Another day, another skinny bundle launch. Yesterday, YouTube took the wraps off its long-rumored skinny bundle, dubbed YouTube TV, which will debut in unspecified select markets in the coming months. YouTube TV has all the usual skinny bundle characteristics - low price ($35/month), many broadcast and cable TV networks included, but many missing as well (e.g. Viacom, Discovery, AMC, Turner, Scripps, A+E, etc.), and some updated web-like features (unlimited cloud DVR, recommendations powered by Google, UI that integrates YouTube content, etc.).

Fundamentally, YouTube TV’s value proposition to its target market of millennial viewers is the same as other skinny bundles: for a lower monthly price than a typical pay-TV multichannel bundle, you’ll still get access to a lot of great TV, available on all devices.

Unlike other skinny bundles, YouTube TV has a few advantages. First, the ubiquitous YouTube brand and massive active user base means tons of low-cost promotional opportunities that will help YouTube TV drive a lot of trial users. Second, YouTube’s gigantic library gives YouTube TV a lot of content it can populate in search results and recommendations that will make the service seem more fulsome to users. Third, the concept of an unlimited DVR is a clear differentiator vs. all other providers’ finite models.

In addition, from a content perspective offering all 4 of the broadcast TV networks, which are still the most widely viewed, is a positive (although note that receiving all 4 will only be possible initially in major markets where the networks all own their own local channels. In other markets, YouTube will have to make deals with local station owners, just like everyone else). YouTube TV also seems to be emphasizing sports by highlighting deals with regional sports networks (RSNs), which have been a relative weak spot for other skinny bundles.

Despite these advantages, YouTube TV will bump up against the same challenges that competitors have. First and foremost is the “Swiss cheese” content problem, namely the absence of many valuable cable TV networks. Search in YouTube TV may yield tons of great YouTube content, but when a user asks for “The Walking Dead” (on AMC), NBA basketball (on TNT), “The Daily Show with Trevor Noah” (on Comedy Central), “Naked and Afraid XL” (on Discovery) or “60 Days In” (on A+E) and nothing but a bunch of related clips show up, there’s bound to be disappointment.

This is of course the core problem with all skinny bundles: by trying to keep the monthly price low, inevitably there are lots of cable TV networks that won’t be make the cut. Each missing network translates to a viewer who will decide a skinny bundle - no matter how low the price - is not right for them. To illustrate the bind YouTube TV is in, MoffettNathanson estimates YouTube TV’s lineup costs the company $34/month, leaving just $1 to cover all other costs and make a profit (which obviously YouTube TV, like AT&T’s DirecTV Now won’t be doing immediately, if ever, though that's not a problem for cash-rich Google).

The Swiss cheese problem is greatly exacerbated when there are multiple people in a household. As research from Altman Vilandrie & Co. found last fall, every single one of a 150 networks tested were deemed valuable by at least 5% of respondents. Further, men and women don’t agree on what networks are must-haves, with just 1/3 of their respective top 30 in common. It’s great that YouTube TV will offer the ability to create 6 different user profiles, but behind each one of those is likely to be a viewer who is frustrated by the number of their favorite TV programs they don’t have access to.

Due to YouTube’s sheer size and ability to promote, YouTube TV is bound to gain a following. But, it’s still far from clear how big the skinny bundle universe actually is and with so many options already available and more still coming, the whole universe will be divided among many providers. Lurking behind all of this remains the overriding question: do SVOD-loving millennials even want to spend extra money on a conventional, albeit skinnier, TV service that’s still loaded with ads? As 2017 progresses, YouTube TV and others will find out.