This week, YouTube soft launched their new streaming TV offering, YouTube TV, eyeing the growing market of cord cutters. Starting this week, YouTube TV is available in Los Angeles, San Francisco, Chicago, Philadelphia, and New York City, with 40 channels and an estimated 10 more on the way. For those thinking about trying to game the system and get in early, unfortunately the registration site does check your location to ensure you’re in a supported city.
As part of the soft launch, YouTube TV will not be natively available on TV unless you use a Google Chromecast device or Android TV. For now, the service will only be accessible through the web client or the new iOS and Android apps.
Some of the initial lineup includes ESPN, FX, Syfy, Bravo, and Fox News. You can also add on Showtime or Fox Soccer for an additional cost. Supposedly AMC and BBC America are in the works, which can already be found on competing solutions, but there is no mention of CNN.
Priced at $35 per month (with a free month trial to start), YouTube TV will go head-to-head with the two largest offerings for cord cutters: Dish’s Sling TV ($20+) and Playstation Vue ($30+). More recently, AT&T also launched DirectTV Now, another streaming TV service, and Hulu is planning to release their rendition at the end of the year.
Similar to the competition, YouTube TV also features a plethora of on-demand content, but where the service stands out is that for each subscription, six users can access it and you gain unlimited cloud DVR storage. Technically the other platforms have a majority of their content on-demand as well, which plays the same role as the DVR spin, at least for now.
Viability of Cord Cutting
“They love TV programming,” said Kelly Merryman, vice president of content partnerships at Youtube. “They just don’t love the distribution.”
With the vast amount of data available to YouTube, it should be interesting to see if they can truly target this segment and if there is a wider appeal, rather than just those who have decided to break away from the likes of Comcast. In the US, there are a reported 12.3 million homes that use over the air (OTA) broadcasts or TV using an antenna of some kind. In contrast, the largest cord cutting solution, Sling TV, reportedly only has about one million subscribers. If YouTube can in fact appeal to the OTA viewership, and combine it with revenue for advertising, there's a lot of revenue to be made. However, that is also assuming Merryman is correct in thinking this is a distribution problem and not one of cost.
During the soft roll out, it will be hard for YouTube to make good on a viable product to solve cable distribution issues (watch any time, any where). According to the YouTube TV's site, live TV will only be accessible while in those five cities, and DVR content accessible anywhere in the US. Availability to local networks such as CBS and ABC are also dependent on your zip code at the time of using the service. For the time being, the service is also not available internationally.
Big Business in Advertising
Still, between pricing and availability, YouTube TV can likely get away with the slightly higher price point purely due to their position as the largest online media platform in the US. According to YouTube, their existing platform pulls in more than a billion users per day, and also reaches more 18-34 and 18-49 year-olds than traditional cable, which in turn could make the platform even more viable for marketers and advertisers.
Details regarding advertising on the platform are still hazy at best, but for now it would appear network ads will play on regular stations, and when YouTube videos play, those creators will also gain access to the ad revenue.