The stars are aligning for tech giants like Apple, Google, or Amazon to take aim at the cable TV industry.

Last month, Google became the first tech behemoth to directly take on cable by releasing its own TV package, called YouTube TV. The $35 package is what’s called a “skinny bundle,” coming in at around 40 channels, with special attention paid to sports.

With YouTube TV, Google beat competitors like Apple and Amazon to the punch. Both have previously been rumored to be trying to put together their own TV packages — Apple for years, though it always seems to fall through.

There’s a good reason tech companies are poking around this market now. According to Salesforce’s new 2017 Connected Subscriber report, a whopping 68% of millennials (18-34) would ditch cable for a TV service provided by a tech company.

That’s an opening in the marketplace, and it’s only getting bigger as time goes on, the research suggests. In contrast to millennials, only 43% of Boomers (55+) said they were likely to use a tech company like Apple, Google, or Facebook for their cable service instead of their current provider.

Here is the full chart from Salesforce (which conducted the survey via Harris Poll):

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Tech giants aren’t the only companies betting that a new type of pay-TV package will emerge. Companies from Hulu to AT&T have released live streaming TV bundles, delivered over the internet, that can be watched on your smart TV, laptop, phone, and so on. It’s good to note that in these packages, you still need to pay for data, so companies who provide it could have a structural advantage.

So far, many TV network heavyweights have loved the idea — especially those that are losing a ton of subscribers.

“The substantial growth we’re already seeing makes us bullish on the future of these nascent offerings,” Disney CEO Bob Iger, whose ESPN has seen millions of subscriber losses over the last few years, said on Disney’s earnings call Tuesday. “Right now, they are a small part of the pay TV universe, but we believe they’ll be a much bigger part of the business going forward.”

But it’s still unclear whether these bundles will be a hit, and whether the traditional cable business model, with a combination of advertising and subscription revenue, will prevail in the new digital age.

In fact, both Netflix and Facebook seem to be betting that TV-quality shows can be sustained by a single revenue source. For Netflix, that’s subscriptions, and for Facebook, it’s advertising. YouTube also recently announced a slate of shows with celebrities like Ellen DeGeneres, Kevin Hart, and Katy Perry — funded entirely by advertising.

Regardless of the model that emerges, however, Salesforce’s data suggests that the time is ripe for tech companies to strike at traditional distributors of cable and satellite TV.

Young people, at least, are ready.

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Source: http://www.thisisinsider.com/tech-companies-like-apple-and-google-should-take-on-cable-tv-2017-5

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