Did YouTube Pay Too Much to Broadcast Sunday Football Games?
Google beat out both Apple and Amazon by offering over $2 billion a year for 7 years — but Yahoo Finance believes it’s more about drawing attention to YouTube’s streaming TV services. “Don’t expect the package to be profitable, one analyst warned.”
“They’re not making money on this — this is a loss leader,” Michael Pachter, managing director of equity research at Wedbush, told Yahoo Finance Live, referencing YouTube TV’s current price point of $64.99. “I don’t think they make a penny at that level….”
“It’s an extremely expensive package of content,” Tim Nollen, analyst at Macquarie Group, previously told Yahoo Finance Live, noting the Sunday Ticket package was not a profitable service for DirecTV [which since 1994 has held the exclusive broadcast rights in the U.S.]
[…] YouTube TV has more than 5 million subscribers and trial users as of July. “Five million subscribers is just not enough,” Pachter stressed. “Even if all 5 million pay the $400 bucks a year…they’re going to barely cover their costs.” Still, despite the lack of profitability and sky-high price tag, Pachter noted YouTube might be best positioned to take advantage of the package, especially as the demand for live sports escalates. “I think they can be smart about how they carve up the content,” Pachter said, suggesting the platform could more easily sell games to bars and restaurants.
Read more of this story at Slashdot.