YouTube Jumps Into Ad-Supported Streaming With ‘Mac ‘n Cheese of TV and Movies’

Service includes content provided by Lionsgate, A+E Networks, Cinedigm and FilmRise

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In a push to continue its dominance in video, YouTube is testing a new hub featuring free ad-supported streaming channels. The experiment, which is leveraging content from Lionsgate, A+E Networks and Cinedigm, follows the introductions of YouTube Shorts and Primetime Channels.

A YouTube spokesperson told The Wall Street Journal the company’s latest experiment is intended to gauge viewers’ response to free, ad-backed content. “We’re always looking for new ways to provide viewers a central destination to more easily find, watch and share the content that matters most to them,” she said.

The hub’s format is differentiated by offering “a more relaxed or ‘lean back’ viewing experience,” according to streaming executives who spoke to WSJ. Viewers can browse through programs or films to pick out their favorites – and quickly switch when they lose interest.

Chris Buchanan, president of streaming consulting firm South Medio Partners, likened the offering to comfort food, saying it was “the macaroni and cheese of television and movies.” FilmRise’s CEO Danny Fisher said the channels would appeal to cost-sensitive users who appreciate content because “free is free and in times of economic hardship, free is even more important.”

Alphabet’s YouTube has the biggest slice of the pie among streaming rivals as far as U.S. TV viewing, data from ratings firm Nielsen suggests. The platform captured 8.8 percent of American’ TV viewing as of November.

YouTube TV, the paid subscription service, had 5 million subscribers and trial accounts, and users can stream major cable channels including CNN and ESPN for $65 a month, as well as opt in with premium sports in the NFL Sunday Ticket package as an add-on or through Primetime Channels. YouTube launched the latter late last year to enable users to buy subscriptions to streaming services including Paramount+ and Starz on its platform. 

For the free hub, YouTube has looked into taking a piece of the ad revenue in a similar arrangement it has with content creators, who get 55 percent while Google keeps 45 percent, the WSJ reported citing sources familiar with the talks.

The streaming video pioneer has also recently rolled out YouTube Shorts, or short-form videos, to attract content creators who have migrated to TikTok.