Alphabet Inc (NASDAQ:GOOGL)’s prospects in the TV industry are taking shape, with the company having reached an agreement with CBS Corporation (NYSE:CBS) to offer its channel on its upcoming web TV service. It is also emerging that the tech giant is in talks with Twenty-First Century Fox Inc (NASDAQ:FOX) and Viacom, Inc. (NASDAQ:VIAB) as it looks it looks to give subscribers a reason to sign up for its packages.
Google’s Web TV Service
YouTube is to play host to Google’s new web TV service that will not only offer news and original shows but also live events such as NFL games. According to people with knowledge of the matter, the ‘skinny’ bundle will cost between $30 and $40 a month.
The new service will mostly target customers who are on the fence about signing up for traditional pay TV service, given subscription costs. The service is also likely to be different from YouTube Red, which is ad free. Airing ads on the service should allow the tech giant to generate a substantial amount of revenue from brands looking to reach this subset of the market.
Countering Streaming Networks
A Google-Fox tie up would not come as a surprise given that the latter is aggressively looking for ways to make its content broadly available. A change in the way people access content has already seen many switch their allegiance to streaming networks. Google’s web TV should thus be able to offer the studio giant an opportunity to reach out to the millions of people that visit YouTube on a regular basis.
Google, however, faces an uphill task given that it is entering a field crowded with options of all sorts. DISH Network Corp (NASDAQ:DISH) has already launched its skinny TV service it dubs Sling TV. Sony Corp (ADR) (NYSE:SNE) is also flexing its muscle in the field with PlayStation Vue, and Hulu having also reiterated plans to launch a cable style online service. Securing rights to most desired networks could also pose significant headwinds.
Alphabet shares traded higher on the news of the proposed web TV service, rallying by $5.60 to close Wednesday trading session at a high of 827.09 a share.