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Online Rights Figure Into New NBCU Deals

Peacock Strikes Wide-Ranging Pacts with Trio of Carriers 12/02/2012 7:00 PM Eastern

NBCUniversal has been on a tear recently, striking three comprehensive carriage deals in November and continuing the growing trend in the industry to bundle cable, broadcast and online carriage rights with top distributors.

Last Monday, NBCU — which includes about 10 NBC owned-and-operated TV stations, 14 Spanish-language Telemundo O&Os and about 15 cable channels, including CNBC, MSNBC, Syfy and Bravo, reached a multiyear carriage deal with Verizon Communications, covering the telco’s 4.6 million FiOS TV customers.

Included was retransmission consent for NBC’s 10 broadcast stations; a comprehensive TV Everywhere deal for online rights to all of NBCU’s pay TV networks and the Olympic Games; and several regional sports networks, including Comcast SportsNet Philadelphia, Comcast Network Philadelphia, Comcast SportsNet Mid Atlantic, Comcast SportsNet New England.

CABLE PACTS

The FiOS deal comes on the heels of two similar deals with Cablevision Systems and Suddenlink Communications.

The deals reached by NBCU and others this year follow a growing trend by major content providers to bundle together pay TV, broadcast and online rights in sweeping, long-term agreements. CBS and The Walt Disney Co. started the trend in 2010 with sweeping deals that included pay TV, broadcast and online rights well before existing agreements were expected to expire.

And both content giants upped the ante in later deals. For example, Disney’s 2010 agreement with Time Warner Cable included carriage of such cable networks as ESPN, ABC Family and the Disney Channel, its broadcast stations and online rights, including its then-new Watch ESPN app. Disney expanded that significantly in a 10-year deal with Comcast, including its 25 Disney- owned networks and more than 70 services, adding “Watch” apps for Disney Channel, ABC, and ABC Family. Cablevision signed a similar pact with Disney in October.

NBCU executive vice president of content distribution, Matt Bond said in an interview that while the recent deals may seem early, they are in line with the normal cycle of such agreements. And the TV Everywhere component, especially on the Olympics side, is becoming more and more critical to carriage deals, he added.

“One thing we’ve seen after the last few years is that customers do want to consume this video content on devices in and out of the home and tablets have really led to an evolution of people’s consumption habits,” Bond said. “Doing a TV Everywhere deal in the context of these renewals is just a natural outgrowth of that change.”

Nowhere was that more evident than in the 2012 London Olympics, which have been called a “watershed” event in TV Everywhere programming. NBCU served 159.3 million video streams across all providers and digital platforms from London, compared with 75.5 million from the Beijing Olympics in 2008. Of that total, 64.4 million were live streams, 353% more than Beijing’s 14 million. For the London games, users averaged 111.4 live streaming minutes per viewer on the Web and 94.3 live streaming minutes per viewer on the app.

“The Olympics do point to the fact that strong programming can drive viewership and engagement on a TV Everywhere platform,” Bond said.

MORE DEALS TO COME

And while Bond did not want to reveal the other distribution deals remaining on NBCU’s plate, he added that he expects more deal activity this year.

Pivotal Research Group media analyst Brian Wieser said the growing acceptance of TV Everywhere is a strong motivator to get comprehensive deals like this done in advance.

“As the industry is moving towards cross-platform viewing metrics, the more that their content is available on multiple devices when a competitors’ content is not, the greater the share of viewing they will get and the greater the share of advertising they will get,” Wieser said. “ If a network’s content isn’t available in one environment, they will lose share of ad dollars.”

TAKEAWAY

NBCUniversal’s trio of wideranging distribution deals continue a bundling trend.

September