Thursday, September 3, 2009

Is You Tube Leaving Its Comfort Zone?

You Tube, the home for user generated videos and clips from network shows, is looking to compete in the pay movie space. While it's revenue has been primarily from ad support, the appeal of a second revenue stream is hard to beat. Still, can You Tube compete with Netflix, Apple, Amazon, and others in this transactional and subscription space.

You Tube's parent, Google, tried to be in this space prior to purchasing You Tube. "Google has charged for video rentals and downloads in the past through Google Video. But less than a year after acquiring YouTube in October 2006, it stopped offering the paid video service." Is the timing right to get back into the game; I think not. I don't believe the You Tube consumer would accept a premium model. They use the service to upload and share videos and You Tube is the place to find viral, much talked about, clips. Others, like Netflix, have been building relationships with Tivo and Sony to enable these online movies for pay to be watched on the bigger screen. And can You Tube really differentiate its titles from what the others are offering to recapture market share. Movies may also be seen as a commodity; the only way to enter is with a deeply discounted pricing model. Hollywood may not be interested in that marketing approach.

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