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YouTube TV: Everything You Need to Know About One of the Fastest Growing Virtual Pay TV Services

(Image credit: YouTube)

YouTube remains the world’s biggest ad-supported streaming video operator, generating $15.1 billion in ad revenue in 2019. But lately, YouTube and its corporate parent, Alphabet, seem committed to the subscription model, as well.

Earlier in February, Alphabet reported during its fourth quarter earnings call that it has 20 million combined subscriptions for services YouTube Music and YouTube Premium. Also notably, it reported more than 2 million subscribers for YouTube TV, the virtual pay TV service it launched three years ago.

Related: YouTube TV Dropping Sinclair’s Sports Nets

Virtual MVPDs, or vMVPDs as they’re also known, don’t have a great reputation on Wall Street. These live-streamed versions of traditional pay TV services have been offered at loss-leader prices. Many predicted that Google and its YouTube subsidiary—which have given up quickly on unprofitable business before—would cut quickly on the vMVPD game. 

But based on YouTube TV’s recent aggressive dealmaking, that doesn’t appear to be the case.

Also read: YouTube TV Gains Distribution Into Windstream Kinetic Broadband Homes

Just within the last week (here in late February), YouTube TV announced a distribution deal with Windstream. As the telecom looks to ditch its own unprofitable linear video business, it’s offering YouTube TV to subscribers of its Kinetic-branded broadband service.

Likewise, cable operator WOW! announced that YouTube TV—along with vMVPD rivals Sling TV, fuboTV and Philo—will be offered to internet service customers in Charlotte, N.C.

These agreements with mid-sized telecoms followed an earlier announcement from Verizon, which is offering YouTube TV as an option to its fixed wireless 5G customers. 

Also read: HBO Max Gets Carriage in New YouTube TV Deal

A week earlier, AT&T’s WarnerMedia said it signed a new distribution agreement with YouTube TV that makes HBO and Cinemax available to subscribers and includes a commitment to distribute HBO Max when it launches.

YouTube TV is now the third biggest vMVPD service, trailing only the new market leader, Hulu Plus Live TV, and Dish Networks’ Sling TV, the first entry into the market back in 2015. 

YouTube TV is priced at $49.99 a month and delivers more than 70 networks. Local affiliate/O&O access to the Big Four broadcast networks is included in most U.S. markets. In terms of sports, YouTube TV has all the big national sports carriers locked up—ESPN, Fox Sports 1 & 2, TNT and others are included. NBA TV and MLB Network are featured, as are select regional sports channels. In L.A., for example, you get Fox Sports West and Fox Sports Prime Ticket. 

Updated on February 28, 2020: YouTube TV notified customers that they'll soon lose access to YES Network and other Sinclair Broadcast Group regional sports networks because of a carriage dispute. 

News selections include CNN, BBC, Cheddar and CNBC, as well as Fox News and MSNBC. And notably, YouTube TV has recently added PBS stations to its lineup. PBS had largely eschewed the vMVPD market until signing onto YouTube TV. 

Cloud DVR storage is unlimited, and users can share their YouTube TV account with six family members. Subscribers can stream their YouTube TV service on up to three devices at once. And YouTube TV app support includes Roku, Amazon Fire TV, Apple TV and Google Chromecast on the OTT device side; Sony PlayStation, Microsoft Xbox One in terms of gaming consoles; LG, Sharp, Vizio and Samsung in terms of smart TVs; and iOS and Android for mobile devices. 

According to equity research firm MoffettNathanson, the vMVPD market recently surpassed 10 million users. And YouTube has the major features that these consumers like—the ability to sign up and quit the service instantly without truck roll; and none of the hidden fees found in traditional linear services, such as regional sports network fees. 

The vMVPD game will become more profitable for YouTube TV, as well as any of its competitors who can increase subscribers to, say, past the 5 million and achieve some scale. Until then, YouTube TV—which started out with a $35-a-month price point—will likely continue to incur losses for parents Google and umbrella Wall Street presence Alphabet. 

Also read: Sony PlayStation Vue: Requiem for a Revolutionary

Others have give up. Notably, Sony gave up on its PlayStation Vue service, which offered a well-reviewed channel selection and user interface, similar to YouTube TV. 

But the aggressive dealmaking of late suggests that Google will stick with YouTube TV, at least in the near term.