YouTube, not satisfied with the mountain of content it already offers for free, is testing a new entertainment destination. The video platform is bundling together free-to-watch channels to create a service that resembles Roku, Pluto TV, Tubi, and other free, ad-supported streaming TV (FAST) providers.
The as-of-yet unnamed service, which is still in its preliminary stages, employs a similar model to cable. Users peruse a central hub of streaming channels and can surf between programming as they would on a traditional TV set. The channels themselves are not necessarily the same ones available on cable; they are themed collections of videos that are available through always-on streams.
To curate its FAST channels, YouTube is working with a group of media partners, according to The Wall Street Journal. “We’re always looking for new ways to provide viewers a central destination to more easily find, watch and share the content that matters most to them,” a YouTube spokesperson told WSJ.
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One of those central destinations just arrived last year. It’s called Primetime Channels, and it lets users purchase streaming subscriptions a la carte. The 30+ subscriptions available at launch included Showtime, Starz, and Paramount+.
If you don’t feel like paying up for monthly subscriptions, the FAST service could offer a more cost-effective streaming experience. Presumably, YouTube’s rumored hub would be free, as are the ad-supported services that currently dominate the FAST space. But there would be opportunities for YouTube to upsell customers as well. YouTube TV, which provides a premium selection of ad-supported content, starts at $64.99 per month.
There could be another reason why YouTube is so eager to aggregate channels: NFL Sunday Ticket. YouTube scooped up the coveted rights to the football streaming package last December, and the price tag for that deal could go as high as $2.5 billion. One analyst estimated that YouTube will need 2.25 million Sunday Ticket subscribers just to break even.
Beginning with the 2023 NFL season, Sunday Ticket will be available on YouTube TV and Primetime Channels. If YouTube brings some football content to its FAST service, it could advertise Sunday Ticket and drive the subscriptions its needs in order for its big bet to pay off.
Of course, for that to happen, the new hub will need to make it out of testing. According to WSJ, a wider rollout could come later this year.
