The success of services like HBO Go, which allows people who are not cable subscribers to watch HBO programming, has other channels looking at similar options. As reported today, it appears ESPN is going to throw its hat in the ring, teaming with YouTube for a streaming service that would allow sports fans who have cut the cable TV cord to watch a limited amount of ESPN programming.
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Walt Disney’s ESPN sports network plans to unveil a package of live programming it will offer directly to consumers on the Web, said a person with knowledge of the plans. The move is a baby step towards ESPN becoming a direct-to-consumer service.
ESPN’s new offering won’t include high-value content like professional football or basketball, but rather more niche leagues and possibly some types of college sports, the person said. ESPN has offered some content directly before, for a specific event like the Cricket World Cup in 2015.
More on this story as it develops here at the TV, Internet and Phone Blog.
Streaming video as competition for traditional cable TV providers is getting a big boost, as Youtube, the Google-owned streaming video giant, is getting into the cable TV game. Youtube has already overhauled its technical infrastructure in order to get ready for the release of the paid subscription service, called “Unplugged,” in 2017.
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YouTube, a unit of Alphabet Inc.’s main Google Internet business, is pursuing subscriptions for premium video to complement the largest ad-supported video site in the world. YouTube introduced its first paid subscription service, Red, last fall. Unplugged would bring more premium content onto YouTube’s web service and mobile apps, grabbing more viewing time and generating more non-advertising revenue.
YouTube has been working on an online cable package since at least 2012, one of the people said, but these plans have taken on new urgency in the past few months. Christian Oestlien and Jonathan Zepp are among top YouTube executives working on Unplugged, the people added. Apple Inc. and Amazon.com Inc. are working on similar proposals, while Dish Network Corp. and Sony Corp. have already introduced online TV services.
YouTube’s interest in a live TV package has been reported in the past, but this the first time the name and details of the plan have emerged. YouTube declined to comment.
“We aim to provide more choice to YouTube fans — more ways for them to engage with creators and each other, and more ways for them to get great content,” Sundar Pichai, Google’s chief executive officer, wrote in an letter to Alphabet shareholders last week. “We’ve started down this journey with specialized apps like YouTube Kids, as well as through our YouTube Red subscription service.”
The rollout of the service is not yet determined, though it’s estimated that it will cost consumers around $35 a month. Whether it will be one large bundle of channels or a series of “skinny” bundles of fewer channels relating to a certain theme (such as a Comedy bundle featuring Comedy Central and other similar channels) is also yet to be determined.
Stay tuned to the TV, Internet and Phone blog for more info on this as it develops.
Google and YouTube recently announced that they will be allowing some YouTube channels charge monthly subscriptions of $.99 and up, creating what they hope will be an alternative to cable TV, a video service willing to offer individual channels on the cheap instead of forcing people to buy bundles of channels, many of which they’ll never watch.
The subscription offerings now available from YouTube include Sesame Street, National Geographic Kids, Treehouse Direct, and Ultimate Fighting Championship. Nothing from Disney, Comcast/NBCUniversal, or any other major media company is available yet.
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For its part, Google says it’s mostly trying to give its channel partners a way to make money in a different way than simply advertising. From its blog post today:
Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel. You might run into more of these channels across YouTube, or look here for a list of pilot channels. Once you subscribe from a computer, you’ll be able to watch paid channels on your computer, phone, tablet and TV, and soon you’ll be able to subscribe to them from more devices.
More paid channels will be announced in coming weeks. If YouTube can get a critical mass of hundreds or even thousands of paid channels–most of which will likely continue to run ads as well–it may well start to offer something resembling a more flexible version of today’s pay TV.
Just don’t expect a true alternative to cable or even Netflix NFLX +1.82% or Hulu alternative anytime soon. First Google has to prove subscriptions work for viewers, who have become accustomed to going to YouTube precisely to get free video. Then it will likely need to create its own bundles to attract broader audiences and at the same time amass audience segments advertisers will want to reach as well. Finally, it will have to persuade bigger media companies with more mainstream shows–the stuff that will really woo people away from the living-room screen–that they can run their shows on YouTube and make enough to offset whatever they’re cannibalizing from pay TV partners.
YouTube will not be a legitimate competitor to cable TV for some time, but this seems like the first step for it to become one. Once a major media player signs on with them, then we’ll be talking.
Google is now making as much ad revenue per hour as ads on cable television, according to C21Media. This uptick in ad revenue is due to Google’s new skippable ad format on YouTube, which allows viewers to skip the ads that play before certain videos. Advertisers only pay when the ad is watched; this means that advertisers are only paying for eyes belonging to those who care about the ad being played. Google and advertisers see this as a win-win situation, as viewers are happy they are able to skip ads, and the advertisers are sure that those eyes they do get are taking in their ad content.
Google is also expanding its reach beyond America, adding to its 100 original US channels with a host of new YouTube networks in the UK, France, and Germany. Turkey is the latest country to get its own dedicated YouTube site; 46 countries across the world have their own tailored versions of the YouTube site, meaning more and more ad revenue for Google.
The growth of YouTube somewhat mirrors a shrinking in those watching cable TV, as more and more young viewers are turning toward the World Wide Web, sites like YouTube, and streaming services like Netflix and Hulu for their video content. It is likely that within a couple of years, Google’s ad revenue from skippable YouTube advertisements will surpass the ad revenue generated by cable television. So how will cable keep up?
It is likely that because of this cable channels will begin providing their own content on YouTube and similar sites, even more than they already do. Such videos will likely have similar ads and the revenue will be shared between the cable channels and Google. We are moving closer and closer to a time when all content is available online, either protected by subscription services or ads. It’s only a matter of time.
The soft launch for Google Fiber, the new high speed internet and TV service from Google, began last Thursday in some parts of Kansas City, MO. The limited release, to test the service and gauge interest, is only available in certain parts of Kansas City that Google is referring to as “fiberhoods.” Google alleges that their high speed internet service will be up to a hundred times faster than broadband high speed internet.
The TV and high speed internet bundle from Google Fiber does not offer phone service. This is because, according to Google, landline use is declining and Google has no interest in entering that market.
Google Fiber seeks to differentiate itself from other TV and internet services not only in the much higher speeds offered for internet service, but by creating a unified television and internet experience. The service allows a search function that encompasses:
- Prerecorded (DVR) programming
- On Demand programming
- Live television
The current Google Fiber lineup includes many cable channels and premium channels, but no channels owned by Fox or Time Warner. The service’s DVR allows for 500 hours of storage and the ability to record eight shows at once. Together, the TV and high speed internet service costs $120 a month, with the highest internet speed offered 1 Gbps. If customers only want internet, the cost is $70 per month.
If the soft launch in Kansas City is successful, Google Fiber will likely expand to other markets. It is hard to tell at the start if the service will be a success—it seems geared toward a younger, more web-savvy generation, and may not catch on well with older customers, the type of customers who tend to have the money to afford such high-end cable and internet services. Either way, though, it will likely force other ISPs and cable TV providers to improve their services in the long run.
YouTube, the streaming video site now owned by Google, is considering requiring subscriptions for some of its content. As a site that’s been free to use since its inception, this news is rubbing some people the wrong way, but it’s not necessarily a bad thing, if, as reported by MSNBC, some of the subscription services will go towards supporting already existing cables with small but loyal viewership as they make the move from cable TV to existing fully online.
There are a number of cable channels available from providers like Charter Communications and DIRECTV that do not receive the revenue necessary to continue producing the quality content that their small but loyal viewership demand. Salar Kamangar, CEO at YouTube and Google’s Vice President of Video, says that these channels may live on in an online basis in the future, and actually get a better deal from YouTube as they receive very little in affiliate fees from cable distributors.
No existing channels has as of yet publicly expressed a desire to move to YouTube, but the idea of smaller packages or even individual channels being available in some form or another on an a la carte basis is one that is gaining traction from viewers, as many do not want to pay for channel tiers of a hundred or more stations just to get the programming they want from five or six.
In addition to potentially working with existing cable networks, YouTube has struck more than 100 video programming deals with media partners including pop and rap icons like Madonna and Jay-Z. Kamangar also theorizes that sports like Ultimate Fighting Championship, mainly available on a Pay-Per-View basis from cable and satellite providers, would benefit from the online subscription system that may come about on YouTube. Advertisers like Unilever and Toyota are set to advertise on these exclusive content networks.