The NBCUniversal-YouTube deal could start the next chapter of the streaming wars

NBCUniversal’s announcement this week that it has a content deal with YouTube Premium could start a new chapter in the streaming wars — one that might be called, “Consolidation.”

Under the deal, which starts early next year, YouTube Premium subscribers in the US will get Peacock Premium with their subscription. Peacock’s content, including popular shows like “Love Island USA” and the Real Housewives franchise, will be available directly on YouTube — along with NBC’s portfolio of live sports like the NFL and NBA.

At launch, the YouTube Premium price of $15.99 per month will not change. Customers will receive Peacock Premium content at no additional charge.

YouTube Premium — the platform’s subscription, ad-free video product — is separate from YouTube TV, a bundle of live TV networks. The company says there are 125 million YouTube Premium users worldwide. Not available for US subscribers.

The deal reinforces NBCUniversal’s new strategy — agreeing on a streaming auction with distribution partner Peacock’s content import. NBCU struck a similar deal with Apple TV late last year, but that fund required customers to opt in to the offer, at a cost of $14.99 per month as opposed to $12.99 per month for Apple TV alone. The YouTube deal allows existing subscribers to gain access to all Peacock content immediately without paying any additional fees.

NBCU’s decision to allow Peacock content to appear on other streaming services could be a template for other media companies.

“Some strategies are more walled gardens,” Comcast CEO Mike Cavanagh said during the company’s earnings conference call last week, referring to other media companies. “Our approach is to build large businesses that serve our platforms, but we are looking for opportunities to have partners.”

The point of the NBCU deal, which will be launched as a separate publicly traded company with Comcast next year, is to get Peacock in front of more eyes. There is a large, young audience that spends a lot of “TV” time on YouTube. Now these people can tune in to NBCU’s programming on their natural viewing platform of choice – which translates into more advertising revenue.

For YouTube, the deal means a strong premium subscription offer. This could help YouTube in its bid to buy live sports rights. The company lost out to Netflix to stream many live NFL games earlier this year.

However, it remains to be seen how quickly NBCU will strike deals with other platforms. The danger in getting these types of deals is the ability to make people subscribe to the company themselves by making the content available elsewhere. NBCU executives felt YouTube was offering a fair economic deal to ease those concerns, according to people familiar with the matter.

The NBCU-YouTube deal could help set a precedent for future streaming deals.

Both Netflix again Disney are considering more deals with other media companies to bring new content to their broadcasts, according to public comments and media reports.

ESPN Chairman Jimmy Pitaro spoke of his interest in the concept on stage at CNBC’s Game Plan conference earlier this month.

“As part of a bundle or a partnership with a third party, we’re very focused on embedding content or importing it within the ESPN app,” Pitaro said. “It’s like a full back pay TV bundle. There’s almost no conflict. That’s right there. One app or one service and one username and password.”

ESPN has already struck a deal with The CW to bring sports to ESPN’s newly launched independent streaming app.

However, so far, NBCU has not been satisfied with offers from Netflix or Disney to import its content — or possible overlap among existing subscribers — according to people familiar with the matter, who spoke on condition of anonymity because the discussions were confidential.

If the first stage of the broadcasting wars was media companies launching their services, and the second was about making them profit, the third iteration of this battle is apt to be about consolidation.

Netflix, Disney, YouTube and Amazon aggregators are clear. They all already have the size and scale to reach hundreds of millions of viewers.

If Paramount Skydance again The acquisition of Warner Bros meet as they have been trying to, apparently they will be in that camp, too.

But if the Paramount-WBD deal doesn’t happen — held up by a government-led antitrust challenge — both companies are likely to fall into the licensing camp, alongside NBCU. That could really start the resurgence of cable bundles, as Pitaro suggested.

Fox, which announced its acquisition of Roku last month, can find itself on both sides of the equation. Its streaming service, Fox One, doesn’t have the scale of the major streaming services, but Roku gives Fox a big platform to build on if it wants to go in that direction.