Commentary

Legacy TV-Owned Virtual Pay TV: YouTube TV Too Far Ahead?

A new style of pay TV packages -- skinny bundles, and combo streaming/linear TV bundles from DirecTV, Charter Communications and Comcast Corp. -- have a lot of work to do.

Is more TV marketing the right approach? Right now, we don't see much evidence of that -- the brand message, that is.

Ongoing TV consumer surveys suggest only streaming continues to be top of mind. A new survey from digital marketing agency Adtaxi shows 70% of U.S. adults make streaming their first choice for TV and video content viewing. Cable? That only earns a 17% "first choice" mark, while broadcast-only comes in at 5%.

Traditional pay TV linear efforts are tracking somewhat similarly to where retail video stores were in the late 1990s/early 2000s.

In 2000, Blockbuster declined an offer from Netflix to purchase the company for $50 million -- now viewed as one of the worst media business decisions of all time.

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The deep irony then was revealed when four years later, in 2004, Blockbuster introduced an online DVD rental service called Blockbuster Online -- allowing customers to rent movies via the internet to compete with growing popularity of... yes, Netflix.

Now, to be fair -- in the current marketplace -- YouTube TV wasn’t the first into this marketplace -- it was Dish Network’s Sling TV in 2015.

That was 10 years ago. Two years after Sling’s start, YouTube TV began.

YouTube may have had modestly better brand positivity -- that and premium content, immediately making deals with TV station groups, sports networks (though not regional sports networks) and the NFL.

YouTube TV is now at 8.4 million subscribers, according to industry estimates, and poised to be the leading pay TV provider -- virtual, traditional or otherwise topping those legacy TV companies -- soon.

And consider that YouTube TV's standard monthly price is $82.99 -- not much of a deal for consumers versus what they paid for traditional legacy, cable-centric or satellite-centric pay TV.

A skinny bundle may be a lure for consumers going forward -- especially with a possible recessionary economy knocking at the door. But is that enough?

On top of this, legacy pay TV providers like Comcast and Charter now have other concerns. A bigger piece of their business -- broadband -- is weakening.

How do traditional pay TV providers and communications companies work around this?

New high-level messaging, of course -- of all types -- on lots of regular TV screens.

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