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YouTube makes TV move


Published: 1 February, 2013


The idea of YouTube becoming more like TV and eventually taking over TV viewing, is a bit far-fetched, but it seems to be the only way people know how to write headlines right now. This week the US press appears shocked that YouTube is allowing paid channels.

But it can't be a surprise that YouTube have been heading this way, because it tells anyone who asks, whenever an executive speaks - It wants paid TV channels on YouTube, of high (higher) quality content, and it already has them outside of the US.

In the first year of our paid weekly service, Faultline (2003) we talked about subtle changes in the way programming is funded eventually giving way to new content creation paradigms. It has taken ten years, but this shift is part of that. If people can make a living out of YouTube, they will stay loyal to it and when they can make a fortune out of it, they will.

The result is that YouTube becomes a fostering ground for mini-studios and at a stroke, YouTube could decide to fund that talent in a big way, and those mini-studios could flourish . This is a neat way to avoid paying traditional studios a minimum of $3,000 a minute for TV programs as an original content funder. Instead, YouTube gets small, profitable content businesses to re-invest from the advertising or subscription revenues which it has helped generate for them. Netflix may have a $2 billion a year content bill, while YouTube makes multiple minor investments and potentially gets cooler, more original, content.

The multiscreen revolution then ensures that this get seen on both smart TVs and tablets, and next thing you know, Hollywood becomes Googlewood.

It's a good plan, but we see a problem in that there is nothing social about YouTube. You have to use other social networks to tell people about what you are viewing or have viewed on YouTube. And that makes Facebook the natural web property to dominate movie and TV viewing, because on Facebook you can do things together. We think this is less obvious, but more assured, in the long run.

The difference between the two moves is that YouTube runs counter to existing TV creation processes, while Facebook can work with studios. YouTube has to change the content world, Facebook can work with any content world.

For a longer version of our analysis of the YouTube moves, go to www.rethinkresearch/faultline and request this week's issue, free.

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