At an event in Los Angeles this afternoon, YouTube announced its own streaming TV service. The offering will mix live-streams of broadcast and cable television programming with the wealth of online video found on YouTube. It's the latest in a surge of over-the-top (OTT) services trying to woo consumers who never bought into traditional cable television.
For $35 a month, subscribers get all four major networks - ABC, CBS, FOX, and NBC - and around 30 of the biggest cable channels. That price covers six accounts, so each member of the household can have a personalized account that offers recommendations tuned to their taste.
Sadly, like many other streaming bundles, it has gaps. YouTube TV, as it's called, will be missing channels from Viacom, including big names like Comedy Central and MTV. It also won't have programming from Turner Broadcasting, meaning you won't be able to get CNN, TBS, and TNT. AMC Networks, Discovery Communications, and A+E Networks are also missing as of the launch announcement.
The last few years have seen a major shift in the advertising industry, with billions of dollars that once flowed into television commercials being shifted to the world of online video. YouTube has been among the biggest winners of this transformation, which is being driven in part by viewers who increasingly opt away from broadcast television networks and expensive cable packages. About 40 percent of millennial households rely on just an internet connection for entertainment.
Increasingly, the audience is online
Connected TV viewing grew by 65 percent last year, according to a study from Pivotal Research. And for some prime-time television programming, between 30 and 40 percent of the total views are now coming from connected TVs. Advertisers are eager to get into OTT, because it promises the quality and engagement of television with the enhanced targeting of digital.
YouTube revealed yesterday that users now watch a billion hours of video on its platform each day, quickly closing in on the volume of television consumed by all Americans each day. If YouTube's new service can make its videos front and center on the biggest screen in the house, it can start to command a higher price for its ads. In exchange, YouTube's new partners from the world of traditional TV partners can make use of its machine learning technology to improve recommendations and get users hooked on new shows.
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