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State of the Screens

Full Circle: Streaming TV Prices Approach Cable Packages They Seek To Replace

By July 10, 2020November 15th, 2021No Comments

Big news: YouTube TV and Fubo raised their live-TV prices to $65 per month.

Why this matters: Streaming pay-TV packages (vMVPDs) launched with low prices, but have increased steadily.

Key passage from Protocol:
“Let’s just call this what it is: cable! Sure, the apps are better and it’s easier to cancel…but this is just cable TV. Because it turns out, for all the tech companies’ wherewithal and leverage, they couldn’t break the way the TV business works.”

Bottom line #1: YouTube TV is losing money even after this increase due to its programming costs.  For example, the chart below shows a leaked example of programming costs from 2019.

Bottom line #2: Streaming pay-TV services cannot offer channels a la carte, which causes the base package price to increase as channels are added.

YouTube TV prices (YoY growth):
1) 2017 – $35
2) 2018 – $40 (↑ 14%)
3) 2019 – $50 (↑ 25%)
4) 2020 – $65  (↑ 30%)

YouTube TV subscribers (YoY growth):
1) 2017-Q4 – 300K
2) 2018-Q4 – 1M (↑ 233%)
3) 2019-Q4 – 2M  (↑ 100%)

Interesting: YouTube TV was already seeing a deceleration in sign-ups before the price increase.

More #1: RIP YouTube TV, you’ll make a great case study

More #2: Here are more streaming choices than ever — why are prices going up? 

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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