A new app optimized for smart TVs and connected devices launches this week with availability only on Android TV sets, but by the end of the year YouTube plans to roll it out to major distribution partners including Samsung, Apple TV, Roku and Xbox. The expanded scope for YouTube TV will enable it to build on favorable initial reviews of its user experience and introduce more potential customers to its offering, which features a cloud-based DVR, voice search and discovery tools beyond most traditional TV interfaces. A one-week free trial will be offered, followed by the option to sign up for the $35-a-month service, with no annual contract — the same terms that existed at launch.
During a recent preview of the app, YouTube director of product Christian Oestlien told Deadline that the strategy to target living rooms took shape as YouTube executives examined data from the initial launch that showed viewers gravitating to live viewing. Half of all viewing via YouTube TV also comes on big screens using Chromecast, and those viewers are dedicated, averaging four-plus hours a day.
“We launched with a mobile-centric presentation of the product,” Oestlien said. “We did that because we wanted to break the association with cumbersome, low-performance hardware in the living room — this idea that you have to have a cable company come and install a set-top box. … We wanted to tell consumers there’s a whole new way they can consume TV.”
Engineers designing the app sought to “take advantage of the size and scale of the TV,” compared with mobile devices, Oestlien added. So sports viewers can call up standings and statistics while the game action continues, or cinephiles can pull IMDb material about actors, directors and others as a movie plays. Oestlien and product manager Okalo Ikhena detailed many ways that “the new corpus” of content in the skinny bundle is organized, which benefits from the years of programming prowess that powers the main YouTube site. One defining trait is personalization, which means the service’s algorithm is designed to gradually become “smarter” about what you watch and prefer and then serve up recommendations based on that.
Despite many technical advantages and a user experience that is a clear improvement over traditional bundle players, it remains unclear how quickly skinny offerings from YouTube as well as Hulu, Dish, DirecTV and Sony PlayStation can reach meaningful scale. All are generally mum on subscriber numbers, but the few numbers that have leaked out suggest that combined they account for just a few million out of the total pay TV universe of nearly 100 million households.
Third-party app trackers revealed over the summer that YouTube TV had racked up about 2 million downloads. Of course, downloading the app is not the same as subscribing, so most recent estimates have put the service in the range of 200,000 active subscribers heading into the fourth quarter. Many Wall Street analysts have been swift in declaring the skinny ventures to be money-losers. Colin Dixon of nScreen Media, crunched the numbers in August and estimated that YouTube is paying more than $35 a month to secure the programming it provides subscribers of its $35-a-month bundle. Still, anyone watching the World Series on Fox cannot avoid YouTube TVs lavish, red-hued sponsorship push, the latest sign of a company with extremely deep pockets and the patience to disrupt over years, not in a lightning flash.
One concrete example of this on the YouTube TV platform itself is the portfolio of local TV affiliates. While never the sexiest properties from a national media perspective, these stations actually hold the keys to these services’ growth given the continued value, even in a world of fragmenting viewership, of sports and local news. But signing affiliates is a complex, expensive undertaking–witness the escalation and increase of carriage disputes. Even CBS, the most watched network, needed a long runway to get affiliates in line for its OTT service CBS All Access.
YouTube TV’s affiliate network now covers 68% of the nation’s local markets, across all of the top 50 DMAs. While some rivals have pushed that coverage level higher, Oestlien said they tend to be wide but not as deep.
“When they onboard a station in a market, they light it up,” he said. “We’re taking a more holistic approach. We want to have three of four or four of four [of the major networks’ affiliates] in a market before we add that market. We want it to be as close to TV as we can.”
He said the coverage will reach 90% next year.