Sunday, March 12, 2017

YouTube TV

At the end of February, YouTube unveiled YouTube TV, its live streaming service, which is being offered at only $35/month for basic accounts and with no long-term contract required. It is only launching in markets where it can offer full, live local broadcast feeds, like L.A., New York and Philadelphia to start, but YouTube has developed relationships to offer the majority of networks offered to cable subscribers now.

If YouTube is able to launch without significant technical issues, this will be a very attractive service to existing cable customers, Dish Network Sling customers, and more. And with more customers, this will be the next movement of TV ad spending, especially with the expected ability to serve up dynamic ads to a much more targeted audience than traditional TV.

Advertisers expect that ad formats will not change in the next few years, however, and will remain in traditional TV ad formats. The more immediate difference, and DirectTV is close to this, is the ability to serve up real-time, current ads to customers using playback or DVR versus recorded ads from when the program was recorded.

As interesting as dynamic ads and improved targeting is for advertisers, right now the Virtual Pay-TV marketplace is only 2M subscribers. Small potatoes compared to the overall market of ~94M Pay TV subscribers. For advertisers targeting millennials and other early tech adopters though, this is an area to watch.

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