YouTube is testing free ad-supported TV channels that show content from certain media companies, according to a report from The Wall Street Journal. The concept is similar to services like Pluto TV, Roku’s Live TV channels, or the experiences built into TVs from companies like Samsung, LG, and Vizio — there will be a “hub” that lets you pick what you want to watch.
The concept has been part of a profitable business model for some of the other companies in the space, as earnings reports from Vizio and Roku show that they make more profit from advertising and commissions on subscriptions than they do from selling hardware. The most recent reports showed Vizio (PDF) pulls in an average of $27 annually per user, while Roku (PDF) manages to net more than $44 per year.
An unnamed YouTube spokesperson confirmed the tests to the Journal, and the report says the feature could roll out more widely this year. It’s reportedly working with companies like Lionsgate and A&E, with the latter being the owner of channels like History, FYI, and Lifetime.
There’s also YouTube TV, the paid service that lets people get a similar drop-in-and-watch experience with standard television channels. Last summer, YouTube announced that around 5 million subscribed to YouTube TV. It’s always possible that the free channels could be marketed using the YouTube TV brand.
Source: The Verge