YouTube TV hits 5 million subscribers and is looking like the future of cable

Image: YouTube

A big part of the goal was to create a better relationship with Hollywood. Susan Wojcicki wanted to work with networks and studios instead of fighting them after seven years of fighting with Viacom. She gave Christian Oestlien a broad mandate, which was to figure out what YouTube might be able to do with the larger media companies.

The live cable streaming bundle is a hit seven years later. 5 million people are either paying for or testing out YouTube TV, which isn't the same as having 5 million subscribers, but is still an impressive figure. The number of cable subscribers in the US fell to 46.2 million in the first quarter of this year, down from 48.6 million in the same period a year ago. In the first quarter of this year, the biggest player in the US cable industry reported a decrease in subscribers. NBCUniversal, the parent company of NBCUniversal, is an investor in the parent company.

The internet and cable options have been mixed. Fubo, Sling, and a few others have mostly failed to catch on, as the number of subscribers for Hulu with Live TV has grown nicely. Five million subscribers make YouTube TV a real player in the TV market.

It pales in comparison to the 220 million-plus subscribers of Netflix or the 130 million who pay for Disney Plus. In a time when the rise of on-demand streaming seems so inevitable, it is easy to wonder how long the plan will last. Oestlien said it would be a while. It will take a while for live TV to die. Oestlien says that TV is still a profitable business for partners.

The truth is that sports is the most lucrative thing happening in the TV world and that's why YouTube TV exists. Most of the great sports programming still sits within the bundle. Those are the main reasons people sign up for the service. It's the cable bundle, but in a better app, with more DVR storage, and you can cancel at any time. It is a sports bundle with a few really compelling networks added to make it something that the whole household can enjoy.

Sports will eventually turn to streaming. The NFL and MLB are selling rights to companies like Amazon and Apple and that trend is likely to continue. Oestlien thinks that it might be even more useful to use the video sharing site. He says that turning on the game has become much more difficult as more leagues sign up with streaming services. It's expensive. There is a pricing strategy that would have to be implemented there. You end up in a place where a bundle makes sense. As those rights get more expensive, he thinks leagues and networks won't be willing to work with a company with deep pockets. The networks seem to need YouTube TV more than the platform needs the content.

The bundle won't die with cable. Unbundling separated content from a single source into dozens of them. It has made the services cheaper and led to a huge increase in great content, but it has also made discovery harder and account management more complicated. Rather than breaking the bundle for good, someone needs to build a better one.

There is a world in which Oestlien believes that the streaming services could be re-bundled to bring CBS and NBC back together. It sounds like a pipe dream at the moment, as the streaming services are trying to keep users inside their own universes. They don't want you to just search for something on Justwatch, they want you to open the app to find it. Many of them may have a reason to look for a company with great distribution and deep pockets.

The other companies on this path are not the only ones. The success of Apple and Amazon in allowing users to subscribe to their own services has led to the return of Amazon Channels, which lost 5 million subscribers after bailing on it. You can sign up for the service and get access to all of its content. Most services don't want to be part of the catch-all systems yet.

The bundle is important to the whole of the site. You can see how streaming trends could become a threat to YouTube if you play them out for a while. If Carpool Karaoke was only available on Peacock, and the only way to see John Oliver's rant was on Max, what would it be like? Is it possible that music videos would only go to Apple Music? TikTok, for example, has a lot of original content, but it's not the only one that wants to change that. As the internet's largest distributor of other people's video is a huge part of the platform's success, more control and streaming could change that over time.

I get the feeling that YouTube TV is still a tool for making nice with the content providers. He helps broker deals to put all kinds of TV content onto the standard YouTube platform and he seems unworried about losing access to content. He says there are two billion users. Whether or not content is distributed in a bundle, or where we explore other ways of distributing it, I believe that YouTube can be a great partner there. He says that, even in sports, YouTube is making deals to stream games on YouTube TV but also to use league content in a lot of other places on the platform.

YouTube TV has been around for five years. If we are ever going to get a wildly different future of TV, it is still a long way off. There is too much money in sports to keep things the way they have been. For now, the idea of cable but better is working well.