People/Biz

Experts weigh in on YouTube TV and the future of cable

YouTube’s proposed new subscription television streamer, YouTube TV, will face challenges in finding its audience in a marketplace already crowded with OTT and VOD offerings, according to industry experts. But don’t ...
March 2, 2017

YouTube’s proposed new subscription television streamer, YouTube TV, will face challenges in finding its audience in a marketplace already crowded with OTT and VOD offerings, according to industry experts.

But don’t discount the Google-owned service too soon, said Peter Csathy (pictured), founder and chair of CreaTV Media, in an interview with realscreen.

“YouTube wants to be the single place for all your video needs, plain and simple. Full stop. Period. That is what they want to be,” he said.

YouTube TV, announced earlier this week, is expected to begin a slow rollout in U.S. centers this year, giving viewers access to live television programming from more than 40 networks, including ABC, CBS, FOX, NBC, ESPN, for a monthly fee.

The service will also tap live sports, courtesy of partnerships with major networks such as ESPN, regional nets like Fox Sports Networks and Comcast SportsNet, and local TV stations. Showtime or Fox Soccer Plus will also be available for an additional charge.

Csathy (pictured) said one of the challenges facing YouTube TV is that people think of YouTube as a free video service, devoid of premium television content. Shifting people’s mindsets will difficult for an established service to achieve. Transitioning into a paid service will be an obstacle, he said, but businesses must evolve with what is going on in the world of movie and television.

Csathy sees a bumpy road ahead as linear and digital broadcasters jostle for a premium position in the marketplace, which already includes the likes of AT&T’s Direct TV or Sling TV, among others, offering similar packages to YouTube’s proposal. And then there are the pay-walled streaming competitors such as Netflix, Amazon and Hulu to contend with.

YouTube, he said, will have to find a way to differentiate itself from others in the space

Once that happens, though, watch out: “There will be a lot of roadkill. Not all service providers can win,” said Csathy.

Dan Rayburn, principal analyst at Frost & Sullivan, a business consulting firm, holds a decidedly different opinion from Csathy on the future of linear broadcasting. He doesn’t think YouTube TV will have much of an impact on linear television because, though there are already several digital alternatives to traditional TV, millions of people still subscribe to cable and satellite services.

“We have the numbers. We know how many people have paid TV, and how many people cut the cord. We know how many people sign up for these services. To me, it’s not really a debate,” he said.

Even with the decline in paid TV subs, the number of households with multi-channel subscriptions was about 98.4 million in the Q2 of 2016, according to a study from SNL Kagan.

Rayburn challenged an industry definition of “cord cutters” as anyone who cancels their subscription implying the are getting the content somewhere else, most likely online.

That’s not accurate, he said, noting the absence of solid numbers on how many of the cord cutters are in this category. He believes it’s a small percentage.

“YouTube TV we all know it’s launching in major markets, we don’t know how quickly it’s going to grow,” Rayburn said.

Csathy agreed that cable is far from dead. But, over time, streaming television will take over. There is a whole generation, and a second generation coming up, who’ve never paid for direct cable and satellite packages, and, as those populations age, the decline in cable subs will only become more prominent.

“It cannot be disputed, cannibalism is happening,” he said.

About The Author
Meagan Kashty is an associate editor of realscreen, an international print and online magazine that covers the non-fiction film and television industries. Meagan is an award-winning business journalist. Prior to joining the realscreen team, Meagan was online editor of Canadian Grocer, named Magazine of the Year at the 2015 Canadian Business Media Awards. She can be reached at mkashty@brunico.com, and you can follow her on Twitter @MegKashty

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