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Talks stalled over YouTube TV's distribution rates for

NBCUniversal shows

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YouTube TV seeks to integrate NBC's Peacock content

directly on

its platform -source

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YouTube's grip on online video gives it leverage over

media

companies

By Aditya Soni

Sept 30 (Reuters) - Popular NBC shows including "Sunday

Night Football" and "America's Got Talent" may disappear from

YouTube TV as soon as Tuesday if the two sides fail to agree on

a new distribution deal, a standoff that could influence the

future of television.

Carriage talks have stalled over the rates Alphabet's

YouTube TV will pay to distribute to its 10 million

subscribers the shows of Comcast ( CMCSA )-owned NBCUniversal,

the two companies have said.

But a bigger negotiation looms behind the scenes, and it

reflects the newfound clout of YouTube as the dominant provider

of video services in the United States.

YouTube TV wants to show content offered exclusively on

NBCUniversal's Peacock streaming service - such as hit reality

series "Love Island" - directly on its platform, a person

familiar with the talks told Reuters. Currently, users have to

open the Peacock app to see the shows, even on YouTube TV.

Known as "direct ingestion," it is an approach that

NBCUniversal opposes, as it wants to preserve Peacock - which it

launched in 2020 - as a standalone service that can collect

subscriber data and sell targeted ads. For YouTube, securing NBC

content would aid its push to become the country's biggest

pay-TV distributor and strengthen the core ad business of Google

- which is also owned by Alphabet - on smart TVs, where ad slots

command premium rates.

These battles "will have important strategic implications

for the future of media," LightShed analyst Richard Greenfield

said in a note to clients. Disney's ( DIS ) carriage deal with

YouTube TV is also up for renewal at the end of October and

similar talks will likely occur then, he said.

"We suspect YouTube TV cares far less about the rate it

ultimately pays and far more about being able to ingest content

from legacy media streaming apps," he said.

YOUTUBE'S GROWING CLOUT

YouTube now accounts for the largest share of TV viewing in

the U.S., ahead of streaming rival Netflix ( NFLX ) and

traditional media companies such as Disney ( DIS ), according to

Nielsen.

Its cable-like subscription service, YouTube TV, ranks among

the four largest U.S. pay-TV distributors, and Alphabet's deep

pockets recently gave it leverage over Paramount and

Fox Corp ( FOXA ) in carriage talks, according to media firms

and analysts.

NBCUniversal offered YouTube the same terms it extended to

other large TV distributors - including Amazon's ( AMZN ) Prime

Video Channels - and is looking to include its streaming service

as part of the bundle of programming YouTube TV distributes,

said the person familiar with the negotiations, who requested

anonymity because the talks were private.

An NBCUniversal spokesperson said in a statement last week:

"YouTube TV has refused the best rates and terms in the market,

demanding preferential treatment and seeking an unfair advantage

over competitors to dominate the video marketplace - all under

the false pretense of fighting for the consumer."

The online video service counters, however, that

NBCUniversal is asking for YouTube TV to pay more for its shows

than the media company charges consumers for the same content on

Peacock. The company said in a blog post on Thursday that it

would offer YouTube TV subscribers a $10 credit if NBC content

is "unavailable for an extended period of time."

Analysts believe that losing carriage on YouTube TV could

cut affiliate revenue and shrink subscriber bases for

traditional media companies, with little assurance that viewers

will migrate to their standalone streaming apps.

For Google, losing NBC content could weaken YouTube TV's

appeal on connected TVs.