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.

YouTube TV rockets to top of vMVPD list in 2017

YouTube has been spending big to promote its vMVPD service. According to the latest data from TiVo, the service was used by 9% of consumers in Q4 2017. That would make it more than twice as big as its biggest rival.

YouTube TV ad blitz working

YouTube TV has been on an ad blitz for the last several months. The service was a very visible sponsor of Baseball’s World Series, spent big on other TV ad campaigns, and is doing more of the same this year. It is also advertising extensively to regular YouTube users. According to TiVo’s new Q4 2017 Video Trends Report data, the marketing spending is paying off.

TiVo added YouTube TV to the quarterly survey for the first time in Q4 2017. An amazing 9% say they use the service. The next nearest service, DirectTV Now, has less than half of YouTube TV’s total, and Sling TV has less than a third. We should perhaps treat the YouTube TV number cautiously. It is possible some survey respondents confused YouTube TV with YouTube on TV. That said, even if YouTube TV has just half the number of users as TiVo indicates, it is still the new category leader.

The TiVo numbers suggest the size of the vMVPD market could be much larger than the 4.5 million estimated. Dish Network reports that Sling TV has 2.2 million subscribers. YouTube TV could already have more than 4 million subscribers, and it could also mean the total number of vMVPD subscribers is almost double the previous estimates.

SVOD continues its inexorable advance

TiVo’s data says that SVOD continues to grow in all dimensions. 68% say they use an SVOD service, up more than 4% over the previous year. Netflix continues to dominate, with 55% saying they use the service. 26% use Amazon Prime Video, 17% use Hulu, and 6% use HBO NOW.

Spending on SVOD services increased strongly. The number of people spending more than $15 a month increased from 27% in Q4 2016 to 35% one year later. However, it could be vMVPDs that are driving this number, rather than people subscribing to multiple SVOD services. Only one vMVPD, Sling TV, has a tier below $21 a month. The rest charge $35 or more per month. The increase in the number of people spending over $21 a month was 9%, with 7% paying over $30.

Time spent with the services also increased. 93% of people that subscribe to SVOD services say they use the service every day, 3% higher than two years ago. As well, the number of people that say they use their service for less than 1 hour a month decreased 10%, to 12%. Meanwhile, those using their service for 2 hours a day or more increased dramatically. A third say they watch their SVOD services for more than 3 hours a day, and almost a half watch from 1 to 3 hours per day.

TVOD continues its slow drift downwards

Transactional VOD continues to struggle in the digital era. The number of people saying they had rented or purchased a movie or show online declined slightly over the last year, to 37%. Amazon maintained and slightly extended its lead, with 18% saying they used Amazon’s video store in Q4 2017. Redbox kiosk users fell slightly to 13%. Apple also lost a little ground to Amazon, with only 8% of saying they used iTunes in Q4. Google Play looks as though it may overhaul iTunes this year. It gained slightly more users and is only a little behind iTunes.

read more here: www.nscreenmedia.com

How long will YouTube TV be priced at a loss?

YouTube TV reaches 50% of US population

YouTube TV announced it has launched in a further 14 markets, adding to the original five markets it previously supported. The new markets are Baltimore; Boston; Cincinnati and Columbus, Ohio; Jacksonville-Brunswick, Fla.; Las Vegas; Louisville; Memphis; Nashville; Pittsburgh; San Antonio; Seattle-Tacoma; Tampa-St. Petersburg-Sarasota; and West Palm Beach-Ft. Pierce, Fla.

The company says it will launch in further 17 markets in the coming weeks. With a total of 36 major metropolitan markets covered, its reach will increase 64% of the population.


New broadcaster affiliate agreements benefit YouTube TV

YouTube TV’s progress is remarkable considering the company promised it would not launch in any market that it could not deliver the top four local broadcast channels. Previously, negotiating the appropriate licenses was a Herculean task.

A licensor would have to go market-by-market negotiating with each independent affiliate separately. Also, it would have to negotiate with big affiliate groups such as Sinclair Broadcasting and Hearst Television. Then it would have to further negotiate with the big four networks to get their owned-and-operated station.

However, YouTube is the beneficiary of a new approach by the broadcasters. ABC, CBS, Fox, and NBC have reached an agreement with many of their affiliates to negotiate a deal on their behalf with licensors such as YouTube TV. Stations can opt-out of these agreements if they like, but looking at YouTube TV’s rapid progress, it appears most are choosing not to.

YouTube TV is certainly making a loss

YouTube TV channel bundle cost
The lowest cost of YouTube TV’s channel bundle
Being able to get the licensing done is one thing, but getting a good deal is quite another. The best license rate that YouTube TV could have expected to get from content providers is what traditional pay TV operators currently pay. Using estimates for those numbers, the 48 channels I receive from YouTube TV in San Francisco Bay Area would cost $34 a month.

However, YouTube is likely paying more than big operators like Comcast. Bob Iger, Disney’s CEO, mentioned that the license fees he sees from vMVPDs like YouTube TV are slightly higher than for regular operators. How much more is anyone’s guess, but even a 5% premium means YouTube is paying more in license fees than it is receiving in subscriptions.

YouTube TV can probably sustain these losses while subscriber numbers remain low. However, if the service takes off, things could get very ugly for the service.

About the estimates

Many of the channel license fees I obtained from SNL Kagan estimates for 2014. I corrected these numbers by applying a 35% increase. ESPN license fees increased from $6.04 in 2014 to $7.86 this year, a 30% increase. Comcast content license fees increased 35% between Q2 2014 and Q2 2016, while Dish’ increased 80%.

I also consulted the site whatyoupayforsports.com for current estimates of the license fees paid for major sports channels. I also used other SNL Kagan estimates for retransmission fees paid to owned-and-operated and affiliates of the major four broadcasters. These numbers gave an average cost for the four broadcasters ABC, CBS, Fox, and NBC.

read more here:

http://www.nscreenmedia.com/youtube-tv-making-loss/

YouTube TV’s DVR Has a Catch

The cloud DVR that comes with YouTube TV’s new OTT TV service comes with unlimited storage, but is apparently limited when it comes to letting subscribers fast-forward through ads in recorded programs.

YouTube confirmed to The Wall Street Journal that subscribers to the new offering, now available in five markets for $35 per month, will be forced to watch commercials in some popular shows recorded to the cloud DVR – a restriction that is not present in traditional local DVRs or cloud DVR offerings from Comcast or Sling TV, the Dish Network-owned virtual MVPD service.

Due to a “tangle of contracts” YouTube has with media giants such as Disney, 21st Century Fox and NBCUniversal, if a new TV episode is available via VOD (which disables fast-forwarding for ads), customers won’t have access to a cloud DVR-recorded version that would support ad-skipping, the paper said, noting that the ad-skipping restriction doesn’t factor in if a VOD version of a show doesn’t exist.

YouTube TV makes no mention of this limitation in its FAQ about its cloud DVR, which reads:
“You can record as many programs as you want at the same time, without ever running out of storage space. We’ll even keep each recording for 9 months. Stream from your library anywhere in the U.S.”
The WSJ said this restriction appears to be a special case in part because some believe YouTube “hasn’t done enough to battle pirated content appearing on its platform.”

YouTube TV also has not detailed the architecture of its cloud DVR, and whether its special rights arrangements with some programmers means it can let multiple subscribers access the same copy for certain programs, or if its system makes individual copies of all program recording requests.

YouTube has been asked for further comment and clarification on this point.
Though it’s extremely inefficient from a storage standpoint, network and cloud-based DVR services from Comcast, Altice (in the former Cablevision System properties) and others make individual copies of all recorded programs to ensure that they stay within the bounds of copyright rules.

read more here:
http://www.multichannel.com/blog/bauminator/youtube-tv-s-cloud-dvr-has-catch/412114

YouTube TV debuts in 5 US markets

YouTube TV is especially interesting for marketers because it’s backed by Google. While Google has the power to potentially turn YouTube TV into a strong competitor given its budget, bent toward innovation and massive technology infrastructure, the company could also demand higher advertising rates as the service picks up traction.

Alphabet, Google’s parent company, has put a sharper focus on YouTube as consumers demand more video content and turn more frequently to their mobile devices to view it. On a recent Alphabet earnings call, analysts suggested that YouTube could act as a sort of heir apparent to Google’s search advertising business, which has been its key revenue driver for years.

However, Google is also currently navigating tough waters with YouTube, as major U.S. brand marketers including Verizon, AT&T and PepsiCo freeze their spend on the platform over issues with ads appearing next to offensive content, including terrorism- and hate speech-related videos. While YouTube TV is a different beast altogether, strictly streaming TV-like offerings advertisers would deem “safe,” it launches in the midst of a particularly bad PR moment, which might hurt its early legs.

Overall, digital media continues to make inroads into the territory typically owned by linear TV with skinny bundles and over-the-top (OTT) services like YouTube’s. The quickly expanding swath of digital TV-like alternatives seek to accommodate a growing trend toward cord-cutting, but it’s also possible the space is getting overcrowded before it ever truly takes off. Certainly, the sheer number of current offerings is likely to be confusing for consumers.

read more here:

http://www.marketingdive.com/news/youtube-tv-googles-bid-to-conquer-ott-debuts-in-5-markets/439880/