YouTube May Give Netflix a Run for Its Money in Video Streaming
Competition is increasing for OTT providers
In the other parts of this series, we looked at the impending subscription service from Alphabet’s (GOOG) YouTube. As the pay-TV industry faces increasing subscriber losses, some pay-TV operators are launching their own OTT (over-the-top) service.
Dish Network (DISH) has launched an OTT service called Sling TV. Priced at $20 per month, it offers a skinny bundle of channels. Telecommunication company Verizon (VZ) has also started offering its free, ad-supported video streaming service, go90.
Last month, T-Mobile (TMUS) announced Binge On, a service that would allow free mobile video streaming for subscribers of 24 streaming services. These include Hulu, Netflix (NFLX), Time Warner Cable’s (TWX) HBO Now, and Dish Network’s Sling TV. Currently, Google’s (GOOG) YouTube, Facebook (FB), and Snapchat aren’t included in these services.
Rationale behind going OTT
The reason pay-TV operators are launching their OTT service is to appeal to Millennials, the 18–34 age group. Millennials are tending to move away from pay-TV to streaming content online through OTT companies such as Netflix. These subscribers have either never subscribed to a cable service (nicknamed “cord-nevers”) or have stopped subscribing (nicknamed “cord-cutters”).
For telecom companies, the rationale behind launching an OTT service is to take advantage of the increased mobile usage. T-Mobile has claimed that its customers are using two-and-a-half times their wireless data to stream videos. T-Mobile has also cited forecasts that mobile video usage is increasing and expected to grow by 400% by 2020.
Dish Network (DISH) makes up 0.26% of the PowerShares QQQ Trust Series 1 ETF (QQQ). However, for an investor looking to get exposure to the application software sector, QQQ invests 23.3% in that sector.
Browse this series on Market Realist: