YouTube is looking to expand its services, and hopefully its revenue stream, with the launch of YouTube TV sometime in 2017. YouTube TV will be a virtual multichannel video programming distributor (MVPD) that will feature 40 cable channels when it first launches. YouTube has made it clear that this will be a contract free service with millennials serving as the primary target audience.
The cord-cutting trend has continued to grow amongst the US population; making this an ideal time for a new MVPD service. MoffetNathanson’s latest Pay-TV Cord-Cutting Monitor report shows that in 2016 the US pay-TV industry lost 1.7 million subscribers; a 1.7% net loss. In 2015 the industry lost 1.1 million subscribers. While on its own, a lost of 1.7% may not be game changing, the fact that that number is higher than the 2015 loss indicates that this is the beginning of a trend. Unfortunately for cable providers, the pay-TV industry will likely continue to lose an increasing number of viewers as time goes on.
YouTube has read the writing on the wall for pay TV and is working to position itself to take advantage of the growing cord-cutting trend with this new YouTube TV service. The service is working to undercut other MVPD players, like Sling TV and DirecTV Now, by offering a very competitive price point of $35 a month for its base service.
The YouTube TV base service will include 40 cable changes and six separate accounts—each with unlimited cloud-DVR storage. Each account will also have its own set of recommendations. While six accounts are supported, only three can watch content streams simultaneously; so keep that password safe. Access to YouTube’s original content via the YouTube Red subscription service is also included in that $35 monthly fee.
YouTube TV will be available anywhere in the US, though users location will dictate which channels they have access to. For example, subscribers will have access to major national channels like ESNP and Fox News anywhere, but live local broadcast networks will not be available in certain areas. YouTube TV will be compatible with most chromecast devices at launch. The company has promised to expand its supported devices list in the near future.
The MVPD market is more crowded than it has ever been with names like DirecTV Now, Sling TV and Playstation Vue dominating the market. So far, it seems as though YouTube TV will have a rather limited content offering compared with its competitors. However, YouTube TV’s extremely low price point may be the boost it needs to become successful. Look for YouTube TV to hit the market sometime this year.
Sources:
http://www.multichannel.com/news/distribution/youtube-makes-virtual-mvpd-play/411208
