Bango has announced the launch of Direct Carrier Billing (“DCB”) payment services for Google’s YouTube TV Service, with the initial launch via a “leading” but unnamed US Mobile Network Operator (“MNO”). With the ongoing growth in US Over The Top (“OTT) video services continuing to cannibalise the Cable TV operators, we believe DCB for YouTube TV is a strong offering in a large market. The release is light on detail as to the potential value to Bango, and we make no revisions to forecasts. Nevertheless, the launch represents a further win in an area of strategic focus for the group. It also confirms the integration of a major new merchant service into the Bango Platform.
YouTube TV is a complete streaming media service, which offers consumers a wide range of TV news, sport and entertainment channels alongside on-demand video streaming. It is a multi-platform service, and is available via any internet-enabled device, including both Android and Apple devices. For the US pricing of $49.99 a month, customers get a full cable-free TV package, including access to 70+ major broadcast and popular cable networks and unlimited cloud-based storage for offline access to their favourite content. YouTube TV has over 1m subscribers (source Bloomberg). With the backing of Google and offering customers potentially $600 annual savings on their TV bill (source Google), we believe YouTube TV to be a strong offering in the OTT video space and one that will prove attractive to other MNOs – particularly those wishing to highlight the benefits of 5G connectivity.
c44% of the c128m households in the US currently have a CableTV subscription, with average monthly spend of $76 (source Pars Research). The industry has been plagued by disconnections - so-called “cord-cutting” as consumer preferences switch to OTT services such as YouTube TV, Netflix, Hulu, AppleTV+ and Disney+. US OTT video revenues are estimated at over $16bn annually (source PWC), with OTT service providers continuing to report strong growth. To quantify, the US OTT sector saw subscriber growth of around 600k in Q3 2019 vs a 2m loss for traditional PayTV providers (source Kagan).
Bango recently announced that OTT media providers were a key area of focus for growing End User Spend (“EUS”). With DCB for YouTube TV, Bango gains further traction in the streaming market. Note, Bango has existing relationships with Amazon Prime Video, Netflix and Spotify.