YouTube TV seeks Digital Publishers

YouTube’s $40-a-month live TV streaming service, YouTube TV, reportedly wants to add channels from digital-native publishers like Cheddar, Tastemade, and The Young Turks (TYT) Network to its package of network offerings, Digiday reports. The skinny bundle service is now testing up to six new channels from such publishers.

YouTube deployed the service last year amid a wave of launches of similar services, known as vMVPDs (or virtual multichannel video programming distributor) or “skinny bundles,” that offer a smaller package of networks than the traditional pay-TV bundle, for less money.

Adding popular digital-native publishers to its package could give YouTube TV greater cachet and potential uptake among young viewers, while further legitimizing these publishers by opening them up to broader, more linear-based viewership — and bigger advertisers — as vMVPD subscribers more often watch through connected devices on TV screens.

By adding live streams from digital-native publishers, YouTube TV could differentiate its service in a way that rivals haven’t. Despite the many skinny bundles out there, none are markedly different from the others. Moreover, vMVPDs are arguably not only offering nearly identical services among themselves, but they are also practically identical to the traditional bundle, aside from being cheaper and delivered over-the-top (OTT). YouTube TV could therefore stand to gain subscribers, particularly millennials, who are likely to be more familiar with digital-first publishers and to want their video product as a viewing option.

Meanwhile, digital publishers are seeking revenue diversification, as Facebook proves to be an increasingly unreliable partner, as Adweek recently reported.Earlier this year, Facebook de-prioritized publisher content in News Feed, which has long driven significant traffic to publishers’ sites. Additionally, publishers that have agreed to produce content for Facebook Watch aren’t relying on those partnership deals — which typically run a year — as a long-term revenue source, per Digiday. This means these publishers are in search of new distributors, which YouTube TV could provide.

Digital publishers may also be enticed by YouTube’s strong reputation as a video destination, as well as its historically consistent monetization model, with 55% of ad revenue going to publishers. vMVPD players have structured deals with networks similarly to traditional ones with cable companies, wherein the distributor pays a carriage fee on a per-subscriber-per-month basis. In the case of these six digital publishers, YouTube isn’t paying a carriage fee yet, but will implement an ad share model, with both YouTube and publishers selling inventory.

Monetizing Video Puts More Food on the Table for Publishers

The table is set for publishers to derive new revenue from popular content formats and now it’s time to sit down and eat. What’s for dinner? Video. Why now? What has changed? Three trends are converging that make video content a potent opportunity: One, video content is quickly growing in popularity with consumers; two, consumers are buying more products online than ever before; and three, consumers are ready to buy on whatever platform or site that is accessible to them. This represents an immensely profitable new revenue stream for the video publishers and their affiliate networks, and here are three key ways it can happen.

Set The Table And Incorporate More Video

If publishers want to get ahead, they need to understand what a video is worth and ultimately, use more of it. According to Cisco, 69% of all IP traffic will be video in 2017, growing to 80 percent by 2019. Another study from Aberdeen research says that sites with video garner an average 4.8 percent conversion rate versus 2.9 percent for sites that do not. It’s clear that consumers like the “snackable” content that’s easy to consume, because it’s simply more engaging than static content. Look at BuzzFeed’s Tasty videos that recently hit 1 billion views this year, as an example. Simply giving people a visual walkthrough of how to make a recipe has inspired even the most basic cookers to create a delicious dinner.

Video has become invaluable, and particularly interactive and shoppable videos, because they provide a more immediate and real-world experience for shoppers. Videos have a storytelling aspect to them that make its content more desirable, so when you connect the story that these videos create with sophisticated search tools that are now available- like visual recognition search — products that are featured within videos are easily found, and therefore more easily purchased. This is where artificial intelligence has played a huge role in the video industry, because it’s allowed retailers to become more searchable, and publishers to monetize content that users would prefer to consume. Merging these machine learning capabilities with the browsing experience is bringing a whole new world of opportunity for publishers and retailers, and it’s still only the beginning.

Understand New Buying Habits and Ways To Reach Consumers

Not only are more Americans shopping online today, but they are buying a greater range of products across a wide range of channels. So in order to get the right products in front of the right sets of eyes, publishers and retailers need to understand audiences and work together to deliver a great browsing experience with relevant, interesting, and entertaining videos.

The opportunity is bigger than simply selling pre, mid, and post-roll ads against videos, because they can be monetized in myriad ways across these various platforms from social to onsite. Business Insider is one of the more recent publishers using video to drive commerce by leveraging Facebook video to increase reach and ultimately, sales. These video strategies generate a LOT of data that can help publishers better understand their audience and can be made available as a value-add to retailers. They can also provide incremental revenue for publishers that can offer formats like in-video advertising and in-video purchasing to their advertisers.

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