YouTube TV Snares AMC’s `Walking Dead' for Live Service

(Bloomberg) -- YouTube, the world's most popular website for free, short-form video, introduced its live pay-TV service Wednesday -- with a little help from raging zombies.

YouTube TV, which had been in testing, will soon add six cable channels from AMC Networks Inc., including AMC and BBC America, as part of a $35-a-month live TV subscription that already includes the four major broadcast networks and dozens of cable outlets. That gives the fledgling online service popular shows like AMC's zombie thriller “The Walking Dead.”

The explosion of video from Netflix Inc. and Amazon.com Inc., along with shrinking cable audiences, have led pay-TV providers and technology giants to court young viewers with online offerings they can watch on iPhones and TVs. Dish Network Corp., AT&T Inc. and Sony Corp. are all selling small packages of channels on the web that include live programming and on-demand libraries of shows. These skinny bundles have amassed almost 2 million subscribers.

AMC Networks, based in New York, is the only pure-play cable programmer chosen for YouTube TV, which has decided not to carry Time Warner Inc.'s CNN, TBS and TNT channels, for example. YouTube's other partners all own major broadcast networks and were able to use popular over-the-air shows as leverage to include their cable channels.

Media companies without that bargaining chip are fighting for spots in new skinny bundles -- and facing more subscriber losses as such plans gain favor and traditional pay-TV loses viewers. Hulu LLC said in March it would carry six channels from pay-TV programmer A+E Networks, including History, in its forthcoming online service. Viacom Inc., the owner of MTV and Nickelodeon, won't be part of that plan.

With the YouTube deal, AMC Networks has secured a place in every new online package now in the marketplace, including Dish's Sling, AT&T's DirecTV Now and Sony's PlayStation Vue. The company doesn't have a deal with Hulu, which is owned by Walt Disney Co., 21st Century Fox Inc., Comcast Corp., the respective owners of ABC, Fox and NBC, as well as Time Warner.

Shares of AMC rose 4.1 percent to $61.49 at 1:23 p.m. in New York. They were up 13 percent this year through Tuesday.

AMC's flagship network airs “The Walking Dead,'' one of the most-watched shows on TV, as well as “Better Call Saul'' and “Into the Badlands,'' two of the most popular cable programs. Its other cable networks air critical darlings “Portlandia,'' “Orphan Black'' and “Doctor Who.''

“We have vital content that stands out above the pack,'' Chief Executive Officer Josh Sapan said in an interview. “The content is really desired by select groups of people. It's on their favorites list.''

AMC Rates

AMC Networks demands less for its programming than some peers. Viacom charges more than $3 a month per subscriber for its suite of cable channels, including Comedy Central, according to data from S&P Global Inc.'s Kagan division. AMC charges less than half of that.

“Our wholesale rate is very agreeable and fair and appropriately priced,'' Sapan said. “Someone constructing their offering doesn't bust their budget, which they might if they buy from someone else.''

In addition to marketing a monthly live TV service, Google's YouTube will also offer premium services, like CBS Corp.'s Showtime network, for an additional fee. AMC Networks will take part in that as well, with the Sundance Now independent film and documentary service available for $7 a month and the $5-a-month horror flick service Shudder.

To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum