Posts for 'YouTube TV'

LRG estimates that YouTube TV added 600K subscribers in Q3 ’23, bringing it to a total of 6.5 million subscribers. YouTube TV’s growth is by far the strongest of all pay-TV providers, double the growth of Hulu + Live TV and Fubo, with all traditional providers losing subscribers in Q3.

On this week’s podcast we discuss what’s behind YouTube TV’s growth, and also how sports TV continues to be in flux.

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This week on Inside the Stream Colin and I do an “around the horn” of four significant industry topics. We lead off with the expected bankruptcy filing of Diamond Sports Group earlier this week, the largest owner of regional sports networks (RSNs), resulting in a complete wipeout of the equity-holders. Where to from here is anyone’s best guess; but I reiterate my stance that sports teams’ franchise values and players’ salaries have already peaked. When the dominant player in an industry - with over 50% market share - goes belly up, nothing good happens next.

Next up is an update on WBD’s planned pricing strategy for its combined HBO Max and discovery+ streaming service launching soon. Colin’s been all over this one for months and is really scratching his head, as am I.

In time for March Madness, YouTube TV has launched a new feature called “multiview” allowing subscribers to stream a mosaic of four pre-selected games and choose which audio feed they prefer. I think it’s really cool, and as you’ll hear in real-time I realize that it might mean YouTube TV “automagically” just quadrupled its ad inventory for multiview users. If so, that’s a neat trick; new CEO Neal Mohan is off to an even stronger start than I expected!

Finally, Colin gives a short wrap-up of the latest doings in the burgeoning FAST market. It’s getting harder and harder to keep up.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Rather than focus on just one story this week as we usually do, today we do segments on 5 different stories that caught our attention. First we pick up on last week’s podcast about the dustup between YouTube TV and NBCUniversal. The companies avoided going over the cliff together and managed to extend their relationship. But it is a harbinger of more fights between networks and virtual (and traditional) pay-TV operators as the size of the pie continues to shrink due to cord-cutting.

Then Colin and I have a spirited debate about Google’s Fiber TV, which is being retired, and the broader question of whether Google Fiber’s 1 gigabit per second broadband service is a worthwhile product offering (Colin thinks it is and I think it isn’t, and I haven’t since it launched way back in February, 2010, see “Google’s Fiber-to-the-Home Experiment Could Cost $750 Million or More.” Also see "Google Fiber is Out of Synch With Realities of Typical Consumer Technology Adoption" from July, 2012 and "No Surprise, Google Fiber is Falling Short of Expectations" from August, 2016.)

From there we discuss the steep drop in L7 TV ratings that has continued in the first week of this Fall season. But even at these depressed levels, I assert that the most popular broadcast TV shows like “NCIS” still draw audiences that may likely be bigger than the first 7 days following the drop of a popular show on a big SVOD service like Netflix. Related, we discuss new Kantar data on SVOD churn in Q2. For more insight, have a look at my post from November, 2019, “Will Spinning Video Subscriptions Become a Thing?”

Finally, there’s a game of musical chairs happening in our industry and this week’s move by Kelly Campbell from president of Hulu to president of Peacock is just the latest example. We discuss why these executives’ shuffling matters to all of us as consumers.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

YouTube TV and NBCUniversal have become embroiled in a highly public dispute about the details of their distribution agreement. On today’s episode, Colin and Will discuss what’s really behind the dispute and the larger industry shifts that impacting the negotiation.

It is a very complicated situation as each company is trying to hold on to certain industry conventions (such as most favored nation pricing), while also broadening into new areas (such as including Peacock Premium, a streaming service, with underlying YouTube TV subscriptions). Each company also comes to the table with a host of business imperatives, with many driven by Wall Street’s expectations and the overall streaming market’s evolution.

Colin and I try to break things down. As I mention, one significant factor weighing on my assessment of things is Comcast’s gigantic missed opportunity when it decided not to acquire the 70% of Hulu it didn’t already own, back in 2018 when Comcast and Disney were battling over control of Fox (see "Why Comcast Should Take Control of Hulu" from May, 2018). Comcast had a one-time opportunity to vastly expand its footprint in streaming and CTV advertising and likely to position a combined Hulu-Peacock entity for eventual spin-off (see "Quick Math Shows Comcast Missed Out on Almost $6 Billion in Annual Revenue by Not Buying the Rest of Hulu" from January, 2020).

Instead Comcast passed and became a passive owner in Hulu. Comcast will eventually realize a nice return on this stake, but Comcast needs strategic assets for the streaming era far more than it needs additional cash.

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Yesterday YouTube TV announced a new add-on feature called 4K Plus, which includes the ability to download recorded DVR programming to mobile devices for subsequent offline viewing. Diehard VideoNuze readers know that since October, 2012, when I wrote “TiVo Stream’s Downloading Feature is a Bona Fide Killer App” I have been an unabashed proponent of downloading/offline viewing.

As I wrote then, downloading offers multiple benefits to users, and to the services offering the feature. Though mobile connectivity is far better today than 9 years ago, there are still plenty of times when a cost-effective, high-quality Internet connection isn’t available (e.g. planes, trains, rural driving, etc.). At those moments, if you want to watch video, you’re out of luck. Downloading enables viewers to be untethered from the Internet and yet still have access to their DVR library.

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More than 120 million U.S. viewers streamed YouTube or YouTube TV on a connected TV last December, according to a blog post yesterday from Neal Mohan, YouTube’s Chief Product Officer. That’s up from 100 million per month that YouTube last revealed in June, 2020 at its Brandcast presentation during the NewFronts. Mohan reiterated that while mobile is still the most popular way to consume YouTube content, CTV is the fastest-growing.

Mohan also said that in December over 25% of logged-in YouTube CTV viewers in the U.S. watched over 90% of their YouTube content on CTV.  Mohan quoted comScore data that 41% of all ad-supported streaming watch time occurs on YouTube, which makes YouTube by far the biggest CTV player.

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The U.S. pay-TV business performed better than expected in Q3 ’20, with top providers “only” losing around 120K subscribers, according to data compiled by Leichtman Research Group. The results would have been even stronger if a portion of YouTube TV’s one million subscriber additions in 2020 are attributed to Q3 specifically.

Google didn’t break out how many of YouTube TV’s additions came in Q3, but given the return of major sports during the quarter, it’s probably fair to assume at least 500K-600K. Add those to Hulu + Live TV’s 700K additions in Q3 and just these two virtual pay-TV providers may have accounted for 1.2 to 1.3 million additions.  That would be enough to more than offset the approximately 1.15 million subscriber losses that the largest cable, satellite and telco pay-TV providers incurred.

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Alphabet announced strong Q3 ’20 results last week, which included several YouTube metrics: $5 billion in quarterly revenue (up 32% vs. a year ago), 30 million music and premium paid subscribers, and 3 million paid YouTube TV subscribers. For YouTube TV, that’s a  jump of 50% from the 2 million subscriber level that Alphabet reported earlier this year in February.

That’s surprisingly growth from my perspective for a number of reasons. First, YouTube TV raised its rate to $65 per month in June, an aggressive 30% hike from $50 per month. The primary justification YouTube TV offered for the increase was the addition of 8 ViacomCBS cable TV networks, BET, CMT, Comedy Central, MTV, Nickelodeon, Paramount Network, TV Land and VH1. But of the group, only Nickelodeon was among the top 25 most viewed networks in 2019 and it was number 25.

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I’m pleased to present the 522nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. For all our listeners especially in states seeing a spike in Covid, we hope you’re staying safe.

There were several examples this week of how linear TV is continuing to adapt in the OTT/CTV era which Colin and I discuss. Top on the list is Comcast’s decision to offer the Sling TV app for its Xfinity Flex broadband-only users. Comcast has been adding broadband subscribers and losing video subscribers for a while and the move seems to signal Comcast wants to enhance the competitiveness of Flex, giving cord-cutters an inexpensive option to rejoin the pay-TV world.

The bar for Flex is getting higher partly due to Fire TV which this week unveiled content discovery integrations with YouTube TV, Hulu with Live TV and Sling TV. The integrations make accessing linear TV seamless within one UI, and will drive virtual pay-TV subscriptions within the Fire TV base.

Listen in to learn more about how linear and “virtual linear” TV are adapting to find viewers!
 
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I’m pleased to present the 521st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. Colin and I wish all of our listeners a safe and healthy July 4th weekend.

YouTube TV raised its price 30% this week, from $50 per month to $65 per month. On today’s podcast Colin and I explore what’s behind the increase and what its likely impact will be.

From my standpoint, the increase says a lot about how bullish Google now is about using YouTube itself to reach coveted TV ad buyers. That’s due not only to YouTube’s improving content quality but to the adoption of connected TVs as a primary way to consume YouTube content. This dynamic makes YouTube TV less strategic for Google, and therefore diminishes its willingness to subsidize monthly losses.

Meanwhile Colin sees YouTube TV falling into the “big bundle” trap of adding more networks and continually raising rates, that has led to record cord-cutting among traditional providers.

Listen in to learn more!

(As a side note, Colin is participating in an interesting webinar next week on pay-TV providers can help SVOD and AVOD services to succeed. Free registration)
 
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Yesterday YouTube TV raised its monthly rate by 30% from $50 to $65. It’s the fourth rate hike in just the past 2 years, as YouTube TV moved from its introductory rate of $35 to $40 to $50 to the new $65 per month. As recently as March, 2018 it was still possible to sign up for $35 per month and be grandfathered into that rate for a short period.

I’ve been a mostly satisfied YouTube TV subscriber since the early days, and of course, the rate increases have been painful to absorb. The fundamentals of YouTube TV as a pay-TV alternative that were appealing from day one have changed little - strong cross-platform access, unlimited DVR, 6 concurrent users, etc. What has changed is the growth in number of TV networks carried; indeed yesterday’s rate hike was tied to the launch of a group of ViacomCBS networks, just as the previous hike was tied to the addition of Discovery networks.

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There are so many dramas playing out in the TV/video business these days it’s hard to keep up. Cord-cutting, M&A, reorganizations, high-profile executive departures, product launches, discounted pricing, eye-popping A-lister salaries….the list goes on and on.

But one particularly intriguing drama that’s been catching my eye lately revolves around YouTube TV and the YES Network. As with everything in the TV/video business, the background is complicated, so here’s the high level cheat sheet:

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Finally, finally, finally, Google provided some transparency about YouTube’s financial condition, in its Q4 ’19 and full year 2019 earnings report yesterday. YouTube’s financials have been treated as a state secret by Google since the beginning of time, with only high level usage information periodically shared.

Even yesterday’s reveal was only for YT’s advertising revenue, which came in at $4.7 billion for Q4 ’19 and $15.1 billion for the year. YT’s subscription revenues - which consist of YT Music, YT Premium includes YT Music) and YT TV (its virtual pay-TV service) - were buried in “Google other revenue.” On the earnings call, CEO Sundar Pichai said all YT subscriptions had a $3 billion annual run rate at the end of 2019.  

Using some conservative assumptions and relatively quick math, it’s clear that YT’s total revenue could exceed $25 billion in 2020. As I also detail below, YT has to be considered among the best acquisitions in corporate America’s history. For Google, only the acquisition of Android (for the measly price of $50 million) could be considered more successful.

Here are my calculations:

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On Tuesday PBS announced that over 100 of its member stations, covering 75% of U.S. households, have been activated for live streaming on YouTube TV. Previous to the launch PBS content was available across many devices through its own apps and the web. Incorporating the stations’ live feeds directly into YouTube TV means that users can seamlessly access them alongside other channels, use YouTube TV’s unlimited DVR feature to record PBS programs/watch later, etc.

It’s a smart move by both PBS and YouTube TV. PBS viewers skew older, and are therefore more likely to retain traditional pay-TV services, which have always carried PBS stations. But younger audiences are more likely to be cord-cutters or cord-nevers, relying instead on CTVs, mobile devices and OTT services. By not being a part of a virtual pay-TV operator, PBS’s exposure to critical younger audiences was being limited.

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I'm pleased to present the 462nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Colin and I both shed a tear this week as YouTube TV raised its rate to $50/month (up $10 for those currently paying $40/month and up $15 for those like Colin and me who were grandfathered at the original $35/month price - a whopping 43% increase).

While Colin says he wasn’t surprised, I actually was. There’s been a huge window for YouTube TV to grab market share as other virtual pay-TV operators raised their rates and/or scaled back promotions. But Google has obviously decided it was done heavily subsidizing YouTube TV. Colin and I discuss the implications of the move and how the “new normal” in virtual operators’ rates will likely reduce cord-cutting.

Then we switch gears with Colin sharing his takeaways from NABShow - focusing on AI, cloud and live.

Listen in to learn more!

 
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Last week Charter, the second-largest U.S. cable TV operator, announced plans to launch “Spectrum TV Essentials,” a $15/month package of 60+ entertainment channels. According to Charter’s press release, Spectrum TV Essentials will be “made available exclusively in Charter’s footprint to Spectrum Internet customers who don’t already subscribe to Spectrum video services.” This means targeting broadband-only subscribers who have either cut the cord or never subscribed. It’s unclear how Charter will handle a prospect looking to downgrade from an existing multichannel TV bundle to Charter’s new skinny bundle (or “virtual pay-TV service,” as these bundles are often called).

Regardless, the way Spectrum TV Essentials is currently constructed/priced it is likely to have relatively narrow appeal and limited long-term value. It can be compared most to Philo TV, another inexpensive entertainment-only service. Charter has agreements with Viacom, Discovery, A&E, AMC and Hallmark to carry their networks, but NOT CBS, Disney, Fox, NBCUniversal or Turner, at least currently. So a ton of popular TV networks/programs will be missing, raising, once again the “Swiss cheese” problem of inexpensive skinny bundles that have too many holes in their programming lineups to have broad appeal. Such is the nature of striving to keep subscriber rates low; many expensive networks must be excluded.

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Over the past two days Alphabet released strong Q4 ’18 results and YouTube’s CEO Susan Wojcicki posted her annual letter to its creator community. There was plenty to learn from both, but one thing persisted for yet another quarter - YouTube TV’s performance remained shrouded in mystery. Since its initial launch nearly two years ago, in April, 2017, Alphabet and YouTube executives have been incredibly disciplined about not uttering a word (as best I know) about YouTube TV’s total subscribers, quarterly additions, profitability (or lack thereof) or product roadmap.

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Perhaps the most noteworthy thing about Netflix’s solid Q4 subscriber growth was the company’s ongoing success with a pure ad-free subscription model. Netflix is becoming even more unicorn’ish among big video providers in completely eschewing ads. Virtually every other major video provider (aside from established premium TV networks like HBO, Showtime, etc.) is reliant, at least in part, on advertising (Amazon’s ad-free approach gets an asterisk because of the outsized role Prime/free-shipping still plays - and even Amazon is now integrating ads in various ways, see below).

In fact, though we’re barely a month into 2019, there are signs everywhere of advertising’s growing role in the future of the video industry.

Consider just the following:

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I’m pleased to present the 448th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Continuing our tradition for our final podcast of the year, this week Colin and I discuss the top 10 video stories of 2018 - at least in our humble opinions. Once again it has been a very active 12 months, with lots of innovation and change. Colin and I have had a great time analyzing and discussing the critical industry trends each week and we hope you’ve enjoyed listening to our thoughts in 2018.

Let us know what you think of our choices, whether you agree or disagree!

Listen in to learn more!

 
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Pay-TV operators took a drubbing in Q3 ’18 as the boost the industry has gotten from consumers migrating to virtual MVPDs or “skinny bundles” mostly evaporated. According to Leichtman Research Group, the industry as a whole lost about 975K traditional subscribers (its worst ever). Subtracting estimated gains for skinny bundles the Q3 loss would have topped a million.

Going back just one quarter to Q2 ’18, the industry as a whole (both traditional pay-TV and skinny bundles) may have actually eked out a net subscriber gain, as traditional subscribers “cord-shifted” to skinny bundles. But in Q3 that short trend came to screeching halt, as both DirecTV Now and Sling TV additions slid dramatically. In Q3 ’18 the services combined to add just 75K subscribers, down from 536K a year earlier (and that’s on top of escalating subscriber losses at the core satellite services). It’s not clear how other skinny bundles performed in Q3 as they don’t publicly report their numbers.

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