Some surprising news: One of the bigger new digital service efforts, YouTube TV, won’t be taking any Turner networks. But it may not be for the reasons one might typically think when it comes to traditional pay TV deals with cable networks.
John Martin, CEO of Turner, said that YouTube TV “politely” declined Turner’s offer to let the virtual MVPD carry its channels, including CNN, TBS and TNT.
“We said, 'We would like you to carry us,' and they said, 'No,” said Martin, in speaking an industry conference. Sure, money was a consideration -- but from a different perspective.
“[They] started with a retail price they wanted to work back from, and they filled up their bucket with other networks,” said Martin.
All virtual MVPDs are looking to structure new consumer packages costing $35 to $40 a month package for around 40 channels. Seems YouTube TV had to make choices to get to that level. Even then, other industry executives, such as Bob Bakish, president/CEO of Viacom, believe this might not be enough to secure profitability.
What’s in for YouTube?
Right now, it’s pitching a package focusing on all the major broadcast networks, as well as an earlier deal made with cable network group, A+E Networks.
Still, some of this seems strange. Turner networks bring in big, broadcasting-like viewership -- top networks among all cable channels. Shouldn’t that be what YouTube is going for -- especially considering other wide-ranging digital video platforms?
One caveat seems to be the concern over sports: TNT has a major regular season/playoff deal with the NBA. Martin theorized YouTube TV had likely used up most of its content budget carrying live sports.
In the past, traditional pay TV providers didn’t have to make these kind of choices. Deals could be made to include virtually all kinds of cable networks -- up to 200 to 300 -- for many traditional cable, satellite, and telco TV packages, costing $90 to $125 a month. Big viewing TV networks groups were almost always a major inclusion -- if not necessity.
Ultimately, for many, the key word is what “skinny” in this regards means: No sports programming. Sports typically have a very high price for TV network/channel owners -- which needs to get passed on to consumers. Many new services DirecTV Now, Sling TV and others offer options for sports and non-sport programming/channels.
Viacom says it's looking for even lower consumer monthly price packages. The company is mulling a streaming package of entertainment channels (non-sports) available for between $10 and $20 a month.
Back to YouTube TV and Turner: Martin says YouTube TV could add Turner in the future. Still, he warns about shrinking future skinny network bundle deals and its effects on TV network groups.
“A lot of companies that have marginal brands, or can’t compete, will go away.”