Wednesday, December 2, 2009

Rent or Buy, You Tube Goes After iTunes

Would you rather pay $2 to download and own content or pay $2 to simply stream and rent it. That seems to be the choice that You Tube is bringing to the public. Free content works for only so long and on-line advertising revenue alone isn't enough to support the venture. So next step for You Tube, on-line rental. "Google is talking to networks about a pay-per-episode plan that would put it in direct competition with similar offerings from Apple's iTunes and Amazon, according to MediaMemo, an industry blog that first reported the talks." For Google, it's another opportunity to build a revenue model. For Apple and Amazon, it should only remind them that other competitors are out there ready to strike. Hulu and Fancast might just be next.

Certainly, Google has the deep pockets to test the water and doesn't think logic should get in the way of a potential revenue stream. Will it pay off; probably not but then the next step will be to convert from stream to download or monthly subscription. And this could lead to some nice competition and perhaps lower pricing in the long run for the consumer.

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