• by Steve Sternberg , Featured Columnist, March 8, 2017

The latest issue of “The Sternberg Report” converts traditional generations into Media Generations, which are largely based on the media and media devices people grow up with (rather than simply gain access to as adults).

YouTube TV seems most geared to the two most recent media generations. The Multi-Platform Generation (1996-2010) grew up with high-speed Internet, DVRs, on demand, video streaming, smartphones, social media, multimedia devices, and original scripted series no longer being exclusive to broadcast television.  The Mobile Generation (born after 2010) will grow up watching what they want, when they want, and where they want it.  This generation makes little distinction between broadcast, cable, SVOD, or OTT.  Content means more than distribution source or screen.

YouTube TV (Google) is entering a space that is getting more crowded, but is by no means saturated.  Sling (Dish Network) has more than 1 million subscribers and offers plans ranging from $20/month for 30 channels to $40 for 90 channels. DirecTV Now (AT&T) has 200,000+ subscribers, with plans ranging from $35/month for 60 channels to $70 for 120 channels. Playstation Vue (Sony) has more than 100,000 subscribers and charges anywhere from $45/month for 45 channels to $75/month for 90 channels.  Hulu (jointly owned by Disney, Comcast, 21st Century Fox, and Time Warner) will soon launch its own live streaming service.  All of these are geared primarily to cord-cutters, potential cord-cutters — and those who didn’t want to pay the high price of the cord in the first place.

Receiving programming through the Internet does come with some problems.  These services have already been plagued by issues like shows freezing, systems crashing, error messages, etc.  Live streaming can cause problems with major live events such as the Super Bowl or Academy Awards, which have millions of subscribers trying to access the programming online at the same time.  All subscribers do not have the same broadband capacity.  These services have reportedly had to hire large customer service staffs to handle subscriber complaints.

YouTube TV will start out costing $35/month for 40+ channels.  It will not include Viacom, Turner, or Scripps networks, which could hurt initially.  It will include access to YouTube Red, the site’s premium video service, as well as including a cloud-based DVR with virtually unlimited storage capacity (an advantage over other services).  It also plans to work closely with local stations to bring local content to subscribers. A single subscription will allow six separate accounts, with subscribers being able to watch anywhere on any type of screen.  

I find it hard to believe YouTube won’t increase the number of channels offered and raise the price for an expanded package at some point.

I would think YouTube TV is not designed as much for cord-cutters (although I’m sure they want them too), as for young consumers who are getting their own TV package for the first time, and are already heavy YouTube users.  

My 17-year-old son, for example, has a lot of friends who do not watch traditional TV.  They watch almost everything on Netflix or Hulu or online in some other way, and are more than happy to wait for a series they want to watch to become available.  Cost is the major reason they do not subscribe to cable or a satellite service.  They are used to being online all the time and they watch a lot of YouTube videos (and are familiar with YouTube “stars” whom I’ve never heard of).  Since it’s $35 per month, I can easily see them subscribing to this when they go to college (and thereafter).  Making a deal with Turner might be important, however – I can’t see my son or his friends signing on if they can’t get NBA Basketball.

Aside from YouTube, Hulu has the most interesting potential.  Being backed by the companies that own the broadcast networks provides an opportunity to create new, innovative ways to bundle and watch TV content.  But the broadcast networks have traditionally not been the big innovators. Whether they will be able to resist piling on additional channels (as they did on cable and satellite systems) that most people don’t want remains to be seen.