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Companies like Vizio and Roku already sell TVs that offer similar streaming services, but make more from advertising and subscription commissions than from hardware sales. YouTube is reportedly working with Lionsgate, and A&E owns History Channel FYI and Lifetime. Google demands a 45% cut in advertising revenue.
YouTube recently signed a deal with NFL Sunday Ticket and starting in the 2023-2024 season, the games will be available on YouTube TV and YouTube Primetime Channels. Google currently has about 5 million subscribers, and YouTube TV offers more than 100 live TV channels for $64.99 per month. The company may decide to market the free, ad-supported service under the YouTube TV brand.
The current trend among streaming services is to offer free or low-cost, ad-supported service levels. Netflix Peacock Disney and HBO Max both have ad-supported service levels, and it looks like YouTube TV will be next. YouTube's move also signals a shift in Google's strategy. A free, ad-supported streaming service allows YouTube to reach a wider audience, especially those who don't want to pay for a subscription.
Furthermore, this move fits in with Google's focus on advertising as its main source of revenue, as the company looks to diversify its revenue streams. As streaming services become more popular, more companies are looking to offer free, ad-supported tiers because it allows them to reach a wider audience while still generating revenue through ads.
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