YouTube’s Peacock Partnership is a Streaming Bundle Breakthrough

The Streaming Wars are over. The Platform Wars have just begun.

In an opening shot, Google announced a multi-year deal on Monday that will make all of NBCUniversal’s Peacock content, from “Love Island USA” to “The Office” to the NBA and NFL, available for US YouTube Premium subscribers starting next year. While bundles are hardly new in the streaming era (Disney+ and HBO Max can be packaged at a discounted rate, for example), the deal does offer a genuine innovation in the modern media landscape.

Content Without Borders

Unlike other bundles, the deal announced Monday will make all of Peacock’s content available directly in YouTube, for Premium subscribers. That means Premium users (who pay $15.99 a month for an ad-free YouTube experience, in addition to other perks) can click from a MrBeast video straight to Sunday Night Football. Gone are the days of exiting one app and opening another, a step made all the more tedious when using a TV remote. 

Zoom out, and the deal shows how the relative losers of the Streaming Wars are retooling as new age content distributors. Earlier this month, a Wells Fargo note suggested Disney’s share price could gain 40% if it ditched its proprietary streaming services to become a full-time licensor, arguing it cannot achieve the economics to compete in the streaming landscape. It’s a suggestion that Comcast’s soon-to-be-spun-off NBCUniversal, with its measly 48 million Peacock subscribers, appears to be taking to heart. It also beats the nauseating and expensive process of a merger or acquisition, as Paramount head honcho David Ellison now knows all too well.

For YouTube, the partnership is the latest and greatest attempt to trounce Netflix as both seek to become all-in-one entertainment platforms:

• By subscriber count, YouTube Premium almost certainly trails Netflix; Google last reported Premium’s subscriber figure at 125 million in March of last year, while Netflix has 325 million. But by engagement, YouTube consistently outranks Netflix in total US TV time, according to Nielsen.
• Netflix executives had discussed a similar deal for an in-app bundling of Peacock, according to a Wall Street Journal report earlier this month, but now YouTube has beaten them to the punch (though neither YouTube nor NBCUniversal claimed any exclusivity in the deal on Monday, so it’s possible a similar deal with Netflix is on the table). The streamer has recently lured high-profile video podcasts off of YouTube in a bid to shore up TV time. 

A Universal Theory of Football: But podcasts are one thing, and NFL broadcasts, the crown jewel of US media, are another. “It’s almost like an asset-light way of licensing these games,” Third Bridge sector analyst John Conca told The Daily Upside, adding that the bundle makes YouTube “the front door” for cable-cutting sports fans. “I think if you’re a Netflix, you have to find a way to counter,” he added.