Were you surprised at this announcement? If you are one of the early adopters of YouTube TV, which seemed like a good thing, then you are probably a Millennial or younger. This is the standard faire for almost every entertainment medium — throw in the hook and then reel ‘em in after they make the choice a committed part of their lifestyle.
Does Google actually believe the initial adopters of YouTube TV will leave in droves? No. They have done their marketing homework and know that the vast majority of current users will accept the $5 per month increase. Adding network selections from solid performers such as Time Warner’s TNT, the NBA, and Major League Baseball will be a justification to accept the increased price. True, the rates will only apply to new subscribers after March 13th, but Google knows that down the road will come a general price increase for all.
The reason according to media analysts is that YouTube needs to step up its game to be competitive with established services like Dish Network and their Sling TV offering, AT&T DirectTV Now, and Hulu. Sling can be had for $20 a month while Hulu comes in at $39.99 for 50 channels. YouTube currently sits at $35 a month with the increase bringing it up to $40. YouTube is estimated to be in last place among this group of 4, trailing Hulu by 150,000 subscribers.
Heather Moosnick, director of YouTube TV content partnerships said, “Sports is really one of the key offerings that a millennial would be willing to pay for a live TV service.” That makes things simple: their target audience is Millennials. The numbers show that when YouTube TV ads have hit the television airwaves, 96% of those ads were during sports programming.
Google might be hoping that the sports channels will attract Millennials because the loopy programming of USA, TNT, TBS, and Fox News – among others – is not likely to air the type of content that will interest them. The 1.7 million cable cutters of 2017 didn’t do it because it was cable. They did it because the programming was not worth the money they were paying. Everything isn’t just about streaming.
An interesting point to all this hubbub about cable versus streaming is that instead of the content provider (cable) being responsible for the infrastructure it is the user (you) who needs to spend the time and money to set things up right. That saves YouTube TV and others like it substantial money. Slow connections or disconnects may be their problem but will become your problem after you get a popup or some other advisory telling you the connection problem is on your end.
There may be another reason for the increased investment of the Turner packages. YouTube recently changed its monetization policies and while the jury is still out, there may be lost revenue accompanying that decision. Regular monthly subscription revenue is something that can be depended on. Ad revenue, not as much. Google will not abandon YouTube but to keep its daily upload numbers up it needs to have a cash cow. YouTube TV fills that bill.
It is way too early to see if YouTube TV will survive the competition in the long run. Current subscribers from other services need a reason to switch or add YouTube TV, and the current package offering, even with the announced additions, doesn’t seem to be enough of an incentive for anyone to move. It seems they are betting on sports, just like everyone else.
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