Google has got to think big if it’s to turn YouTube from the money pit it has become into something profitable and worth owning. The move from UGC to premium content is already under way and Sony could be about to boost the library with full-length movies from its vast back catalog.
A YouTube Evolution
YouTube has slowly but surely been evolving ever since Google bought it for $1.65 billion back in 2006. But the small changes: more HD options, more advertising efforts, a faster clean-up rate of copyrighted content – hasn’t actually done much in terms of revenue. Sure, the traffic is better than ever but it looks like the site will still make a loss for its parent company this year.
The fact is that the world has moved on somewhat from what YouTube is famous for – short-form user-generated content. We now have Hulu and the BBC iPlayer providing us with streaming options of bang-up-to-date television and movie content, making YouTube look like the poor man of online video.
From UGC To Premium
As stated previously, the traffic is still there but the money just isn’t coming in. The fact that 97 percent of the videos on YouTube cannot be advertised against for fear of copyright violations says it all. Which is why UGC seems to be taking a back seat in Google’s plans for the site from here on in.
There are rumors of a site redesign on the way in coming weeks which will separate UGC from premium content once and for all. And according to CNET, YouTube is currently talking to Sony Pictures with a view to including some of its library of movies on the premium movie channel. The term ‘premium’ purely means professionally-made, and isn’t an inference it’ll need to be paid-for. Hell will likely freeze over before the day YouTube starts charging for streaming content.
Long-Form Content
YouTube has previously acquired some long-form content from CBS and MGM, with a Disney deal in the offing. But were Sony Pictures to come on board, this would be a significant step up for YouTube as a destination for full-length premium content. If the deal goes ahead.
The movies would reportedly come from Sony Pictures’ Web video property Crackle. Sony acquired this site for $65 million at around the same time Google decided to spend the GDP of a small country to capture YouTube. Crackle has around 60 full-length movies on it, of which YouTube would probably be given access to around 15.
Conclusions
There is no doubt that a sea-change is occurring at YouTube in order to turn it from a haven for non-profitable UGC into a Hulu-esque Web destination full of premium content. Sony Pictures is likely to be just the first of many media companies to come on board in order to gain access to YouTube’s user base.
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