YouTube TV, New Live Streaming Service
What is happening?
YouTube announced on February 28th, 2017 it is rolling out a live TV streaming service in the coming months to certain cities across the United States, called YouTube TV. This new service will offer live streaming of major channels – ABC, CBS, FOX, NBC, ESPN – as well as regional sports networks and dozens of cable networks. YouTube says it’s also partnering with local TV stations, which will cover local news and other programs. All of this premium content will be available for viewing on mobile devices, computers, tablets and connected TVs. The new YouTube TV package will also include access to a cloud DVR for recording shows, which will include no storage limits. YouTube says it will automatically save recorded programs for nine months. A YouTube TV membership costs $35 a month for approximately 40 channels and is commitment-free, allowing for cancellation anytime. For an extra fee, users can add additional channels to their package as well.
What does this mean for advertisers?
Marketers trying to reach those users ditching traditional TV subscriptions, also known as “cord cutters” will now have another avenue with YouTube TV. Nielsen recently found that YouTube reaches people between the ages of 18 and 49 on mobile devices alone more than any TV network in December of last year. Additionally, comScore found that 44% of YouTube viewers in that age bracket don’t watch any prime-time broadcast TV in an average week. This along with other providers offering streaming TV is another indication that TV is moving to digital.
Now with YouTube partnering with so many cable networks, HBO Now, Sling, DirectTV Now, and Hulu (that is developing a streaming service launching in the spring), almost all major broadcast channels will be available for streaming online. See below for a list of available YouTube TV networks:
/ The Big Picture
YouTube TV is Google’s attempt to challenge traditional pay-tv distributors and appeal to “cord-cutters”.
Analysts have speculated that with the new streaming service, Google will have access to about two minutes of commercial time per hour to sell to advertisers on the featured cable networks. This is equivalent to the time typically allowed to cable providers for local ads. YouTube TV will be available across the US, allowing Google to sell ad inventory on a national scale, unlike current cable operators that have geographic limitations.
Advertising On YouTube TV
This play by Google is not surprising and will allow the advertising giant to leverage their advanced targeting technology and vast resources of consumer data to deliver hyper-targeted ads to specific audiences. Analyst Michael Nathanson said Google’s primary goal with YouTube TV is to, “break into the in-home and television advertising market” by selling targeted advertising in the network ad slots that typically go to cable operators. “As TV shifts from linear feeds to streams, we see an opportunity to improve the ads experience for everyone,” said Neal Mohan, YouTube’s chief product officer.
As more TV gets delivered via the internet, the more that TV advertising will become “dynamic,” along with the rest of the Internet. This is a huge shift from most broadcast and cable networks that still sell the majority of their advertising on a national basis. More targeted advertising could put TV’s high ad prices in jeopardy.
What every marketer should know
YouTube TV could be an excellent opportunity for marketers who are looking for a way to reach “cord-cutters” and younger audiences (ages 18-49). Advertisers will also most likely be able to take advantage of Google’s targeting data to create highly-targeted ads, therefore cutting the cost of a traditional TV buy.
A word of caution: it will take YouTube TV awhile to scale. Meaning that the ad opportunity will be limited in 2017, and early on pricing will be a limiting factor.
IMAGE SOURCE: YouTube