YouTube TV urged to drop '$600 less than cable' ad claim

An advertising watchdog has recommended that YouTube TV, Google's growing pay-TV streaming service, drops an ad claim that the service is "$600 less than cable." The recommendation from the National Advertising Division (NAD) stems from a complaint lodged by Charter Communications.

NAD, which used an expedited process for single-issue advertising cases in making this decision, found that YouTube TV's pricing claim, which identifies "comparable standalone cable" as the basis of comparison, doesn't hold up.

NAD noted that the price calculation underlying the challenged claim includes the cost of two set-top boxes per household for "standalone cable" services," but argued that such a comparison isn't a good fit because operators such as Charter offer pay-TV streaming options that may not require a set-top box. In Charter's case, its Spectrum TV app, billed as a platform that can "stream outside the cable box," is compatible with iOS and Android mobile devices along with several retail streaming devices and/or integrated connected TVs from companies such as Apple, Roku, Google and Samsung.

"In the context of the 'cable' comparison, NAD found the claim reasonably conveys the cost of YouTube TV is compared to all cable services," the organization explained.

NAD added that the dynamics of today's pay-TV market also make it difficult to identify "comparable" offerings, noting that cable operators offer services such as regional sports networks in some markets and YouTube TV does not.

Google told NAD that it "unequivocally disagrees" with the decision and that it will appeal it. Google argued that "consumers broadly understand the difference between traditional cable and streaming and that they do not interpret 'cable' or 'standalone cable' offered via a 'cable box' as encompassing streaming services, regardless of who provides them."

Despite the recommendation, YouTube TV's marketers could find a path around this ad obstacle. NAD said that nothing in its decision precludes Google "from making other truthful and non-misleading claims comparing the price of YouTube TV with the pricing of services offered by any cable operator."

Update: Google lost its appeal, with a panel of the National Advertising Review Board (NARB) announcing on October 11 a recommendation that Google drop "600 less than cable claim." Google disagreed with the NARB's determination that consumers "watching the challenged commercials will somehow understand 'cable' to mean something other than traditional cable television," but said it intends to modify or cease the disputed ad claim. Google said it "may reconsider the claim based on updated information."

YouTube TV gaining stream

The spat centered on YouTube TV advertising comes at a time in which the streaming service is gaining momentum while traditional pay-TV operators, such as Charter, are losing video subs.

Leichtman Research Group (LRG) estimated that YouTube TV added 200,000 subs in the second quarter of 2023. In addition to being offered as a standalone service, YouTube TV is also gaining exposure through partnerships with various cable and telco broadband operators.

Charter, which is in the process of shifting new video subs to a platform from Xumo, the Comcast-Charter national streaming joint venture, lost 200,000 video subs in Q2.

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— Jeff Baumgartner, Senior Editor, Light Reading