Paramount Global and Google-owned YouTube have agreed to a temporary extension of a prior distribution agreement that will allow subscribers of YouTube TV to access nearly two dozen Paramount-owned cable networks and local CBS stations and affiliates.
The contract between the two companies was set to expire Thursday evening at 11 p.m. Eastern Time, and Paramount had been warning subscribers of YouTube TV of a likely blackout of their programming on the platform. A dispute would have also prevented YouTube from selling subscriptions to Paramount Plus, BET Plus and Showtime through its YouTube Primetime Channels marketplace, and from offering Paramount Plus with Showtime through its “Entertainment Plus” bundle on YouTube TV.
Neither YouTube nor Paramount revealed how long the extension will be in place. Paramount was the first to tip off the public about a possible blackout after it accused Google and YouTube of offering “one-sided terms” that contained “non-market demands.”
Distribution spats between broadcasters and pay TV companies have increased over the years as network owners demand more money on a per-subscriber basis in exchange for providing rights to cable, satellite and streaming cable-like services to resell access to their channels in their subscription packages.
Like other companies, YouTube and Google are required to pay Paramount for the right to redistribute local CBS stations and affiliates and Paramount-owned cable networks like Comedy Central, Nickelodeon and MTV on YouTube TV. The agreement also extends to the three Paramount-owned streaming services on YouTube Primetime Channels, but does not involve the distribution of out-of-market National Football League (NFL) games through the NFL Sunday Ticket package, which is negotiated between the NFL and YouTube separately.
A source familiar with the looming dispute between Paramount and YouTube downplayed the cost YouTube would incur in providing the broadcast and cable channels, saying that matter had “largely been settled.”
One issue of contention has to do with commercial advertisements that run in Paramount content distributed on YouTube and on the ad-supported plans for Paramount’s streaming services on YouTube Primetime Channels. To offset a slight per-subscriber cost increase, Google and YouTube have proposed making up the difference by allocating some ad inventory on YouTube for itself, the source said.
That offer was one of several made to keep YouTube TV’s price stable — the company recently increased the monthly cost of the service to $83 after renewing its distribution agreement with the Walt Disney Company last year.
Paramount channels are not the cheapest for a pay TV provider to carry, but they are also not among the most-expensive. Among the four biggest broadcast networks, CBS costs the least to carry, with Disney-owned ABC, Comcast-owned NBC and Fox priced higher on a per-subscriber basis.
However, YouTube TV does not carry CBS alone — it does so as a package with other Paramount-owned networks, and the aggregate price of those channels adds up. Unlike some other services, YouTube TV opts for a one-size-fits-all model, making nearly all the channels it can carry available to customers at a single price point, except for some niche sports networks like Stadium and FanDuel TV, which are relegated to a sports add-on package. Premium movie networks like HBO, Starz and Cinemax also cost extra.
By not tiering its channels the way most cable and satellite providers do, YouTube TV has little wiggle room to drop networks in order to reduce costs. The only Paramount-owned networks not carried by YouTube TV are a handful of Nickelodeon and BET-branded music channels and Logo TV. Paramount costs slightly more to carry than channel bundles from AMC Networks (which YouTube TV does carry) and A+E Networks (which it doesn’t) — but, even with its sports-inclusive channels, Paramount’s bundle is still cheaper to carry than comparable channel packages from Warner Bros Discovery (CNN, TNT, Discovery Channel, Animal Planet), Fox (Fox News, Fox Sports 1, Fox Business, Fox Weather) and Disney (ESPN, FX, National Geographic, Freeform).
If discussions between both sides break down before the expiration of its contract extension, YouTube TV has promised customers an $8 bill credit to offset the cost of the ad-supported tier of Paramount Plus, which offers live sports from CBS and on-demand replays of CBS and some Paramount cable shows. A feed of a subscriber’s local CBS station or affiliate is available in the premium version Paramount Plus with Showtime, which costs twice as much.
