Felix Gillette with a deep-dive into YouTube's new television subscription service -- the aptly named: YouTube TV. First on the current state of these new bundles:
These TV-lite packages offer many of the same enticements (they’re low-cost and mobile-friendly) now being touted by YouTube, yet none has gotten off to a particularly strong start. Sling TV, which launched in February 2015, recently topped 1 million subscribers, less than 1 percent of the 120 million U.S. households that currently have some form of TV. PlayStation Vue, which entered the market shortly after Sling, has attracted upward of 100,000 customers. In January, AT&T revealed that DirecTV Now drew about 200,000 customers during its first month of operation.
Yes, those numbers are very, very small. For now. YouTube's offering, at least on paper, sounds like perhaps the most compelling yet -- especially thanks to the unlimited cloud DVR. But trade-offs remain:
There are plenty of gaps in the lineup. Subscribers won’t be able to watch anything from Viacom (Comedy Central, MTV), Discovery Communications, AMC Networks, A+E Networks (History, A&E), or Turner Broadcasting (CNN, TBS, TNT), to name a few. Replicating the entire cable-TV bundle would have been too costly, says Wojcicki. Instead, her team targeted a selection of channels that would deliver the essential elements—particularly live sports. Through the deals with Fox, CBS, NBC, and ABC (whose parent company, Disney, owns ESPN), YouTube TV subscribers will be able to watch pro and college football, basketball, soccer, baseball, hockey, tennis, and golf. “We’ve designed the service to be great for sports lovers,” she says.
Nabbing CBS is awesome. The current guys (Sling, DirecTV Now, etc) don't have them -- but undoubtedly will cut similar deals. But as many have pointed out, sports without TNT means not a lot of basketball, likely during the time you're going to want to be watching a lot of basketball (this will probably launch around the time of the NBA playoffs). Yet, hope remains:
The selection will likely grow and evolve. Additional tiers of programming—catering to fans of comedy, say, or European soccer—could eventually be added and subscribed to for an extra monthly fee. “The mix in a couple years will be the result of lots of learning, lots of testing,” says Robert Kyncl, YouTube’s chief business officer.
And more content will indeed be coming, because YouTube (and the others are paying a premium):
And a wildly rich friend at that. The largest TV networks stand to benefit from YouTube TV and its rival services in part because, to gain entry to the market, the deep-pocketed newcomers are likely coughing up significantly more per subscriber than established distributors.
“We are really open to being in business with anybody as long as they pay us fairly and appropriately for our content,” says Leslie Moonves, chairman and CEO of CBS Corp. “The YouTube people were terrific to deal with. They have a very young constituency, which is something we’re always trying to reach. They are very attuned with what we do and what our needs are.” Moonves declined to say how much YouTube is paying CBS but called it “a very fair deal for both parties.”
So, a very fair deal for CBS.
Likewise, native YouTube programmers say they’re salivating over the dawn of YouTube TV, which will put their shows on equal footing with the big TV brands. “The idea that our series and movies could be on a slate of programming with all this other quality content from major TV networks is really appealing to us,” says Burnie Burns, who co-founded Rooster Teeth Productions LLC, a webcentric company in Austin.
Technical chops and CBS aside, this is the most compelling part of this offering: it drastically elevates YouTube content. It may not get quite the same billing as the traditional television channels, at least at first, but it will all be there. As will the traditional television advertisers...Read more...