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Google’s YouTube goes for the OTT jugular, will add 20 Channels

Google knows the era of the smart TV is here

By PETER WHITE

Published: 14 April, 2011

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Google knows the era of the smart TV is here. It knows that almost every TV that’s sold comes with an Internet connection. Its YouTube has a widget on every smart TV, smart TV adapter and Blu-ray player plus an app for every Apple and Android tablet and smartphone.

Now, according to the Wall Street Journal, it wants to revamp YouTube into “channels” such as arts and sports, then add 20 or so premium channels” that would show five to 10 hours of professionally produced original programming a week. Sounds a bit like Netflix, eh?

The move is the final seal of approval that OTT entertainment is here to stay and is another threat, as we have warned, to the pay TV premium channels like HBO and Showtime plus perhaps even basic channels like AMC and TCM. If that turns out to be true, it’s a threat to the pay TV industry because most American and UK consumers can get all their local broadcast channels in HD format over the air. It’s the local channels that carry major sports events such as this weekend’s Masters golf tournament — pay TV is not needed.

YouTube is reportedly in negotiations with some major sporting leagues to bring more live games to the site in addition to the live streaming Indian Premier League cricket matches that it has done.

Google is reportedly hiring for the project and expects to get some channels up and running by year end. The paper said it’s already holding meetings with Hollywood talent agencies such as Creative Artists Agency, William Morris Endeavor and International Creative Management to have their clients create content for the YouTube channels.

Reportedly the changes to YouTube would be made gradually — slowly perhaps by Internet time but not in real time.

What would be missing in a world without pay TV is:

- A couple of national news channels like CNN and Fox News

- Some business channels like CNBC and Bloomberg

- A collection of specialty channels such as for kids, cooks and kooks

- Some documentary-oriented channels like the History Channel and Discovery

The paper said Google, which is already the largest ad network in the world, has budgeted upwards of $100 million to get original content. But that can only be where it starts as it adds commercials to bring in revenue. Netflix reportedly paid about $100 million to get the originally produced series “House of Cards” with Kevin Spacey. It looks as if the content producers will find they have a new and deep-pocketed group bidding for their goodies — the OTT crowd.

What’s the difference then between the YouTube channels and the pay-TV channels? Or, Netflix, which is now ordering original content and contracting for exclusive rerun rights? And where are Amazon and Apple in this rush to become dominant in OTT?

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