Hollywood may be happy to deal with YouTube Red - if the price is right

By Jim O'Neill on Dec 03 2015 at 9:30 AM
Hollywood may be happy to deal with YouTube Red - if the price is right

YouTube appears to be turning up the heat on its YouTube Red SVOD service, with published reports saying the nascent entity has been talking with Hollywood studios and production companies in an effort to license TV shows and movies as it builds momentum to battle SVOD’s Big Three – Netflix, Amazon and Hulu – for subscribers.

YouTube, says the Wall Street Journal, it taking a similar road as its big competitors, looking to license new, previously unreleased shows and movies. In a different twist, the new content would either be streamed exclusively from YouTube Red or, potentially, streamed on the service and released to traditional TV and movie outlets concurrently.

YouTube Red launched in October and combines ad-free YouTube with offline downloads, the Google Play Music streaming service, and exclusive access to some YouTube-financed content, all for $10 a month.

While YouTube has a massive viewing audience, the profitability of the service has always been questioned. Red was intended to create a new revenue stream that would help push YouTube into the black.

Google, however, traditionally has had a difficult time convincing Hollywood that it could be a top-notch partner. The company’s 2010 foray into its Google TV smart TV platform that it co-developed with Intel, Logitech and Sony, was never able to overcome the concerns – some say misunderstandings – Hollywood had for the project. Much of that was due to Google’s lack of connections with the industry.

But, the recent surge of new OTT services that have come to market, including HBO Now, CBS All Access and others, has changed how Hollywood views Silicon Valley, changing foes to friends and concerns about piracy to concerns about how to grow alternative revenues as more viewers turn to online streaming for their entertainment.

An initiative by YouTube Red to take more original content online might be more acceptable now. Hollywood studios, like network news operations, have a deep well of content already in the pipeline that often ends up without an outlet.

And, network studios already have geared up to supply original content to SVOD players. ABC Studios Civil War historical drama Point of Honor was produced for Amazon Prime’s original content push, for example, and CBS also has acknowledged it’s created content designed to go straight to SVOD competitors, as well as to its own SVOD service, CBS All Access, with the latest iteration of its Star Trek series.

A year ago, CBS Chief Les Moonves said the company was developing content for other SVOD services.

So, can YouTube Red make a connection with Hollywood this time around? Sure, as long as the price is right. But don't hold your breath for those concurrent movie releases; that may be just a tad further than Tinseltown is willing to go... for the moment. 

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

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