With more than eight million paid subscribers, YouTube TV has risen to fourth place among pay-for-TV providers in the United States, according to a report published Tuesday by Business Insider.
The YouTube TV subscription numbers — which place the service behind Charter, Comcast, and DirecTV — were revealed by CEO Neal Mohan in his annual letter to the YouTube community.
“We’re bringing everything viewers love about YouTube to the living room experience,” Mohan wrote. “And that includes sports. We just wrapped our first season of NFL Sunday Ticket, and it really shows the future of YouTube.”
Landing NFL Sunday Ticket was a major factor in YouTube TV’s subscription growth, maintained Eric Sorensen, director for the streaming video tracker at Parks Associates, a market research and consulting company specializing in consumer technology products, in Dallas.
“YouTube TV’s expansion and success can be attributed to the $2.5 billion NFL Sunday Ticket agreement they reached with the NFL,” he told TechNewsWorld. “Sports content drives eyeballs, and there’s no bigger product in sports entertainment than the NFL.”
Once the NFL kicked off in the third quarter of this year, so did YouTube TV subscriptions. Parks Associates survey data, Sorensen noted, show a 46% increase in subscribers in Q3 2023 compared to the same period in 2022.
NFL a Game-Changer for YouTube TV
“YouTube TV’s contract with the NFL has brought in a significant number of viewers,” added Neil Chase, co-founder of Brimstone Pictures, a film production company in Edmonton, Alberta, Canada.
“This has been a game-changer for YouTube TV,” he told TechNewsWorld. “Having a platform like the NFL adds legitimacy to the network and provides a built-in audience they don’t have to raise from scratch.”
“People are already used to paying premium prices for high-quality sporting events, such as the UFC and WWE, so paying a platform they already use to watch a product they already love isn’t a stretch.”
Airing live sporting events is a way that over-the-top services (OTT) like YouTube TV can poach subscribers from cable and satellite companies.
“Sports is one of the primary reasons for broadcast subscriptions,” explained Michael Pachter, a Managing Director with Wedbush Securities in Los Angeles.
“Live content is the only reason to pay for cable and satellite, and as we see a migration of live content to OTT, we will see continuing defections from cable and satellite,” he told TechNewsWorld.
“However, nobody does a particularly good job of capturing relevant sports or other live content except for Fubo,” he added. “Fubo is the only bona fide aggregator, but YouTube has the balance sheet to compete.”
Hitting a Sweet Spot
The NFL hasn’t been the only reason behind YouTube TV’s success.
“YouTube TV seemed to hit the sweet spot of content and price,” Brett Sappington, a media and entertainment analyst at Sappington Media, in Dallas, told TechNewsWorld.
Stefan Lederer, CEO and founder of Bitmovin, a video streaming infrastructure provider in San Francisco, agreed. “Even though YouTube TV has had some price hikes, it’s still more cost-effective than satellite and cable, and it still offers over 100 live channels, news, TV, and live sports in one place,” he told TechNewsWorld.
He added that YouTube TV has focused on adding new features for its customers to enhance their viewing experience, such as multi-view, which elevates the viewing experience for sports lovers. “The focus on delivering great content and a superior viewing experience is why YouTube TV is seeing a huge increase in subscribers,” he said.
Sappington explained that before growing the channel package to its current scope, YouTube TV started with local channels in most major markets along with a limited set of popular cable channels. This approach allowed the service to offer a relatively low price and build a base of customers. Over time, it was able to tune the offering, adding selected channels and boosting prices to maximize its appeal across consumer segments.
Powerful Branding Advantage
Sappington added that YouTube TV has an easy-to-use, intuitive interface that blends linear, video on demand (VOD), and recordings — a difficult proposition that many services have struggled to achieve.
“In contrast to the common cable TV experience at its launch, YouTube TV service started viewers at a home page rather than a channel guide, and consumers bought into the change,” he said. “More services now offer that same experience.”
YouTube’s brand also gave it an advantage in the market, he continued. While other virtual multi-video platform distributors (vMVPDs) such as Fubo, Sling, Philo, Vidgo, and others had to grow their brands from scratch, YouTube TV had an advantage in awareness.
“This brand advantage, along with the Google name, also allowed YouTube TV to enjoy a level of press coverage at its launch that other services didn’t have,” he said.
Another advantage Sappington cited is YouTube TV’s ability to offer good quality and wide availability across Android devices and other smart TV platforms. “Rival cable providers weren’t able to claim a notable quality advantage,” he noted. “Consumers were able to find YouTube TV on virtually all of the streaming devices they owned. So, access wasn’t a problem.”
Mimicking Cable and Satellite Models
YouTube TV also benefits from Google’s domination of internet search, maintained Rob Enderle, president and principal analyst with the Enderle Group, an advisory services firm, in Bend, Ore. “Google has a huge advantage when it comes to pushing their own content,” he told TechNewsWorld.
In addition, he noted that YouTube figured out relatively quickly how to monetize content and reward their most successful contributors effectively, as well as bringing forward a service that could do a better job than most at replacing your local TV feed.
“In short,” he said, “YouTube had a unique and powerful advantage from Google, and the YouTube team executed extremely well.”
Much of YouTube TV’s success has been in emulating its cable and satellite rivals by offering live sports and bundled channels. That’s likely to continue in the future.
“I think the OTT guys will have to emulate the cable and satellite industry and bundle with premium cable — like HBO or Starz — offer to list Netflix as a channel, add relevant sports content, and keep prices low if they want to compete,” Pachter said.
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