV app. The future could be one in which subscribers must sign into a bunch of different apps to watch everything that comes with a YouTube TV subscription, which isn’t great for YouTube and isn’t ideal for viewers either.
Enter “ingestion”
So when Reuters’ Aditya Soni and Puck’s John Ourand report that YouTube TV is seeking “ingestion” of Peacock’s content, they mean that YouTube wants to solve the problem of sending subscribers elsewhere. YouTube TV doesn’t want to just bundle Peacock subscriptions with its service, it wants the full Peacock catalog to be available directly inside YouTube TV.
NBCUniversal doesn’t like that idea. It wants people spending time inside the Peacock app, where it can collect viewing data, make more money from targeted ads, and promote more Peacock content. When the company says Google “wants to control what we watch,” it’s likely alluding to YouTube being in control of the experience, plus all the advertising and data collection that comes with it. (Also, NBCUniversal is owned by Comcast, which has its own plans to aggregate streaming content, so it might not want to cede ground to a competitor.)
Not every programmer is entirely opposed to “ingestion.” Philo, for instance, says it will bring HBO Max and Discovery+ content into its own app early next year, and Fubo will add ESPN+ programming to its app in the coming weeks. Amazon has also built a thriving business selling subscriptions to other streaming services (including Peacock’s ad-free tier) and offering their content through its own Prime Video app.
Still, programmers are unlikely to give up complete control of their content to third-party aggregators, which means skirmishes like the one between YouTube TV and NBC will keep happening with each new carriage renewal. While Hollywood loves to complain about how streaming destroyed the pay TV bundle, it’s not all too eager to let streaming companies build it back up again.
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