Digital networks like Tastemade are experimenting with different ad formats on YouTube TV before Google eventually takes over the inventory.
According to Digiday, YouTube TV isn’t currently paying digital networks like Tastemade or Young Turks a carriage fee to include them in their channel lineup. That means those networks get to control their ad inventory and play around with how to sell it.
Tastemade builds its 30-minute programming blocks with 25 minutes of content and five minutes of ads. It has looked into replacing ad blocks filled out with 30-second commercials with sponsored content instead.
According to the report, the sponsored content is a way around YouTube TV’s current lack of targeting for ads on digital networks, since those channels have to attach those ads to their content feed ahead of time.
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But the experimentation for those digital networks will have to stop once YouTube TV becomes part of the Google Preferred ad-buying program, at which point those digital networks will begin getting a share of the ad revenue Google generates for YouTube TV.
YouTube started charging $40 per month after adding Turner’s networks including CNN, TBS and TNT to the service. But even after the price increase, Bernstein Research analyst Todd Juenger estimated the service is still losing money without a clear path to profits. He said that Google’s advanced ad sales capabilities likely won’t be what does the trick.
To boost revenue, Juenger envisioned a scenario where YouTube won significant sports rights and built its own channel on YouTube TV to distribute it. In that case, YouTube TV would control and monetize all the ad inventory on that channel.