In the highly competitive world of subscription VOD providers, YouTube has just moved the world closer to my prediction that Netflix will soon be producing original content.

According to the NY Times, YouTube is in talks to buy Next New Networks, a web video production company.

The acquisition of a Web video production company would be YouTube’s first major foray into creating original content.

If Netflix, Hulu, and the national cable operators (through their new Vutopia VOD service) are anything like the Googles, Yahoos, and Microsofts of the world, then they will not allow themselves to be outdone and will each have to make their own moves in this direction.  The gravitational force of one-upmanship is just too strong to resist these days — especially with Wall Street expectations breathing down their necks.

The jockeying is already well underway, as evidenced by the recent land grabs for “in-season” series content.  Netflix, Hulu, and Vutopia are each competing vigorously to carve-out exclusive streaming-rights deals with major and mini-major studios and networks, similar to the pricey Pay-TV deals enjoyed by HBO, Showtime, and Starz.

Next New Networks is a startup that launched in 2007 to create original web programming.  According to the Times article, a year ago, the company broadened its focus to also play a role similar to a Hollywood producer, by scouting new video creators and helping them distribute their videos, find an audience and make money, through the Next New Creators program. It now has 65 independent creators whose videos represent more than half of Next New Networks’ monthly viewing.

Last month, Google CEO Eric E. Schmidt was noncommittal last month when asked if YouTube would consider making a move such as this.  Netflix CEO Reed Hastings has been slightly more assertive in rebuffing the idea of original content.

From where I sit, the path is already set and the writing is on the wall.  Hulu, Netflix, Vutopia, YouTube, and Amazon are on an irreversible trajectory toward [A] producing original content (some movies, but mostly series and mini-series), and [B] becoming domestic distributors of independently produced TV series.  Why? Because A + B = the inevitability that each will become a television channel unto themselves that will be piped directly into your TV through any number of home devices.  Each of whom are coming in through your ISP, and circumventing the traditional cable service.