YouTube today announced YouTube TV, a new online pay TV service which will cost $35 per month and offer content from the four major broadcasters and their affiliates. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan can also be reached for further comment at firstname.lastname@example.org or 408 744 6244. A version of this comment was posted earlier at Tech Narratives, where Jan weighs in on the day’s major tech news stories.
YouTube TV is a great reminder of just how hard it is to truly disrupt the traditional US pay TV ecosystem. Like the other services we’ve seen previously, it looks like YouTube is determined to hit a $35 price point and has had to make a series of arbitrary decisions about what should be in or out in order to achieve that. In its case, the focus is on the four large broadcasters and their affiliates, but that means it excludes the Turner channels, HBO, AMC, and lots of other popular content. That includes some major sports content, especially basketball, which detracts from YouTube’s message here that this is a great package for sports fans. The other big limitation is local availability, since YouTube only has deals to offer channels from local affiliates owned by the broadcasters. This continues to be one of the big barriers to true disruption in pay TV, and is likely to remain so for the foreseeable future.
Every over the top streaming alternative to traditional pay TV is handicapped in at least one way, and often several. YouTube TV will offer cloud-based DVR as a differentiator, but the missing cable networks are a big downer. This is basically a four-way deal with the big broadcasters and their cable affiliates, but it means if you want any of the other networks you’re still going to have to buy Sling, DirecTV Now, Sony Playstation Vue, or whatever else comes down the pike later this year. There’s a certain irony to the fact that, though these services are nominally disruptive, they actually offer even less choice individually in many cases than the pay TV services they’re aiming to replace. We’re still a long way from being able to choose a bundle of channels that makes sense to us, rather than having to buy a bundle someone else configured for business reasons.