Google Buys YouTube: Potential Netflix Competitor?
Yesterday Google bought YouTube for $1.65 billion, just after YouTube signed strategic relationships to provide copyrighted content. The Financial Times is reporting that "YouTube signed deals on Monday to offer music videos from Vivendi’s Universal Music Group and Sony BMG Music Entertainment, as well as television content from CBS, sharing any related advertising revenue."
How long before the studios realize the value of having movies and TV shows available online for free, with a nice revenue stream from Google ads? Before the Google acquisition YouTube delivered more than 100 million video views daily (I don't want to know how much this has hurt our productivity).
via TechCrunch.
The fact is if Google went after Netflix (or BB) they could easily crush them. Plain and simple.
Google has a market cap of 129.86 BILLION dollars. NetFlix is a paltry 1.65 BILLION in comparison.
YouTube was successful for 2 simple reasons. Firstly it is free and secondly, as we all know, it offers "copyrighted" material. Remove either and its popularity will plummet. If Google can keep it as is and silence the money grubbers with some revenue from Google ads then perhaps it has a chance.
Frankly I like YouTube for some of the zany new users vids, but mostly for watching older videos and such that I would never, in a million years pay for, ever. It is also great for settling arguments over movie quotes and such and for excellent reminders of quality content such as this: http://www.youtube.com/watch?v=bg8lSyGavc4
;-)
Posted by:Rusty Ramrod | October 10, 2006 at 10:22 PM
Walmart has a market cap of $200.61 billion, but gave up on their "Netflix-killer" service after about a year. I don't think money is the only factor here.
Posted by:munkey | October 11, 2006 at 01:54 AM
That's why I said "if". I do not believe Google would go after that market. They are forward looking and VOD is the future.
That, I believe is a market they *will* go after. I know most believe VOD is a pipe dream, but you know when I was a kid I dreamed about carrying around a movie on an Atari sized cartridge. Now I carry them around on a thumb sized drive. ;-)
I love technology!
Posted by:Rusty Ramrod | October 11, 2006 at 03:06 AM
well, um, no... you said (paraphrasing) that it is a "fact" that google could crush netflix or bb, specifically due to their massive cash reserves.
There are other reasons I can think of why google can and most likely will be a worthy competitor to any VOD services, but the massive market cap is not the main one.
Posted by:munkey | October 11, 2006 at 12:46 PM
This purchase further legitimizes the download market. For download rental, content is king - CinemaNow has some good content, Vongo has the Starz content.
Download purchase, Apple and Amazon have exceptional content.
YouTube and Google have figured out the technical challenges of scale; now they just need content which can be solved with $$$.
If you like your content old school through snail mail, then the only competitor to Netflix would be Blockbuster Online.
Posted by:Edward R Murrow | October 15, 2006 at 06:02 PM