In just eight years, and in a landscape defined by cord-cutting and decline, YouTube TV has become one of the largest pay-TV providers in the U.S.
In rapidly scaling to more than 8 million U.S. households (only Comcast, Charter and DirecTV are bigger) since launching in 2017, it has countered the long-established living-room paradigm. Viewers have embraced its new-model interface, which substitutes curation and algorithms for old-school channel-flipping, as well as features like Multi-view and an unlimited DVR.
One disruption involving advertising, however, has gained less favorable notice in some industry circles. As TV ad buyers and sellers gather in New York next week for a glittery annual spree of upfront presentations Monday through Wednesday, the role of distributors is never center stage. But unrest with YouTube TV’s approach has grown into what audio engineers would call “ground loop hum” issuing from a speaker. In Deadline’s conversations in recent days with about a dozen stakeholders in the TV bundle (programmers, vendors and media buyers), a clear majority criticized YouTube TV for what they said was a lack of collaboration and a willingness to waste ad inventory.
The general complaint: YouTube isn’t like the cable guys, stringing wires from telephone poles or sending trucks into residential neighborhoods. It is a data-hungry tech giant that doesn’t run its pay-TV business for profit but rather for longer-term strategic leverage. Therefore, the usual give and take between programmers and distributors does not apply. In practical terms, that means that any unsold inventory is not made available to programmers for resale or for promotional purposes, as has historically been the case in agreements negotiated throughout the pay-TV era. While programmers and distributors often clash (usually over carriage fees), they do share the objective of selling as much ad time as possible.
In a world of hundreds of channels airing 24 hours a day, unsold inventory is a given for all pay-TV operators. Obviously, not all inventory is prime-time sports or Yellowstone. Traditional cable and satellite companies looking to fill unsold time will resort to interstitial cards or house ads for their own services. From the start, though, YouTube TV has had other goals. Late YouTube CEO Susan Wojcicki described it at a launch event in 2017 as “an effort to evolve television.” Instead of serving “barker” ads or local spots for Bob’s Chevy to overwhelmed viewers, they deliver pastoral nature scenes of snowy mountain glades or acorn-nibbling squirrels in a misty glen, set to calming spa-like music. “Enjoy the zen,” the on-screen graphic urges, for a few seconds or sometimes up to 2 minutes or more. “We’ll be right back.”
“The tech companies have trouble selling all the ads avails they have and they have no concept of filling programming time with time buys like we do in traditional TV,” Chris Pizzurro, co-founder and head of Leap Media, told Deadline in an interview. “There are no informercials on YouTube TV, no Ginsu Knives.”
As a challenger to cable and satellite, YouTube TV is “leaning into the general dissatisfaction with the MVPD ecosystem” and deliberately upending industry convention, charges one top sales exec.
YouTube declined to comment for this story when contacted by Deadline. Media execs agreed to speak only if granted anonymity, given the sensitivities of discussing a long-term business relationship with a major partner.
“You know how they operate,” one high-level sales exec from a major media company said. “They’re very machine-like in trying to disadvantage you. Whenever you see that zen thing, it’s a commercial opportunity that’s not being monetized.”
Seeing how its daytime programming on CNBC was unfolding on YouTube TV, NBCUniversal decided to make proactive changes. Viewership of the business network small in number but outsized in affluence and influence. Recognizing the power of that viewership, the network aggregated would-be “zen” spots and used them for vertical promotion of various parts of the media empire, from Bravo to NBC’s sports, news and entertainment offerings.
In a moment when meditation apps and ASMR YouTubers have never been more popular, “enjoy the zen” has caught on with viewers. YouTube TV recently rolled out a full-time home where the nature-set interludes play endlessly.
“You asked and we listened,” YouTube TV said in a social media post. “You can now enjoy Zen 24/7 on our new Zen channel!
The age profile of YouTube TV subscribers is a big reason for the stance. While younger generations are more receptive to ads on social media and elsewhere online, they also are not looking for their parents’ TV experience, with more than one-quarter of every hour devoted to ad breaks. Viacom, as cable was beginning its swan dive in the 2010s, was accused of “ad stuffing.” Between that extreme behavior and the neglect of customer service just as Netflix was beginning to take off, the traditional linear industry almost seemed to be intentionally driving viewers away.
In March 2024, Nielsen measured viewership in homes with wired cable and homes with YouTube TV. It found that among 25-to-34-year-olds, cable represented 4%, while YouTube TV was 13%. The disparity was even greater, 11% to 22%, among 35-to-49s, From there up the age demo ladder, the pendulum swung the other way, with cable leading, 28% to 26%, among 50-to-64-year-olds and 49% to 22% with those 65 and older.
Bruce Leichtman, a longtime media researcher who tracks pay-TV providers, says much of YouTube’s recent growth is starting to flatten, so however it approaches advertising won’t necessarily define the entire sector. Other internet-delivered operators like Hulu + Live TV, Fubo and Sling TV have been flat or shedding subscribers in recent quarters.
“Their rate of gain is now half of what it was a couple of years ago,” Leichtman said of YouTube, noting a “pull-forward” in 2023 when it began streaming the NFL’s Sunday Ticket package. The company has also raised prices to almost $83 a month, up 20% in little more than a year, which could slow the momentum. “Part of their growth strategy in the beginning was to give the market power through lower pricing, but that’s not sustainable,” Leichtman says.
The chatter about YouTube TV’s ad stance is all the more interesting given that parent Google last month was found guilty by a federal judge of antitrust violations in its ad tech operations.
“Google tends to not to want to share signal, so they make it very difficult for their partners to monetize the digital marketplaces,” one senior media executive told Deadline. “But over time, you’ll see perhaps a more barker-friendly approach on the pay-TV side.”
Evan Shapiro, a former TV network exec and now a consultant and self-described “media cartographer,” sees YouTube’s biggest competition as itself. The broader creator-defined arena of YouTube, is not accessible via YouTube TV, whose contracts with networks would preclude it from luring viewers away from the pay bundle. In 2024, YouTube generated about $56 billion in ad revenue, well above what traditional media rivals collected.
“The problem isn’t that YouTube is ‘foregoing revenue’ – something YouTube would never do,” Shapiro told Deadline. “It’s that they are better at generating it and proving value in return than traditional TV is.”
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