YouTube TV gets lukewarm reception from analysts

Barclays analyst Kannan Venkateshwar points out that YouTube TV is missing several channels like TNT, TBS, CNN, and Nickelodeon that are important for giving the service wider appeal.

Google this week unveiled YouTube TV, its live TV skinny bundle coming within weeks, and reception among analysts was fairly indifferent.

Barclays analyst Kannan Venkateshwar, in a note titled “Another Day, Another Skinny Bundle,” points out that YouTube TV is missing several channels like TNT, TBS, CNN, and Nickelodeon that are important for giving the service wider appeal. He also says that it’s unclear if YouTube has been able to sign up any broadcast affiliates to go with the deals it has in place with all four major broadcasters, noting that those deals have also proved difficult for DirecTV Now and Sling TV and that Google is likely having similar troubles.

Barclays chart
Image: Barclays Research

“Overall, while the product has some interesting features like unlimited cloud storage/DVR (but no offline access), we were underwhelmed by the overall offering,” Venkateshwar wrote. “We believe the impact from this is likely to be more limited in appeal relative to other such bundles in the market.”

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Forrester analyst James McQuivey said that the pricing of YouTube TV ($35 per month) is likely a result of TV networks playing a role in making sure the service costs nearly as much as pay TV but with far fewer channels, making it more difficult for consumers to justify severing ties with pay-TV providers.

“Is this product going to change the world? No. It reflects that the world has already changed,” McQuivey wrote. “TV networks and cable programmers are embracing digital distribution, albeit carefully and after taking some beatings. OTT TV will be commonplace soon and broadband providers are gearing up by shifting to digital home and other value-added services. Most of all, digital platforms—Amazon, Apple, Google, and Facebook—are indeed taking over the world, this time with permission from their former adversaries.”

In a particularly damning editorial, independent analyst Alan Wolk—who asks whether YouTube TV is dead on arrival—says the service is positioned against a number of issues including Millennial-age viewers using others’ accounts to authenticate free TV Everywhere apps and general apathy around demand for skinny bundles.

Wolk says that MVPDs like Comcast have created an upper hand by integrating SVOD services like Netflix and YouTube into their set-tops and ramping up availability of TV Everywhere apps.

“Should 5G or start-ups like Starry ever manage to break the MVPD’s death grip on broadband, the future of TV will look a lot different, but for now, this appears to be where everything is headed—a direction that doesn’t leave much room for YouTube TV,” Wolk wrote.

Even BTIG analyst Rich Greenfield, who argues that virtual MVPDs will have success in cannibalizing legacy pay TV, admits that YouTube TV and other vMVPDs have uneven channel offerings and will likely continue to struggle with QoS issues.

“Time will tell if a heavyweight in streaming such as YouTube, can offer a more stable, reliable product at launch,” wrote Greenfield in a research note.

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