I know we have a lot of new people here with the Black Friday/Cyber Monday sales and I know the Live Channels app is somewhat misleading/not clear. I made a post recently that explains it so I thought I'd copy/paste here for you all:
Live Channels is a system level app that "listens" for apps that have video streams (not necessarily live tv, just ongoing streams) and have made themselves available as "sources." If an app like this is installed, when you open Live Channels, you will be able to add said app as a source and whatever channels that app has made available will be integrated into the Live Channels tv guide. A good app to test this with is Pluto TV. Install the app, then open Live Channels and you'll see what I mean.
Now obviously with only one source this is pointless; why not just open the source's app? The idea is to aggregate sources into one app. I think right now, most people only use 2 apps: Pluto TV and HdHomerun extend. HdHomerun extend is a tv tuner that you connect to an OTA antenna and then your router. The tuner takes the signals, processes them and then broadcasts them over your network. If you have the HDHomerun app installed, you can then view your broadcast channels via the shield instead of changing inputs. You could then choose HDHomerun as a source for Live Channels and have your broadcasts channels aggregated in the same location as all your Pluto TV channels. See what I'm getting at here?
There are a few other great candidates that would be great for Live Channels. Imagine if Sling TV implemented it. You could have your 20+ Sling channels in the same location as your 20+ broadcast channels and as your 100+ PlutoTV channels. Crackle recently implemented a channel like interface; imagine if they got on board. There is a lot of potential with the Live Channels app to aggregate from multiple content providers and give us the traditional "channel surfing" experience.
Short guide:
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Install PlutoTV to force the Live Channels app to appear on the home screen and then you can play around a bit.
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If you want to get free OTA channels in the Live Channels app, you can buy an HD Antenna and an HDHomerun Extend. You'll connect antenna -> homerun -> router, install the HDHomerun View app and Live Channels will identify said app as a source.
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Alternatively, you can get an HDHomerun Prime if you still have cable and want to integrate your paid cable channels in the Live Channels app.
At present there is not a lot of support for Live Channels. Google has stated they want to grow this feature (it is a hugely unique feature - no other platform is doing it). Contact other potential sources! SlingTV is a prime candidate. Contact them if you want integration.
Post if you have any questions and I'll help as best I can.
Also, plug for /r/cordcutters as this feature is quite conducive to cordcutting