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YouTube Makes First Move Toward Original Content

by Jeff Steele

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.

8 Responses leave one →
  1. Andy Halmay permalink
    December 17, 2010

    I hate being first to comment but as an independent with global TV programming plans, this is very encouraging. All independents should rejoice because in my view, this will liberate us all from the dominance of the TV networks and their increasingly dreadful programming.

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  2. December 18, 2010

    It is heartening. However, NET NEUTRALITY is very important to this process, as explained in THE INTERNET MUST BE FREE at http://Michaelrbarnard.com
    We need to take action.

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  3. Cotty Chubb permalink
    December 18, 2010

    The Next New Networks guys are smart about what they do (read the NYT article, oh readers of Jeff, and follow the links) and have more than a billion views on YouTube this year, but they make short-form content for short attention spans. This is no Jack the Giant Killer.

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    • Jeff Steele permalink
      December 18, 2010

      I agree Cotty. I’ve been a Tim Shey fan for many years. With Tim as a co-founder and their head of programming, he’s really the person I tip my hat to for distinguishing Next New Networks from the rest of the pack. It may be short form, but it’s professionally produced short form, which is a step in the right direction (i.e. away from cats falling off couches.)

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  4. shawn permalink
    December 18, 2010

    While I want net neutrality. I think it is a pipe dream. It isn’t going to happen. It won’t belong to us soon no matter what action we take. Sorry Michael.

    However, there is a bit of hope in this article.

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  5. Scott Hillman permalink
    December 19, 2010

    after writing a lengthy response i keep comming back to this:

    Anyone who is reading this is unlikely to benefit from the news.

    This is true either if your big money or an indie film maker with a vision.

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    • Pierre Lapointe permalink
      December 21, 2010

      I think this is exciting news, mainly because it gives filmmakers another avenue for exhibition. Consumers may be confused by the choices but this model is in its infancy and it is sure to evolve in the next few years; networks and cable channels will become obsolete in their current form.

      I think in order to take advantage of this model, we, as content creators and providers, need to change the way we look at both our product and our audience. And this is admittedly not easy.

      I think we are about to embark on a huge technological shift that will redefine the way we look at entertainment; from the content to the production and distribution of it.

      The ones who think outside the box, literally and figuratively, will benefit most.

      Love the blog, Jeff. Keep up the good work.

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  6. December 23, 2010

    You nailed it, Pierre. “I think this is exciting news, mainly because it gives filmmakers another avenue for exhibition.”

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