The Stack Archive

YouTube Red goes to Hollywood in search of new streaming rights

Thu 3 Dec 2015

A report in the Wall Street Journal indicates that Alphabet (the entity formerly known just as Google) is ramping up its incursion into the territory of video streaming giants such as Netflix, Amazon and Hulu by seeking out high-level premium content licensing to its new Red subscription service.

The report (paywalled) asserts that ex-executives from MTV and Netflix, now working for YouTube, have been in talks with content Hollywood studios and production companies over the last few months to ‘consider pitches’ and negotiate licensing. ‘Pitch’ is a pretty general term for a business proposition, but in Hollywood it has a particular meaning in terms of production, and so it seems reasonable to expect that the richest all-digital entity on the planet is thumbing through scripts at the moment with an eye to some more serious intent than it has shown so far.

In October Google announced YouTube Red’s commitment to new, self-produced original content, but the apparent quality of the initial projects – reality shows, comedies and cheap drama – didn’t set streaming enthusiasts on fire. YouTube Red, which removes ads from the hugely popular video site for $9.99 a month – is going to need its own Game Of Thrones, or at least its own Man In The High Castle, to register in binge-watch demographics.

The executives involved in the Hollywood foray are said to be former Netflix content executive Kelly Merryman and Susanne Daniels, who left MTV for YouTube this year, both reporting to chief business officer Robert Kynci, also an alumnus of Netflix.

The resources that Google has as its disposal to enter the original content market are staggering in comparison to Netflix and Amazon. To put it in perspective, Netflix is estimated to be worth $28 billion, Amazon $230 billion, compared to Alphabet’s current capitalisation potential of $395 billion. The only comparable company that could beat Google’s resources in original content production is Apple, currently the United States’ most profitable company at a turnover of $465 billion. However, Apple hasn’t succeeded in developing a viable platform that consumers associate with this kind of output, since iTunes’ protective ecostructure means that it would have to start playing nicer with other hardware manufacturers and platforms in order to develop the same kind of market reach as the incumbents – and, soon, it seems, Google.

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