The YouTube has announced the launch of a paid Internet-TV: a package of more than 40 channels will be available in the US a few months for $35 per month.
New service – YouTube TV – channels include major American broadcasters (ABC, CBS, NBC and Fox) and the well-known cable channels (ESPN, FX, USA, MSNBC and Fox News), said in a statement.
According to The Wall Street Journal, the Corporation is Google Inc., which owns YouTube, belatedly joins a wide range of companies offering limited packages of basic channels to attract millions of Americans who have decided to abandon the traditional television.
These consumers are divided into two main groups: older people cancelling subscriptions to traditional pay-TV, and young people who have never paid for such services. According to industry representatives, not less than 10 million American homes that only have broadband Internet access without connecting a TV antenna or cable .
“There is no doubt that Millennials love great television content. But what we see: they don’t want to watch it in a traditional setting,” – said the head of YouTube Susan Wolitski.
In the market of Internet TV USA presented as units of traditional operators (Sling TV from Dish Network Corp. Direct TV and Now AT&T) and new players, including PlayStation Vue Sony Hulu. In addition, talks with media companies about creating such a service leads Amazon.com Inc.
For similar holdings limited packages are a kind of insurance in the context of weakening demand for traditional suggestions. Currently the package does not include YouTube channels owned by Viacom Inc. (including Comedy Central and MTV), Time Warner Inc. (including CNN, TNT, HBO) Discovery Communications Inc., AMC Networks Inc. and Scripps Networks Interactive.
According to sources the WSJ, YouTube currently negotiating with Discovery, Viacom, Scripps and AMC on the extension of the range of available user channels.
For Alphabet and owned by Google, a new service – the possibility to increase the share of revenue received from YouTube. According to research firm StatCounter, the search engine Google handles 93% queries in the USA. According to Strategy Analytics estimates Google’s Android operating system installed on 88% of smartphones in the world. The main source of income for them is a huge advertising business – 88% of the $90 billion revenue Alphabet in 2016.
And pay TV is another way to gain a foothold in the advertising market, this time on television. According to analyst Michael Nathanson, $35 per month – “a very aggressive price tag” with a YouTube premium content that will cost Google about $30. If the number of channels increase, it is unlikely that the company will be able to capitalize on one subscription. However, access to television advertising may become a significant new source of revenue for Google and Google, since U.S. companies spend about $70 billion a year.
Every subscription on YouTube TV for up to six accounts with separate user names, but viewing is available for up to three users.
While YouTube does not specify which regions will get access to the new service in the first place, but reports that it has signed contracts with local television stations in new York, Los Angeles, Chicago and Philadelphia.