More media and tech companies are offering internet-delivered “skinny bundles” as a way to woo the cord cutters, but so far this strategy isn’t paying off. According to a new report from the Information [paywalled], not only is adoption of these OTT bundled TV services not great, but the companies that offer them aren’t even turning a profit.
For example, according to data obtained by the Information, YouTube TV has about 800,000 subscribers. Similarly, Hulu with Live TV has reportedly yet to eclipse 1 million subscribers. And the cost to provide these subscribers with content is higher than the monthly fee. YouTube, says the report, “is estimated to be paying $49 per subscriber a month—$9 more than it charges—for most of its channels.” The company allegedly hopes to make up the difference down the line with advertising.
Overall, this points to two key issues. For one, even though more people are signing up for streaming services, it’s a drop in the bucket compared to cable and satellite TV subscribers. The Information estimates that about 6 million people use these services, compared to the overall cable/satellite market, which is at about 92 million. What’s more, in an attempt to woo more people and offer cheaper rates, most of these companies have yet to make money off these new customers. This is likely why many of these services are already hiking up prices.
Since companies can’t lose money forever, streaming services will likely see further changes down the line.
You can read the full Information report here.