YouTube takes on US cable with $35 monthly TV service

02/03/2017

YouTube is set to launch a live TV service in the US in the next few months that offers the four major US broadcast networks plus cable channels.

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The service, called YouTube TV, will cost $35 a month for six accounts. More than 40 networks including Walt Disney Co's ESPN will be offered, as well as YouTube's original series starring creators from the platform, executives said.

YouTube Chief Executive Susan Wojcicki told reporters at an event at YouTube's production space in Los Angeles.

YouTube's offering will compete with Dish Network Corp's Sling TV, AT&T's DirecTV Now and Sony Corp's PlayStation Vue.

All are services designed to attract viewers who dropped traditional pay TV packages or never signed up in the first place.

Google’s announcement comes on the heels of YouTube’s integration into Comcast’s cable bundle.

Last year the firm unveiled YouTube Red, a subscription service featuring original content from professional content creators from within YouTube.

Content from this service will be available to YouTube TV.

Similarly, it is currently experimenting with unskippable 30-second ads on YouTube. Last week, the company announced that it will discontinue such ads in 2018.

Rival Facebook is also said to be developing a YouTube-like service on its platform.

Commenting on the move, Darren Khan, UK & European MD, Genero, said that as YouTube looks to shift into the on-demand market, brands must adjust their approach and create video content that is personal and bespoke to the audience.

“The announcement that YouTube will be launching its own live television streaming service is unsurprising, given the shift towards on-demand TV that has been driven by industry leader Netflix,” Khan said. “Merging YouTube with a live TV service is the perfect way for today’s generation to reap the benefits of an instant, personal and technology-driven service. Consumers nowadays want a hassle-free TV experience, combining 'don't miss’ live broadcast events with on-demand capability and unlimited storage and that is what YouTube is aiming to deliver.

“Crucially, as consumers shift towards on-demand video that increasingly sits on social media such as YouTube and Facebook, advertisers will be quick to get a slice of the younger online market – so often a tricky customer to permeate. Thus brands will face the challenge of having to quickly transform their own approach to create ad content that thrives on the smorgasbord of new platforms. YouTube poses a real threat to traditional cable television, but for brand leaders it offers huge opportunities to create ads that the younger YouTube audience actually wants to see.

“It’s clear that the amalgamation of video content and social media goes hand-in-hand, and is entirely transforming the marketing industry that once thrived off the motto ‘one-size fits all’. It has never been more difficult to achieve cut through in a world where the average attention span is 8 seconds, so creating fluid content for the right audience on the right platform is crucial. For brands, they must now create video ad content that consumers actually want to see and ideally enhances the overall viewing experience. Only forward-thinking brands that are operating with agility will succeed in the fast-paced market that is becoming narrower by the audio-visual second. Any brand that is too slow to adapt will ultimately start to lose meaning for that consumer and risk becoming more easily replaceable.”

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