YouTube currently receives 1 billion hours of video views daily. Google is set to introduce YouTube TV this Spring, a new television streaming service, to the largest cities in the US. The question is whether YouTube’s current success in the video sharing market mean it will subsequently become a threat to current live TV streaming services in the US such as AT&T’s DirecTV Now.
YouTube TV will offer channels from 40 providers to begin with – a much lower number than DirecTV Now which currently offers over 100 channels to its audiences as part of its $35 introductory pricing. Out of these 40 providers, YouTube TV’s selection is currently a mixed bag – this is due to current problems with rights regarding digital content. For example, HBO and AMC (which are very popular with American audiences) will not be available for YouTube TV viewers initially.
It seems that Google may struggle to compete in the current TV streaming market, however, there are also many ways in which Google has the ability to take the lead. For the last ten years, YouTube has undeniably been viewers’ go-to destination for on-demand videos, and with this comes a few advantages.
Firstly, YouTube TV can gain subscribers by counting on its technological muscle. Secondly, unlike other TV streaming providers, YouTube TV will be able to provide its audience with seamless viewing, something that is not a sure-fire guarantee with other TV streaming providers. Lastly, its intelligent and already familiar interface for viewers could well be the key to Google’s TV streaming success.
Another advantage that Google is expected to have is in terms of its advertising, evident from the rich customer data sets that have come from its internet business. Google’s advanced ad-targeting abilities could help it improve ad rates and potentially transfer the current cost of content from customers to advertisers.
Google will also gain from the increasing prevalence of unlimited mobile data plans in the U.S. Over the last month, AT&T and Verizon returned to offering unlimited plans, after ending them for new customers five years ago. Smaller companies such as T-Mobile and Sprint are also currently promoting reasonably priced unlimited data plans as their best asset. This is likely to weaken any ‘zero-rating’ (when mobile network providers do not charge end customers for data used by specific applications through their network) advantages that AT&T could have provided with DirecTV Now. This will likely create a more equal playing field and will be yet another advantage for new competitors such as YouTube TV.
It appears that although Google may be weak in terms of viewer channel availability, it will make up for this with seamless video quality, sophisticated ad-targeting and strong viewer familiarity. This, together with increasingly widespread unlimited mobile data plans in the US, means that Google stands a good chance at beating other TV steaming providers including DirecTV Now to the top.