Google has signed up its first broadcasting content partner -- CBS (CBS) -- for a web TV service set for an early 2017 launch.
The over-the-top (OTT) market is expected to heat up with new offerings from AT&T (T), Amazon.com (AMZN), Alphabet's (GOOGL) Google and Hulu. What differs in this new wave from earlier Internet video services is the expected inclusion of more live broadcast content. Most OTT services have featured on-demand programming.
Google has gain edrights to all of CBS' content, including live NFL games, Reuters and the Wall Street Journal reported Wednesday. CBS has marketed its own stand-alone, direct-to-consumer, web TV service.
IBD'S TAKE: The new "Unplugged" OTT service will be part of Google's YouTube platform. Google has not disclosed YouTube's profitability or revenue. Read this IBD in-depth report about YouTube's mysterious financials.
AT&T is expected to launch DirecTV Now this quarter. AT&T has leveraged satellite broadcaster DirecTV's programming deals to cobble together an Internet video service. But AT&T has not finalized deals with CBS and 21st Century Fox Entertainment (FOXA), analysts say.
"The Google deal is understood to pay CBS a rate card premium to its traditional (pay-TV) services," said Stifel analyst Benjamin Mogil in a report. The deal does not include Showtime movies and TV shows, he said.
Google reportedly is in talks with 21st Century Fox and Walt Disney (DIS), owner of broadcast network ABC.
Dish Network (DISH) launched SlingTV, its OTT service in early 2015. Sony (SNE) offers PlayStation Vue, a high-end option.
AT&T is expected to price its DirecTV Now service at around $50 to $55 monthly. Google's "Unplugged"-branded service may be priced lower, say reports.
Hulu is a joint venture of Disney, Fox, and Comcast (CMCSA). Time Warner (TWX) recently bought a 10% stake in Hulu.
Apple (AAPL) last year shelved its web TV service as talks with programmers stalled. Cost-sharing to distribute the service was reportedly one issue.
Google stock climbed 0.7% to 827.09 in the stock market today, earlier touching an all-time high for the second day in a row.
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