YouTube to offer TV subscription service

The world’s largest video site, YouTube, is about to launch a TV subscription service of its own called YouTube TV.

The product has been in the works for two years, initially under the name Unplugged.

A new app will be launched in the next couple of months, initially in the United States where it will cost $35 a month – which is similar to other new digital services and far less than a pay TV subscription.

“Younger generations want to consume TV the way that they’re used to watching TV online, live and on-demand,” YouTube CEO Susan Wojcicki said at the media launch of YouTube TV this week in its original content-creating studio in Los Angeles.

The new service is not affiliated with YouTube Red, which the company launched in 2015, offering ad-free subscription content for $9.99 a month. Last month it launched four new kids’ shows.

YouTube claims to reach more 18-34 and 18-49 year-olds than any cable network in the U.S. It also has 81% of 6- to 12-year-olds, according to an annual study on kids’ digital behaviour from market research firm Smarty Pants.

But YouTube TV will have two main points of difference.

More than half of YouTube views come from mobile devices, so the service will be “mobile first”. However, subscribers can also access it on laptops and traditional TVs.

It will also offer a “skinny bundle” composed of the four broadcast networks – Fox, ABC, CBS and NBC – and some cable channels related to these broadcasters like Fox News, ESPN and Bravo.

But for the foreseeable figure, the offer will not include cable-only channels like Viacom, AMC or Time Warner.

Subscribers willing to pay a bit more can get premium cable channels Showtime or Fox Soccer Plus.

Altogether YouTube TV will offer about 40 channels. YouTube TV is also working with local TV stations and regional sports networks across the U.S. to provide users with local TV news, weather, and sports.

For the major broadcasters, YouTube gives their content remarkable distribution, given that virtually everyone with a smartphone or connected TV already has a YouTube app.

According to its Chief Product Officer Neal Mohan, it will have a cloud DVR with unlimited storage space (so users can record and store programming) included in the base package (which Hula will have in its service also due in the next few months), and a recommendation system powered by its parent company’s Google’s AI.

It’s not expected to make much profit in the early years, given the huge licensing fees it will have to pay the large broadcasters.

But for YouTube it’s the beginning of turning those 1 billion users into subscribers.

There is no indication if and when the service will arrive in Australia.