YouTube Pursuing "Strategic Catalyst" Role for Industry

An article in the WSJ yesterday reported that YouTube may be planning to spend up to $100 million to commission low-cost web-only content as part of a reorganization of the site into 20 "channels." While the article was short on details and YouTube wouldn't confirm anything, the initiative feels consistent with the "strategic catalyst" role I characterized YouTube as playing in the online video industry last month, following its acquisition of Next New Networks.

While a more obvious path for YouTube to follow would have been to simply license expensive Hollywood content - and go toe-to-toe with Netflix - it appears that YouTube is instead looking to focus its resources on helping re-make online video into a viable competitor to traditional TV. That mirrors the role that cable operators played for cable networks in the industry's early days. As connected devices proliferate, bringing online video directly into the living room, it feels like a smart strategy, though it will take years to unfold. Meantime, one of the biggest beneficiaries of YouTube's decision is Netflix, which avoids having an expensive bidding war with Google for Hollywood's best content.

Categories: Aggregators, Indie Video

Topics: Netflix, YouTube