YouTube TV, Hulu With Live TV Proving To Be True Streaming Competition

Advertisement
Advertisement

YouTube TV gained an impressive 400,000 new subscribers in the fourth-quarter of 2018. Equally as significant, Hulu with Live TV (Hulu + Live TV) gained 500,000 new subscribers.

These are not confirmed numbers but are the latest reported estimates provided by MoffettNathanson. While there is likely to be some degree of variation to them, they are expected to be in the ballpark.

In either case, the wider sentiment here is that both Hulu with Live TV and YouTube TV have now passed the one million subscriber milestone. This is significant as it highlights both services are gaining substantial market share, and very quickly.

Advertisement

For example, Sling TV and DIRECTV NOW are largely considered the leaders in the streaming market due to their subscriber numbers in the past. However, in the fourth quarter of 2018 both saw a decline in momentum.

In DIRECTV NOW's case the situation appeared fairly worrying for the company as the service did not see any gains at all, instead it announced significant losses.

In January, DIRECTV NOW confirmed a quarter-over-quarter subscriber drop of 267,000.

Advertisement

In Sling TV's case, the decline in momentum is more of a decline in growth as the company still managed to bag additional subscribers.

In spite of this positive increase, the numbers suggest Sling TV has a problem gaining new customers quickly enough. For example, DISH Network (the owner of Sling TV) reported a large subscriber loss overall with DISH TV losing a lot of subscribers in the fourth quarter, as well as in 2018 in general. It would have been expected those losses would have resulted in greater gains for Sling TV Рif customers were simply moving from the company's traditional TV solution to its streaming option.

This would have also been on top of any natural gains Sling TV should have picked up during the same period. However, the numbers don't seem to suggest that was actually the case considering Sling TV only finished 2018 slightly up (2.42 million) compared to the year before (2.21 million). With DISH Network overall having lost far more subscribers in 2018 than Sling TV pickled up, that's a concern for the streaming market leader.

Advertisement

Even taking the best case of the two market leaders, Sling TV, compared to Hulu and YouTube's options, the yearly increase is minimal compared to just the quarterly increase said to have been encountered by Hulu and YouTube.

Neither Hulu or YouTube currently provide official figures although another report in July of 2018 suggested that at the time YouTube TV stood at 800,000 users while Hulu was closer to the one million marker. The latest data builds on that report by highlighting Hulu with Live TV continues to be the more competitive option. In fact, the data is somewhat implying that Hulu's solution may have now overtaken DIRECTV NOW when it comes to the number of subscribers. If correct, this would be noteworthy change to the streaming hierarchy.

MoffettNathanson also suggests 2018 as a whole was not quite as good for the so-called 'skinny' services as 2017 was. As when all the estimates are collected together the data points to the number of overall subscribers having declined compared to the year before.

Advertisement

One explanation given for this is the suggestion that demand was so initially high that there was a "pent-up" effect which presumably saw a greater number of people switching during the earlier stages. In comparison, 2018 was more in line with the rate that might be expected in a more natural state of operations for the vMVPD market.

This is a suggestion that resonates with how the market currently seems to be unfolding as not only was there greater excitement in the previous years, but prices were also lower. Services such as Sling TV and DIRECTV NOW managed to build out their subscribers by launching at extremely competitive prices and this was further beneficial due to the absence of competition at the time – both Hulu and YouTube's options launched some time after. Since then, however, all of the services mentioned here have at one time or another increased their prices and there are far less promotional activities in general to now take advantage of.

It is not so much that interest has lowered, but the rate of adoption is starting to become more normalized than it might have been in past years.

Advertisement