In 2014, when YouTube made the decision to develop a product akin to cable TV, one of the main objectives was simply to improve ties with Hollywood. After battling Viacom for seven years over massive copyright infringement, YouTube CEO Susan Wojcicki sought a method to collaborate with networks and studios rather than compete with them. With the wide assignment of “figuring out what YouTube may be able to achieve with the major media organizations, with an emphasis around television,” she hired Christian Oestlien, who is currently YouTube’s VP of product management.
Seven years later, the business’ live cable streaming package, YouTube TV, is still popular. Although not quite the same as having 5 million subscribers, the business today said that 5 million individuals are actively using YouTube TV, either for a fee or as a trial. Even though there are fewer cable customers in the US — down to 46.2 million in the first quarter of this year — it has gained 2 million subscribers since mid-2020. The largest US cable provider, Comcast, reported 17.6 million customers in the first quarter of this year, a decrease of over two million from the prior year.
The internet-cable alternatives, however, have been unevenly distributed. With over 4.1 million members, Hulu with Live TV is expanding briskly, whereas Fubo, Sling, and a few other services have mostly struggled to gain traction. Overall, YouTube TV is a modest but significant participant in the TV business with five million users.
Of course, none of these figures even come close to the 220-million-plus Netflix customers or the 130 million or so Disney Plus users. And given how quickly on-demand streaming is growing, it’s natural to question how long YouTube TV’s “cable but better” strategy will actually hold true. Well, a while, responds Oestlien. Although live television may be on its way out, it will take some time. Additionally, there is still money to be gained since, despite its problems, Oestlien notes that “TV is still a tremendously valuable industry to our partners.”
In reality, sports continue to be the most profitable thing happening in the TV business and are so profitable that they prevent YouTube TV from becoming a totally streaming service. The majority of the top sports content is still included in the package, especially with local broadcast channels and regional networks, according to Oestlien. These are still the primary factors that lead individuals to subscribe to YouTube TV or any of its rivals. It is similar to the cable package but has a better app, larger DVR storage, and an anytime cancellation policy. In essence, it is a sports package with a few other highly appealing networks added to fill it out and make it something the whole family can enjoy.
Okay, but won’t streaming still be used for sports eventually? Disney is becoming more and more invested in ESPN’s digital future, while organizations like the NFL and MLB are already starting to sell rights to firms like Amazon and Apple. This trend appears to be continuing. Although Oestlien concurs, he adds that it may make YouTube TV even more beneficial. He claims that starting the game has grown much more difficult as more leagues join streaming services or even create their own. also pricey. You just need to consider the price plan that would need to be used there, according to Oestlien. You arrive to a point when a bundle actually makes a lot of sense to make that all work.
The actual wager made by YouTube TV is that the package won’t go the way of cable. A generation of unbundling has passed, dividing content from a single source into several ones. This has reduced the cost of the services and increased the amount of excellent material, but it has also made discovery more difficult and account management more challenging, and it’s not always obvious how much money you’re actually saving. Oestlien and YouTube believe that a better bundle has to be created rather than the bundle being permanently broken.
Oestlien even imagines a scenario in which YouTube TV re-bundles the streaming services, reuniting Peacock and Paramount Plus the way CBS and NBC formerly did in the TV Guide. That presently seems like a pipe dream since streaming firms are desperately trying to retain people inside their own content worlds rather than cooperating. Because they would want users to open the Netflix app rather than merely search for anything on Justwatch, Netflix and other companies have even fought inclusion in universal search tools. However, when these services become more prevalent, many of them would have a motivation to search for a business with excellent distribution and substantial financial resources.
By the way, YouTube is not the only business taking this route. HBO, for example, is apparently poised to return to Amazon Channels after earlier leaving the service and losing 5 million customers in the process. Both Apple and Amazon have had success allowing people to subscribe to HBO, Starz, and other services through their own platforms. Additionally, the YouTube TV app already allows you to subscribe to HBO Max and view all of its programming. But thus far, the majority of services have chosen not to participate in these all-encompassing platforms.
The package is essential to YouTube in general as well as YouTube TV. If the present streaming patterns continue long enough, YouTube’s whole business model might be put in jeopardy. What if HBO Max was the only place to see John Oliver’s most recent epic tirade and Carpool Karaoke was only accessible on Peacock? What if Spotify and Apple Music were the only places to see music videos? Of course, YouTube has a ton of original material, but TikTok, Instagram, and other platforms are eager to change that as well. The success of YouTube is in great part due to its position as the largest online distributor of other people’s videos; however, a drive for more control and streaming may change that.
That may be the reason why after speaking with Oestlien, I had the impression that YouTube TV is still mostly used as a diplomatic tool with content creators. Oestlien also manages YouTube’s linked TV division, which entails helping to arrange agreements to get various TV shows into the main YouTube site. He seemed unconcerned about content loss. He claims that there are 2 billion users globally.
Therefore, I believe that YouTube can be a terrific partner there whether material is provided in a bundle or where over time we explore various ways of releasing it. He claims that even in sports, YouTube is entering into agreements to utilize league material in many other areas throughout the network in addition to streaming games on YouTube TV.
YouTube TV seems like a hit and a hedge after five years. However, if the future of TV is ever going to be drastically different, it’s still a long way off. The amount of money used to maintain the status quo, particularly in sports, is excessive. Though “Cable but better” may not always be the ideal TV strategy, it’s currently doing very well.