YouTube TV Could Lose US$ 60 Million a Year

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by @todotvnews the 15/05/2018
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According to analysts at Bernstein Research, YouTube TV loses five dollars a month per user. If the service were to reach 1 million subscribers, it will reach a 60 million dollar deficit a year. 

Although skinny bundles, or virtual vMVPDs, are managing to slow down - and even reverse-cord cutting - in the US, their business model doesn't appear to be sustainable in the long term, claim analysts at Bernstein Research.

Using YouTube TV as an example, analyst Todd Juenger explained that Google's virtual operator loses an average of US$ 5 a month per user.

“Here's one big problem—any way we add it up, YouTube TV (just like all the other vMVPDs) loses money,” wrote Juenger, while also claiming the service has "no obvious path to profitability."

The most recent data for the service, revealed in January by Business Insider, states that Google's skinny bundle has 300,000 users in the US.

And if it maintained a sustainable growth rate, thinking of hitting 1 million subscribers in the short term doesn't seem so crazy; although that might not bode well.

According to Bernstein Research's estimates, by that time YouTube TV will be on the path to lose 60 million dollars a year.

"That’s not even a rounding error for Alphabet," admitted Juenger, citing the economic power of Google's parent company.

And if that wasn't enough, the analyst warned that if programming costs go up (causing YouTube TV to start losing US$ 10 a month per user) and the platform reaches five million subscribers, the annual losses would already rise to US$ 600 million.

Thus, according to Juenger, the Google's profitability path has to focus on other things: either increasing the price of subscriptions, or betting it all on ad sales, and eventually even launching their own sports network with exclusive rights and events that can be completely monetized.

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