Alphabet Inc. (NASDAQ:GOOGC), Google parent, owner of YouTube is all set to launch the latest entry in the web-TV universe. It will be called YouTube TV, offer a package of more than 40 broadcast and cable channels and cost $35 per month.
The service will be available in the next few months in select markets, eventually becoming available all over the U.S. YouTube has not announced which markets will be first to have the service but did say it has partnerships with local TV stations in New York, Los Angeles, Chicago and Philadelphia.
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Who’s In And Who’s Out
The good news: YouTube TV will have all the major networks, The Walt Disney Co.’s (NYSE:DISC) ABC, CBS Corp. (NYSE:CBSC), Comcast’s Stock not found NBC and Fox. It will also feature several popular cable channels such as ESPN, FX, USA, MSNBC and 21st Century Fox’s (TSX:FOXAC) Fox News.
The not so good news: Comedy Central and MTV from Viacom Inc. (TSX:VIAC) are not included. Neither are CNN, TNT or HBO from Time Warner Inc. (:TWXN/A), nor Discovery Communications Inc. (NASDAQ:DISCAC) Discovery Network, AMC Networks Inc. (NASDAQ:AMCXC) or the Food Network owned by Scripps Networks Interactive (:SNIN/A).
Some, including Discovery, Viacom, AMC and Scripps are in talks with YouTube and may be added later. If YouTube chief business officer, Robert Kyncl has anything to say about it, adding these additional partners will not result in a price increase.
Plenty Of Competition
YouTube’s entry, like that of AT&T Inc.’s (NYSE:TB) DirecTV Now, comes after others including DISH Network Corp.’s (NASDAQ:DISHC) Sling TV. Other new entries are Sony Corp.’s (NYSE:SNEC) PlayStation Vue and Time Warner’s Hulu. Hulu has plans to launch a streaming skinny bundle for $40 per month soon. And then there’s Amazon.com Inc. (NASDAQ:AMZNC), which has made noise about its own streaming bundle for some time.
The problem for most streaming offerings is finding a balance between price and bundle size. Simply put, customers want a lot of variety but don’t want to pay very much. This involves a lot of fancy footwork by bundle creators to secure rights at a reasonable price.
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Icing On YouTube TV’s Cake
YouTube’s secret weapon in the upcoming streaming wars may be the YouTube platform itself. Without streaming commercial television, YouTube has gained viewers at a steady clip and, according to some experts, could eventually overtake television as the preferred platform for entertainment.
The Wall Street Journal noted that YouTube has seen a 10-fold increase in viewership over the past 5 years – again without YouTube TV included. According to Nielsen, viewers watch about 1.25 billion hours of TV every day but the number is declining YoY. It may be only a matter of time.