Posted on May 25th, 2016 by REFUGE Categories Blog
By Vlad Vidaeff
As of late, it seems like everyone is trying to establish itself as a potential player in live streaming and the future of television. Facebook, Twitter, Apple, Amazon, and now Google are just a sample of some of the larger players who have begun to make moves. As millennials have made it clear that they see no value in paying for cable television when they are only interested in watching a handful of channels, media companies have become more flexible in considering new solutions to attract this generation of consumers. This blog will discuss YouTube Unplugged, Google’s attempt to target this valuable consumer base.
YouTube is developing a paid subscription service, Unplugged, that would offer customers a bundle of cable TV channels streamed over the Internet. YouTube has been working on the project since 2012 and has ambitions to bring it to market as early as 2017 as it has been in talks with major TV content providers including Comcast, NBC, Viacom, CBS, and Fox. These days, it is not unusual for millennials to not have a cable TV subscription at all. Instead, they often use streaming services such as Netflix, Hulu, and Amazon Prime to watch the programs that they are interested in. With that being said, if millennials could pay for a select number of networks at a lower price, there likely would be quite a bit of interest. This is exactly what YouTube is banking on. YouTube would have a main bundle, for less than $35 a month, which would include major networks such as NBC, CBS, ABC, Fox, etc. From there, customers could purchase additional packages that would include lesser-watched channels that focus on a specific topic such as sports, comedy, or kids programming.
The crux of the issue is the degree of customization that the consumer will have. There are competing forces at play as consumers want complete control while media companies want specific bundles in place so that they can maintain profit margins. Consumers are already comfortable watching streaming television on computers and mobile devices. This is not a hurdle. However, having consumers feel like they are paying for superfluous channels of no interest to them is exactly what causes millennials to cut the cord in the first place. Price is also a potential hurdle. If YouTube can reach an agreement with media companies that allows it to offer attractive packages, it could become a valuable source of income in addition to the ad-supported main site and its premium YouTube Red subscription service. Red, recently launched, offers exclusive access to videos from popular YouTubers. While not live television, YouTube does have the infrastructure in place to make this project a reality.
According to Barton Crockett, an analyst at FBR Capital Markets, “The Internet is setting the ground for the possibility of consumer adoption of skinny bundles at a level we haven’t seen before, but for now the numbers are pretty small.” Skinny bundles, featuring prominent channels such as ESPN, customization, and an affordable price could lead to a massive explosion in live streaming over the Internet. With so many heavyweights entering the ring, it will be thrilling to see who walks out of the melee as the champion of live streaming.