Google Signs Up CBS for Planned Web TV Service -- Update
October 19 2016 - 3:55PM
Dow Jones News
By Joe Flint and Shalini Ramachandran
Google Inc. has reached an agreement with CBS Corp. to carry the
broadcast network on its soon-to-be-launched web TV service, people
familiar with the matter said.
The new service, which will be housed on Google's YouTube
platform, is likely to debut in early 2017. Google is also near an
accord to distribute channels owned by 21st Century Fox and is in
advanced talks with Walt Disney Co. as well, the people said. .
(21st Century Fox and News Corp, which owns The Wall Street
Journal, share common ownership.)
The service, dubbed Unplugged, aims to be a low-cost option
targeting consumers who either have resisted subscribing to
traditional pay-TV or cut the cord due to rising costs.
Google is looking to offer a "skinny" bundle of live TV channels
with a price in the range of $25 to $40 a month, according to media
executives who have heard the pitch.
The new offering is likely to be separate from YouTube Red, the
ad-free subscription offering the company launched last year. A
curated portion of YouTube Red videos will be included as part of
the skinny TV bundle, one of the people familiar with the matter
said.
Google will enter a crowded field of so-called "over-the-top"
web video services. Last May, Hulu, the online video platform owned
by Disney, Fox, Comcast Corp. and Time Warner Inc., said it plans
to launch a cable-style online service in the first quarter of
2017. It, too, hopes to carry the major broadcast network and
select cable channels at a price in the $40-per-month range.
Last year, Dish Network Corp. launched SlingTV, its so-called
skinny bundle service. Sony Corp.'s PlayStation Vue, a more
high-end option, also launched last year.
Apple Inc. has explored putting together its own discounted
online TV bundle, but ran into issues securing media rights on the
terms it desired.
A YouTube spokesman declined to comment. The initiative is being
overseen by YouTube content partnership executives Kelly Merriman
and Heather Moosnick, the people familiar with the matter said.
To offer low-cost online TV service, new entrants must try to
secure rights to the most-desired networks while leaving out many
other channels in the typical cable TV lineup. That can be
difficult, since large media companies negotiate package deals for
carriage of their groups of channels.
Securing rights to carry major broadcast outlets has been a
particular challenge, in part because it requires the buy-in of
both the networks that make programming and the TV stations that
distribute it. Earlier this week, YouTube executives met in New
York with several large local television station owners as well to
discuss the service.
For years, Google has danced around the idea of getting premium
content for YouTube, in part to get its hands on the high ad rates
that television commands. But the company has faced skepticism from
big media companies because of their perception that YouTube wasn't
aggressive enough tackling piracy on its site.
Beside CBS, other channels from CBS Corp. that will be part of
the YouTube offering include Pop and CBS Sports Network. 21st
Century Fox channels include Fox Broadcasting, Fox News, FX, Fox
Sports and National Geographic Channel, the people familiar with
the matter say, while Disney-owned channels that could be part of
the service include ABC, ESPN, Disney Channel and Freeform.
For media companies such as CBS, the emergence of new platforms
is seen as a key new revenue stream and a hedge against consumers
dropping traditional pay-TV services. In talks with investors, CBS
has said it would seek a rate for its content on such services that
is between the roughly $2 per-subscriber, per-month entrenched
distributors pay and the $5.99 a month it charges for "All Access,"
the subscription online service it sells directly to consumers.
One sticking point that has emerged in YouTube's discussions
with some programmers is that YouTube is pushing for rights to
overlay data on network feeds -- for instance, fantasy or sports
stats on top of ESPN's channel feed, or tweets alongside a show,
people familiar with the talks say. TV networks are very protective
of their live feeds. One worry about overlaying a Twitter feed next
to a show, for example, is that trolls can overtake a conversation
and turn things ugly easily -- insulting an anchor.
Media companies are also wary that YouTube will bundle their
premium content alongside Web-native videos and YouTube stars,
which they perceive as lower value content.
Write to Joe Flint at joe.flint@wsj.com and Shalini Ramachandran
at shalini.ramachandran@wsj.com
(END) Dow Jones Newswires
October 19, 2016 15:40 ET (19:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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